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Senators Introduce Bill Extending AGOA TCF Provisions, Modifies CAFTA-DR

Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Orrin Hatch (R-Utah) introduced legislation (S-3326) June 22 they said would improve U.S. trade with sub-Saharan Africa and Central America. The bill would extend a key provision of the African Growth and Opportunity Act (AGOA), extending a Third-Country Fabric (TCF) provision that allows African countries to use third-country fabric and then export that into the U.S. The Republic of South Sudan would also be added to the list of 48 sub-Saharan nations eligible to qualify for duty-free access to the U.S. market for certain products, including apparel, footwear and textiles.

The legislation would also "make non-controversial technical changes to the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) textiles and apparel provisions," the lawmakers said. The changes were agreed to by Trade Ministers during the February 2011 CAFTA-DR Free Trade Commission meetings. All CAFTA-DR countries except the U.S. have already approved the changes this legislation codifies, the legislators said. The bill would also reauthorize import sanctions against Burma for three years, while preserving the Administration’s right to waive or terminate those sanctions.

USTR Supportive

U.S. Trade Representative Ron Kirk gave his support to the legislation. “If our trade partnerships with Africa and Central America are going to provide the economic boost they’re meant to provide to these developing regions, and benefit American businesses and consumers as well, these critical fixes to AGOA and CAFTA-DR need to pass. So the agreement to move this legislation now is a very welcome step,” said Kirk. The TCF is scheduled to expire in September and the legislation would reauthorize the TCF provision until 2015.

The changes to the CAFTA-DR would, "among other things, provide certainty of duty-free treatment for women’s and girls’ woven pajama bottoms and clarity as to how certain items will be treated on the textiles 'short supply' list of the FTA, which will promote use of the free trade agreement," said the office of the USTR. The USTR press release is (here).

Text of the bill is (here).