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Ethiopian Textile Industry at Risk if US Suspends Trade over Tigray

The United States is considering suspending Ethiopia's tax-free trade position to punish it for violence and food shortages in Tigray. Ethiopia launched a military campaign in the northern state a year ago to try to crush a local force, the Tigray National Liberation Front. The conflict has largely blocked aid transports to the area.

Ethiopia's favorable tax position was awarded under the U.S.'s African Growth and Opportunity Act, also called AGOA.

A suspension of the tax-free recognition would seriously threaten Ethiopia's cloth products, or textiles, industry. That growth industry is part of Ethiopia's plan to become a center for manufacturing and improve its economy.

On workdays in Addis Ababa, the capital city, thousands of women sit at sewing machines making cloth products for export.

Many of these workers will lose their jobs if the U.S. suspends the country's special tax break.

Finoteselam Nigussie is a 40-year-old textile worker who pays for her home and her daughter's school from her earnings1. The company's owner, Sammy Abdella, set up his business almost 20 years ago. He has 250 workers.

"People...have worked with us since we started. We have created a family," he said.

While Ethiopia is a comparatively small textile exporter, loss of its trade status would still cause problems for several worldwide clothing sellers, such as Tommy Hilfiger and Calvin Klein. They have already been hurt by COVID-19 linked slowdowns in transportation and other areas.

The U.S. has repeatedly expressed concern about reports of sexual violence by Ethiopian and allied2 Eritrean soldiers in Tigray.

The United Nations says a refusal to permit aid to enter the Tigray area has forced 400,000 into famine, or severe food shortage. On Thursday, it said no food trucks had entered Tigray for the past 10 days. There have also been many reports of mass killings3 of civilians4.

The government has denied it is preventing aid from entering Tigray and said some soldiers have been tried for abuses. It did not give additional information.

The chief trade representative for the U.S. said there will be a decision soon on Ethiopia's AGOA standing5.

AGOA gives sub-Saharan African nations special, tax-free access to American markets if they remove trade barriers to American products and work toward democracy.

Prime Minister Abiy Ahmed's chief trade negotiator Mamo Mihretu told Reuters that AGOA had directly created 200,000 jobs and indirectly6 created millions.

"We should not politicize trade," he told Reuters.

Over the past ten years, Ethiopia has spent billions building up its manufacturing. Some factories produce goods for large clothing companies such as PVH, owner of Calvin Klein, Speedo and Tommy Hilfiger.

At Sammy Ethiopia, where Nigussie works, about 90 percent of products are exported to the United States. If Ethiopia is suspended, Abdella said his company will close.

Ethiopia exported about $237 million worth of goods tax-free to the United States under AGOA in 2020, most of it clothing and textiles, says the U.S. commerce department.

It is unclear what will happen to international investors7 and Ethiopian companies if the U.S. goes ahead with the suspension.

Mamo warned an AGOA suspension would hurt U.S. companies trying to move production from Asia to Ethiopia.

Though Ethiopia would suffer from an AGOA suspension, large fashion companies would find other suppliers, said Neil Saunders. He is a retail8 expert who works for Conlumino, a retail research company.

Raghavendra Pattar is head of Nasa Garment, a manufacturer in Hawassa Industrial Park. Nasa exports about 95 percent of its clothing to U.S. companies. It has 1,200 workers, mostly women, and spent $7 million to set up the factory two years ago.

An AGOA suspension would stop its plans to expand.

"AGOA ... is the reason buyers are coming to Ethiopia," he said. He added that if the tax-free status is removed, "the buyers will go to another country."

Words in This Story

access - n. a way of getting near, at, or to something or someone


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1 earnings rrWxJ     
n.工资收人;利润,利益,所得
参考例句:
  • That old man lives on the earnings of his daughter.那个老人靠他女儿的收入维持生活。
  • Last year there was a 20% decrease in his earnings.去年他的收入减少了20%。
2 allied iLtys     
adj.协约国的;同盟国的
参考例句:
  • Britain was allied with the United States many times in history.历史上英国曾多次与美国结盟。
  • Allied forces sustained heavy losses in the first few weeks of the campaign.同盟国在最初几周内遭受了巨大的损失。
3 killings 76d97e8407f821a6e56296c4c9a9388c     
谋杀( killing的名词复数 ); 突然发大财,暴发
参考例句:
  • His statement was seen as an allusion to the recent drug-related killings. 他的声明被视为暗指最近与毒品有关的多起凶杀案。
  • The government issued a statement condemning the killings. 政府发表声明谴责这些凶杀事件。
4 civilians 2a8bdc87d05da507ff4534c9c974b785     
平民,百姓( civilian的名词复数 ); 老百姓
参考例句:
  • the bloody massacre of innocent civilians 对无辜平民的血腥屠杀
  • At least 300 civilians are unaccounted for after the bombing raids. 遭轰炸袭击之后,至少有300名平民下落不明。
5 standing 2hCzgo     
n.持续,地位;adj.永久的,不动的,直立的,不流动的
参考例句:
  • After the earthquake only a few houses were left standing.地震过后只有几幢房屋还立着。
  • They're standing out against any change in the law.他们坚决反对对法律做任何修改。
6 indirectly a8UxR     
adv.间接地,不直接了当地
参考例句:
  • I heard the news indirectly.这消息我是间接听来的。
  • They were approached indirectly through an intermediary.通过一位中间人,他们进行了间接接触。
7 investors dffc64354445b947454450e472276b99     
n.投资者,出资者( investor的名词复数 )
参考例句:
  • a con man who bilked investors out of millions of dollars 诈取投资者几百万元的骗子
  • a cash bonanza for investors 投资者的赚钱机会
8 retail VWoxC     
v./n.零售;adv.以零售价格
参考例句:
  • In this shop they retail tobacco and sweets.这家铺子零售香烟和糖果。
  • These shoes retail at 10 yuan a pair.这些鞋子零卖10元一双。

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