Saturday, May 9, 2015; 09:30-11:00
Nouveau Parc des Expositions FORELLO EXPO
Tanjombato – Antananarivo
The Honorable Minister of Industry,
It is truly an honor for me to be here as we open this conference organized by the Ministry of Industry on the African Growth and Opportunity Act, better known as AGOA.
For those that may not know, AGOA significantly enhances market access to the United States by extending duty free privileges on over seven thousand product lines. This includes, but is not limited to, apparel and footwear, minerals, and a variety of agricultural products.
The return of trade benefits to Madagascar under AGOA, announced by President Barrack Obama in June 2014, is a concrete symbol of the strengthening of the relationship between our two countries.
Madagascar’s eligibility for the program was reinstated in recognition of the country’s return to democratic order, and in recognition of President Rajaonarimampianina’s commitment to promote transparency, combat corruption, support good governance, and begin the rebuilding of Madagascar’s economy.
Taking the necessary actions to translate these commitments into reality will require courage and perseverance. As the first U.S. Ambassador to Madagascar in five years, I am pleased to say that Madagascar has a partner in the United States in striving towards these goals.
As many of you remember, Madagascar exporters were among the most enthusiastic in seeking and taking advantage of duty-free access to the U.S. market under the African Growth and Opportunity Act, during the country’s first period of the eligibility for the program.
In 2008, more AGOA eligible shipments left from Madagascar than from any other AGOA eligible country except Lesotho. Exports totaled almost 280 million dollars in that year alone.
And when duty-free access under AGOA went back into effect earlier this year, Malagasy exporters were ready. They have already produced almost four and a half million dollars of exports under the program in just four months. Although there is much more ground to recover to get back to the level where we were in 2008, this is an encouraging first step.
Building on this momentum, we will support Madagascar in taking full advantage of AGOA as a means of boosting its exports to the U.S., in order to help create the much needed employment that will contribute to the sustainable and inclusive economic development of Madagascar – a shared interest between our two countries.
So far, Madagascar has exported primarily textiles and apparel products under AGOA, and it is this sector that is certainly the most poised for growth in the immediate future, with the potential to add hundreds of thousands of jobs.
However, as I mentioned earlier, AGOA is about much more than just textiles and apparel. Working together with the Government of Madagascar, we are looking for ways to expand Madagascar’s use of the program. The United States wants to help Madagascar to diversify its AGOA exports into other sectors, such as handicrafts and specialty foods.
Just this past Thursday, we hosted an International Trade Specialist from the U.S. Customs and Border Protection Office, who conducted a training session for Malagasy Customs Agents on the compliance procedures for AGOA shipments in sectors other than textiles and apparel. These requirements, known as Rules of Origin, are slightly different for all other products than they are for garments. And, we are working to increase knowledge of these requirements so that you can more easily expand your exports.
We are also working with the Government of Madagascar to develop an AGOA strategy to take better advantage of the program in the near-to-medium term. It will include looking for ways to increase the linkages between Malagasy exporters and American buyers through support for the participation of Malagasy firms in select trade fairs in targeted sectors in the United States.
Another key aspect of this strategy will involve putting Madagascar back on the radar of those American buyers who left the country during the transition period. In this vein, we recently hosted a senior executive from one of the largest fashion trade fairs in the world who left with an excellent impression of Madagascar’s capacity and the quality of its workforce. It is our hope that through efforts such as these, the “Made in Madagascar” label will once again be recognized in shopping outlets across America.
These efforts by the United States Government have been complimented by work in the private sector, demonstrating the associative effects of public-private partnerships. I would like to single out Maersk for launching a new Indian Ocean Islands service this year, which cut the average transit time from Madagascar to the United States by two weeks. Initiatives such as these significantly improve Madagascar’s competitiveness under AGOA.
As many of you know, the current legislation authorizing AGOA ends in September of this year. Fortunately, the extension of AGOA is a high priority for President Obama and the legislation enjoys bi-partisan support in both chambers of the U.S. Congress, and a draft bill to extend AGOA has already begun working its way through the legislative process.
Madagascar is a country of enormous potential. But even with preferential trade treatment in place, unlocking this full potential will require an improved business climate that can help to attract much needed investment, both foreign and domestic.
In the long term it will be important for the Malagasy government to foster the conditions, stability, and business confidence that will encourage private sector-led growth.
This is why the United States is strongly supportive of National Reconciliation. It is our hope that this much needed reconciliation can put an end to the cyclical political crises that have stymied the economic development of this country.
Our countries share a common interest in promoting economic growth and prosperity for the Malagasy people, and I am convinced that working together, the government, the private sector, and the international community can help bring about the vision of a more prosperous Malagasy economy for the good of the Malagasy people.
In closing, I would like to thank once again the Minister of Industry for organizing this event, and all of you for being here today to learn more about AGOA.