The Impact of AGOA Suspension on Leather, Textile & Apparel Export in Ethiopia

Abstract

This article explores the impact of the African Growth and Opportunity Act (AGOA) suspension on Ethiopia’s leather, textile & apparel industry. The analysis is based on panel data from 2020 to 2023. Data has been sourced from the websites of the US trade representative, UNCOMTRADE, Trade Map, and AGOA info. Countries were selected based on the large export value of textile, apparel & leather and the rate at which they were utilizing AGOA. The textile and apparel control group consist of Kenya, Madagascar, and Lesotho whereas Kenya and Mauritius have been designated as the leather product control group. 2020 and 2021 are the pre-suspension periods, while 2022 and 2023 are the post-suspension years. The study used a triple difference-in-differences approach. The findings indicate that the AGOA suspension led to a significant reduction in the export values of textiles and leather. But the impact is more pronounced in the textile and apparel sector than the leather sector. To mitigate the impact of AGOA's suspension, the study recommends that Ethiopia must diversify its export destinations and improve the productivity of textile and apparel products.