Under stark review, the concept of exiting the Ethiopian AGOA partnership is possibly a huge mistake – one that probably should (and could) be reversed, resolved, extended, or at least peppered with exemptions.
Of course, China is watching America’s every move and they immediately pounced on the weakness.
For years, they have made significant investments in Ethiopia, and the country is sometimes referred as the China of Africa. In keeping with that mindset, they quickly announced a plan to purchase $300 billion worth of goods from Africa over the next three years and invest about $10 billion dollars.
China also sent their Foreign Minister Wang Yi directly to Ethiopia’s Capital City (Addis Ababa) to show support for Prime Minister Abiy Ahmed’s elected government
Ethiopia’s civil war is constantly marred with accusations of humanitarian, political, and even geopolitical problems, but AGOA’s charter calls for the development of a market-based economy, observing the rule of law, political pluralism, the right to due process and reducing poverty – plus combatting corruption and protecting human rights.
the announced AGOA plug-pulling may be the last straw for the struggling trade program, simply because the Ethiopian exit has reverberated well beyond the country’s borders.
Now, with America weaponizing AGOA (as a tool to resolve a country conflict), retailers are faced with another significant and growing loss of international supply. To put this in a different perspective, just a few days ago one very large and responsible USA mega-brand announced that they were closing their operations in Ethiopia. Other brands and retailers will probably follow suit.
The people of Tigray represent about 6% of Ethiopia’s 119 million population, but they had ruled Ethiopia for 28 years before the Prime Minister came to power. Clearly, from all the statements made and actions taken, Prime Minister Ahmed’s government wants to exercise more control over the Tigray region
in trying to understand the future of AGOA, one can look to the 2008 film: “The Curious Case of Benjamin Button” which was based on a short story by F. Scott Fitzgerald. In the movie, Brad Pitt plays a unique individual whose life flows backwards from old age to birth. Looking back at AGOA’s 21-years, the characteristics of success and failure appear time-and-time-again, with little change of tactic. The AGOA trade parody plays out, is clarified, and perhaps even forecasted by one specific line in the movie – when Benjamin Button reflects on past history and says: “Our lives are defined by opportunities, even the ones we miss.”
Most everyone hopes that AGOA doesn’t become a missed opportunity.
There is still time between now and January 1st.
Maybe, just maybe, something will change.
was Chairman of the Board of the American Apparel & Footwear Association (AAFA) and also served as their President and CEO. The Association represents more than 1,000 well-known brand names – with a primary mission to interface with government on matters related to our industry. I was also President of several branded and private label fashion companies that allowed for the unique and incredible opportunity to be deeply involved with most aspects of the apparel, footwear, accessory, and retail communities on both a domestic and international level. I participate annually in the Consortium for Operational Excellence in Retailing at Wharton and Harvard and guest lecture at Wharton, Harvard, Columbia, Cornell – as well as provide industry commentary on CNBC, CNN, Yahoo Finance, Bloomberg, BBC, and Fox.