At the beginning of the new year, Ethiopia, an eastern African country, was removed from the beneficiary list of the African Growth and Opportunity Act (AGOA) by the United States, and its products are not allowed to be exported to the United States. Then enjoy tax-free and other trade preferential benefits.
The Office of the U.S. Trade Representative said in a statement that given Ethiopia’s failure to end more than a year of war in the Tigray region and the war has resulted in“serious violations”Human rights, violation of Article AGOA506a terms. This article stipulates that member states shall not engage in acts that seriously violate internationally recognized human rights.
Ethiopia has been in the midst of a civil war since 202011 months, which has caused Thousands of people died and more than 2000,000 people were displaced. According to United Nations data, approximately 9.4 million people in the three regions affected by the war are in need of food assistance. 2020Year11Month4Day,“The Tigray People’s Liberation Front” (Tigray People’s Front) armed attacks on the National Defense Forces base stationed in Tigray, The Ethiopian government immediately announced the launch of military operations against the “TPF“. It has been more than a year.
AGOA was introduced in 2000 during the Clinton administration to provide goods from African countries with duty-free entry into the United States. However, the premise is that member states must meet conditions such as human rights and worker protection, not apply customs bans on U.S. products on their territory, and make progress in political pluralism. According to the Office of the United States Trade Representative, as of 2020, 38 countries are eligible for AGOA benefits.
20Ten thousand low-income families in Ethiopia are affected
AGOAMembership means favorable market access worth hundreds of millions of dollars for Ethiopia. In addition to the already duty-free 5000 variety of goods, AGOA is available to eligible countries 1800Duty-free opportunity for a variety of goods to enter the US market.
AGOA helped build a large textile industry in Ethiopia. From 2000 to 2020, Ethiopia exported duty-free to the United States worth 7.22 $100 million in apparel, including Calvin Klein and Tommy Hilfiger and other major American brands fashion brand.
Ethiopia responded that it was “extremely disappointed“ with the U.S. decision. Since much of Ethiopia’s economic growth depends on manufacturing goods for export, the sanctions will devastate the country’s economy and put many low-wage workers out of work. The Ethiopian Ministry of Foreign Affairs stated that the US move will affect more than 20 low-income families and 100Ten thousand people.
The U.S. decision to suspend Ethiopia’s trade benefits also threatens the country’s textile industry, which supplies global fashion brands. Ethiopia has one of the largest textile industries in Africa. According to data from the Office of Textiles and Apparel of the U.S. Department of Commerce (OTEXA) , in 2020, Ethiopia exported value to the United States2.23526$1 billion in textile and apparel. Now, U.S. retailers sourcing from Ethiopia may turn to the West African country.
The U.S. move also puts greater pressure on Ethiopia’s economy, which is faltering due to civil war, the epidemic and high inflation. Outside the war zone, inflation is hammering the capital, Addis Ababa.
In the open-air market, �The war has also hurt Ethiopia’s ability to raise additional funds from capital markets or other creditors, with yields on its $1 billion bonds soaring to /span>20% or more.
Netherlands Investment CompanyWilliam Blair’s fund managerYvette Babb said: “We are not sure if the conflict will escalate…Under the current circumstances, I feel uncomfortable buying Ethiopian government bonds Comfortable.”
But there are still investors cultivating the long-term market. Patrick Heinisch, emerging markets economist at Deutsche Bank Helaba, said that despite the risks, some investors are still Cultivating Ethiopia’s large and growing market, foreign direct investment will continue to provide the government with life-saving money. He added that the government’s need for cash is expected to give investors greater bargaining power if state-owned enterprises are privatized.
Spain-listed wind turbine manufacturer Siemens Gamesa just started its first power project with the state-run Ethiopian Electricity Company early last year, the company said“Business as usual”.
The World Economic Outlook released by the International Monetary Fund (IMF) in October last year China said that after continuing to achieve rapid growth exceeding 10% before the epidemic, the Ethiopian economy is expected to grow only in 2021. 2%. At the same time, there is no forecast of growth from 2022 to 2026 because ” Exceptionally high levels of uncertainty”.
Ethiopia accuses Western media of exaggerating the impact of the war. National Finance MinisterEyob Tekalign Tolina said in an interview with India TV that the government expects to2022The economy will grow by 8.7% in the fiscal year ending in June , “Ethiopia is a very powerful country, we are talking about conflict in one area of the country, but the country as a whole is thriving.”
Ethiopia expresses“sad”and“Dissatisfied“ and asked the United States to reconsider the cancellation decision. In addition to reforms, Ethiopia is taking various initiatives aimed at bringing peace and stability, political consensus and economic development, the statement said.
The U.S. rolled back the trade benefits despite calls from some U.S. lawmakers and Ethiopian lobbying groups for the Biden administration to give more time for Ethiopia to meet the demands.
“Ethiopia has never neededAGOA‘s benefits more than now,“The country Chief Trade NegotiatorMamo Mihretu said.
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