This document provides an overview of opportunities in the textiles and apparel trade preference programs. It discusses the growth of US textile and apparel imports in recent years. The main trade preference programs highlighted are the African Growth and Opportunity Act (AGOA), Haiti HOPE and HELP programs, and the Egypt-Israel Qualifying Industrial Zone (QIZ) program. Statistics on current imports and utilization of the preference programs are presented. The renewal, extension, and expansion of these programs creates significant opportunities for duty-free sourcing. Details on rules of origin, eligible countries, and export growth under these programs are summarized.

1. DUTY FREE
SOURCING AND
AMERICAN TRADE
PREFERENCE
PROGRAMS
Opportunities and Challenges

2. OVERVIEW OF TEXTILES AND APPAREL
Total American Imports of Textiles &
Apparel: $107. 4 billion (2014)
 Approximately - $82 Billion in Apparel
- $25 Billion in Textiles
 Growth in textile and apparel imports
between 2013 and 2014: 2.6%
 A growth of $2.7 billion
 Current environment presents opportunity for
investment
93.1 93.3
100.9
107.4
110.4
2008 2010 2012 2014 2015
Total U.S. Textiles &
Apparel Imports by year
($billions)

3. CURRENT TEXTILES AND APPAREL IMPORTS
0
5
10
15
20
25
30
35
40
45
China Vietnam CAFTA India NAFTA Indonesia Bangladesh AGOA+QIZ+
HELP & HOPE
APPROX. IMPORTS IN $BILLIONS (2014)
$5 Billion
$2.9 Billion
$6 Billion
$1.5 Billion
$10 Billion
$41 Billion
$6.7 Billion
$8.2 Billion
$5.1 Billion
• Currently $2.9 Billion come from
AGOA, QIZ, and HELP & HOPE
programs
• Represents big growth potential
for duty-free sourcing
$6.2 billion
$1.2 billion $840 Million $930 Million $750 million $750 Million
$435 Million
- Duties paid
- Duties Saved

4. SIGNIFICANT OPPORTUNITIES IN TRADE
PREFERENCE PROGRAMS
3 Long-term Strategies for Apparel
 Haiti HELP and HOPE Programs
 Egypt-Israel QIZ Program
 AGOA (African Growth and
Opportunity Act)
Provide potential duty-free
sourcing, often using 3rd
country inputs

5. PREFERENCE PROGRAM UTILIZATION
AGOA+QIZ+HELP &
HOPE
3%
Other
17%
China
40%
Vietnam
10%
Bangladesh
5%
Indonesia
5%
India
6%
CAFTA-DR
8%
NAFTA
6%
• Preference programs
combined exports to US:
• Growth of 23% from 2009 to
2014
2014 US Market Share

6. AGOA: 10 year renewal (to
2025) with 3rd party sourcing
Haiti HELP & HOPE II: 5 year
extension to 2025
QIZ: does not expire, recently
expanded
Renewal, Extension and Expansion
of Duty-Free Sourcing

7. Preference Programs: Not a World Away

8. HAITI – HOPE II & HELP
 The HOPE II and HELP programs extended
until 2025
 Maintain enhanced access to the American
market
 Renewed opportunity for growth and
investment

9. HAITI – HOPE II & HELP
 $854.3 million total U.S. imports in 2014
(includes CBTPA)
 8% increase 2013-2014
 12% increase 2014-2015 (YTD)
 60% increase in Haitian textile and apparel
imports since 2010
 Haiti’s share of U.S. clothing imports are up
25% since 2009.
 Textiles and apparel now account for 90%
of Haitian exports and nearly one-tenth of
GDP

10. HAITI’S GROWING COMPETITIVE ADVANTAGES
 Proximity of Haiti to the American market is a major benefit for both
producers and consumers
 Reduction of shipping costs
 Quick turn around from production to the market to meet consumer
needs
 A growing competitive advantage
 A growth in foreign direct investment in recent years.
 Tax benefits
 Benefits of 3rd party sourcing
 Competitive labor costs

11. THE HAITIAN OPPORTUNITY
HOPE- HELP- CBTPA
Presented by Mark D’Sa – US Department of State

12. WHAT’S AVAILABLE IN HAITI ?
HOPE Woven 200,000,000
HOPE Knit 200,000,000
HOPE Value Add 332,915,916
CBTPA Knit 970,000,000
CBTPA T Shirt 72,000,000
Total 1,774,915,916
Available TPLs (SMEs)

13. Based on the last five
years

14. TEE SHIRTS, JEANS, WORK WEAR,
PERFORMANCE KNITS, UNDERWEAR,
WOOLEN SUITS, OVERCOATS,
CHILDREN’S WEAR, SCRUBS
Just some of the products “MADE IN HAITI”

15. THE NUMBERS BEHIND THE PROGRESS
Category 2010 2011 2012 2013 2014
Year Ending
Aug-15
Total US Export (US $$) 517,569,303 701,475,798 730,050,515 803,337,058 854,286,569 904,725,306
Total SMEs
Exported/Utilized
253,059,766 275,627,575 270,374,140 306,440,449 313,930,534 335,151,576
Apparel Industry Jobs 27,144 26,835 29,404 31,462 36,350 40,904
USD Exports per job
$ 19,067.5 $ 26,140.3 $ 24,828.3 $ 25,533.6 $ 23,501.7 $ 22,118.3
SME Utilization / Job
9,322.86 10,271.20 9,195.15 9,740.02 8,636.33 8,193.61
Change in SME
utilization/yr 0 8.92% -1.91% 13.34% 2.44% 6.76%
Change in Jobs
0 -1.14% 9.57% 7.00% 15.54% 30.01%
Change in Exports
0.00% 35.53% 4.07% 10.04% 6.34% 12.62%

16. THANK YOU
Questions / Queries to DSAMC@STATE.GOV

17. QIZ: QUALIFYING INDUSTRIAL ZONE
EGYPT-ISRAEL
Allows Egypt to export products to the
United States duty-free
 Products must contain inputs from
Israel.
Never expires

18. QIZ RULES OF ORIGIN
Eligibility: QIZ factories must
meet a regional value content
of 35%.
 Can include inputs from Israel,
Egypt, and the United States.
Israel’s contribution must be at
least 10.5% of the content
requirement.

19. QUALIFYING INDUSTRIAL ZONES
Since its inception, the
QIZ program has
continued to expand
In total, the program now
encompasses 15
designated zones

20. QIZ EXPORTS
 Egyptian textile and apparel
production have provided
an important source of
exports to the U.S.
 Egyptian operations and
trade have continued
throughout periods of unrest2014
2013
2012
2011
2010
2009
Egypt’s Textiles and Apparel Exports Value To U.S.
$ Export Value
Arab Spring

21. QIZ
Your Duty Free Gateway
to the US Market
Sourcing Journal Summit NYC 2015
Gabby Bar
Israeli Co-Chairman of QIZ committee
Ministry Of Economy

22. What is QIZ?
• A QIZ is an area in Egypt, that was designated by the
United States, from which goods can be exported
duty free and quota free to the United States.
• In order to enter the US duty free and quota free,
these goods must meet the QIZ Agreement criteria
and must be approved by the QIZ Committee.

23. “Win.Win.Win”
• For the U.S:
(a) An unlimited term agreement
(b) Allows unlimited textile and apparel imports to USA, duty free
(c) Access to highly professional, experienced and skilled
Egyptian suppliers
(d) Diversifies the sources of imports into the U.S

24. “Win Win Win”
• For Israel: “Opens” new markets for Israeli export
• For Egypt: Improves competitiveness of their exports to the U.S
• Joint objective: To enhance business and industrial cooperation
and to increase bilateral trade between Egypt and Israel, thus
contributing to the bilateral cooperation and peace!

25. QIZ Rules of Compliance
The final products must undergo substantial transformation
Other inputs- Direct &
Indirect, Local & Foreign
origin
65.0%
Israeli direct inputs
10.5%
Egyptian direct inputs
24.5%*
35.0%
The Final Product
11.7% Minimum
Egyptian inputs
*Up to 15% can also be sourced from the U.S.

26. Israeli Industry
Advanced Technology and Materials!
Fabrics
Zippers
Chemicals
Interlining
Elastics
Labels
Threads
Hangers
Packaging
Washing Materials
Yarn

27. THANK YOU FOR LISTENING!
‫רבה‬ ‫תודה‬
‫شكرا‬

29. Land Area
1 Million KM2
90 Million People
-------------
Labor Force
27 Million
Total Garment Industry Output
$3.2 Billion
Textile & Garment Workers
1,500,000
% of Garment Production
Exported to the U.S.
Over 30 Years of Garment
Export Experience
EGYPT & GARMENT INDUSTRY FACTS

30. • Duty Free
• No Expiration
• No Fabric Restriction
• Stress Tested & Passed!
• Nearly $7.5 Billion in Total QIZ Exports
• Est. $900 MM in 2015 Exports
• Over 700 Certified QIZ Factories
• 15 Designated Zones
• New Zones being added
• Flexibility in Israeli component use

31. 15 Commercial Ports
• High Compliance Standards
• Multiple Ports
• Competitive Pricing
• Air Cargo Service
• Lead time 75 to 120 days
• Qualified Production Personnel
• Quality Control
• Laundry Experts
• Training Institutes
• University Degrees in Textiles
• Banks : Trade Facilitation
• Customs Officials
• Sales & Merchandising
• Experienced Machine Operators
• Product Diversity
• Product Development
• Garment Export Council

32. Egypt to become the leading exporting MENA country in the Textiles industry,
focusing on high and medium value added products catering to the world’s
largest retailers and manufacturers with reliable and agile delivery.
V. Strategic Objectives
 Creation of 1 Million New Job Opportunity
 Train 750,000 Workers, Supervisors and Managers
 Increase exports to achieve USD 10 Billion
 Attract local and Foreign Investments of USD 13.5 Billion
 Increase the Value-Added to 70% of locally manufactured raw materials
VI. Strategic Focus
 Expanding the Industrial Base through Developing and Enhancing the
Competitiveness of local industry
 Backward Vertical Integration of Industry, promoting investments into primary
textiles and fiber production
 Foster Export’s growth and market entry
 Focus on Human Capital Development
 Reform of Government policy

35. AGOA: OPPORTUNITIES AND
POTENTIAL
• Renewal: 10 years (to
2025) with 3rd party
sourcing benefits

36. AFRICA: A HUGE AND DIVERSE OPPORTUNITY
• Sub-Saharan Africa Pop.:
• 800 Million (approx.)
• Pop. Growth: 2.3%
• Economic Growth:
• 4.7% per annum
• Global GDP Avg: 2.4%
• Continued growth + duty free
access to American/EU markets
• well positioned to provide duty-free
sourcing opportunities

37. AGOA ELIGIBILITY
• 41 AGOA participant-nations 26
qualified for textile and apparel
benefits
*South Africa does not qualify as an
LDBC and is ineligible for 3rd party
fabric provision
• Benin
• Botswana
• Burkina Faso
• Cameroon
• Cape Verde
• Chad
• Cote d'Ivoire
• Ethiopia
• Ghana
• Kenya
• Lesotho
• Liberia
• Madagascar
• Malawi
• Mauritius
• Mozambique
• Namibia
• Niger
• Nigeria
• Rwanda
• Senegal
• Sierra Leone
• South Africa*
• Tanzania
• Uganda
• Zambia
AGOA Apparel Provision:
Qualifying Countries

38. AGOA ELIGIBILITY
 AGOA textile and apparel
benefits: Eligibility based upon
progress in:
 Market-based economies
 The rule of law
 Barriers to U.S. trade and investment
 Corruption
 Poverty
 Education
 Human rights
 Labor rights
 Eligibility is reviewed on a yearly basis.

39. RULES OF ORIGIN
Certain apparel allowed to enter the U.S. duty-free
provided one of the following rules is met:
 Apparel made of U.S. yarns and fabrics
 Apparel made of U.S. fabrics and/or knit-to-shape components, from
U.S. yarns and sewing thread
 Apparel made of regional sub-Saharan Africa (SSA) yarns and
fabrics (subject to a cap)
 Apparel made in a designated SSA lesser-developed beneficiary
country (LDBC) of third-country (China, Pakistan India, etc.) yarns
and fabrics (subject to a cap)
 Items containing less than 10% 3rd party fabrics that are otherwise
eligible (de minimis rule)

40. SHORT SUPPLY LIST
Qualification for short supply:
1) Yarns and fabrics designated as ‘not available’
in commercial quantities in the U.S.
2) Yarns and fabrics considered in short supply in
NAFTA
 Short supply items can be sourced from anywhere
and qualify as duty-free
 Not subject to a cap or de minimis rule

41. US IMPORTS THROUGH AGOA (2014)
 Top 10 African textile-apparel exporters to the American market
(Approx. 2014):
 1) Kenya - $380 million
 2) Lesotho - $290 million
 3) Mauritius - $223 million
 4) Swaziland - $55 million
 5) √ Madagascar - $20 million
 6) South Africa - $18 million
 7) Tanzania - $17 million
 8) Ethiopia - $12 million
 9) Botswana - $9 million
 10) Malawi - $4 million
$802,968,443
0
200,000,000
400,000,000
600,000,000
800,000,000
1,000,000,000
Total African Exports
Total AGOA Textile-Apparel Exports to U.S.
Market
2010 2011 2012 2013 2014
$1,035,857,859

42. US IMPORTS THROUGH AGOA
(2014)
Valuable import items:
 Men’s/boys’ woven cotton trousers ($166,081,359)
 Lesotho, Kenya, Mauritius
 Men’s/boys’ woven cotton shirts ($148,078,693)
 Kenya, Mauritius, Ethiopia
 Manmade fiber sweaters ($97,870,263)
 Lesotho, Kenya, Malawi
 Women’s/girls’ woven cotton trousers ($94,570,113)
 Kenya, Lesotho, Mauritius
 Women’s/girls’ knit synthetic fiber trousers ($83,335,904)
 Lesotho, Kenya, Mauritius

43. THE FUTURE OF AGOA
Problem: AGOA has been underutilized
 Only 4 countries achieved a per capita value >$10 for
non-energy AGOA exports
 Mauritius, Lesotho, Swaziland, South Africa
 The countries that focused on textile and apparel
production have benefitted the most

44. GROWING AGOA
Multiple Market Access
Duty free access to the US and EU markets
AGOA Competitive Advantages
Target high duty rate items
Leverage existing production
Only scratched the surface of what is possible

45. OVERVIEW
3 great opportunities for duty free sourcing
Flexibility in 3rd country inputs
 Full range of products
A growing presence in the US market
10 years or more to capitalize on these
investments and strategies

46. Gail W. Strickler
Assistant United States Trade Representative for Textiles and Apparel
For further contact: stricklergw@gmail.com
+1-202-290-7454
www.ustr.gov
Mark D’Sa
United States Department of State
Contact: DSAMC@STATE.GOV
Gabi Bar
Israeli Co-Chairman of QIZ committee
Ministry Of Economy
Contact: Gabi.BarBachar@economy.gov.il
Waleed El-Zorba
Chairman of Nile Clothing Company
Contact: wzorba@gmail.com
Hon. Joshua Setipa
Minister of Trade and Investment
Government of Lesotho
Contact: jsetipa@gmail.com
Karla Magruder
Fabrikology International
Contact: karla@fabrikology.com