Trade Policy Brief — August 2026
Published 12 August 2026 · By Dominique Zuffour
AGOA extended to 2028 — two more years, but the clock is still ticking.
On 12 August 2026 the US Senate voted 90–6 to extend AGOA through 31 December 2028 — two years beyond the current year-end expiry. The House must still concur with the Senate version (expected September), but the decisive margin signals strong bipartisan support. For Madagascar's textile sector — 100,000 direct workers, $700M in annual US exports — this is the most significant trade-policy development since the 2015 ten-year renewal. But the extension comes with the same structural question that has shadowed AGOA for a decade: how long can the Third Country Fabric provision survive? Here is what the vote means, what changes operationally, and what to plan for 2028 and beyond.
90–6
Senate vote margin
Bipartisan support — one of the strongest AGOA votes in the programme's history. Signals deep Congressional commitment to US-Africa trade.
$700M+
Madagascar textile exports to US
Annual revenue at stake. In 2024, Madagascar was sub-Saharan Africa's second-largest AGOA apparel exporter after Kenya ($533M).
500,000+
Jobs dependent on AGOA
~100,000 direct EPZ workers (majority women), plus ~400,000 in indirect roles — transport, subcontracting, services, and commerce.
Dec 2028
New expiry date
Two additional years of certainty. The longest runway since the 2015 ten-year extension. Allows multi-year investment planning.
Timeline
From 2000 to 2028 — the full arc.
2000
AGOA enacted
African Growth and Opportunity Act passed by US Congress. Madagascar designated AGOA-eligible from inception — a foundation for EPZ apparel investment.
2009 – 2014
Suspension and reinstatement
Madagascar suspended from AGOA after the 2009 political crisis. Reinstated in 2014. The textile sector rebuilt over the following decade, reaching ~$355M in US apparel exports by 2024.
30 Sep 2025
AGOA lapses again
The most recent authorisation expires. For four months, Madagascar exports to the US lose duty-free entry and pay MFN rates — triggering thousands of temporary layoffs in EPZ factories.
3 Feb 2026
One-year reauthorisation
President Trump signs P.L. 119-75, reauthorising AGOA through 31 December 2026 retroactive to the lapse date. Duty-free restored but only for one year — uncertainty persists.
Jan 2026
House passes H.R. 6500
The House of Representatives passes the AGOA Extension Act 340–54, proposing a two-year extension through December 2028 with bipartisan support.
12 Aug 2026
Senate votes 90–6
The Senate passes H.R. 6500 by a decisive 90–6 margin, extending AGOA through 31 December 2028 and preserving the Third Country Fabric provision. The bill returns to the House for final concurrence.
31 Dec 2028
New expiry date
AGOA preferences currently expire on this date. Any further extension or modernisation — including potential changes to the Third Country Fabric provision — requires fresh legislation.
The Third Country Fabric question
The provision that makes or breaks Madagascar's textile model.
What the TCF clause does
The Third Country Fabric provision allows Madagascar — which has no significant domestic yarn or fabric production — to import textiles from Asia (primarily China) and still qualify finished garments for duty-free AGOA entry. Without it, Madagascar cannot compete with Asian manufacturers on price.
Why it matters now
Roughly 70% of Africa's AGOA apparel revenue uses Chinese-origin fabric under TCF. US trade hawks have flagged this as a loophole that benefits China more than Africa. Any 'AGOA 2.0' or Reciprocal Trade Agreement could tighten or phase out TCF — making it both a survival clause and a political vulnerability.
What Madagascar should watch
USTR has signalled AGOA 'modernisation' aligned with America First policy. The 2028 expiry creates a natural legislative moment where TCF conditions may change. Madagascar's GEFP has set a target of 250,000 textile jobs — achieving that requires TCF stability through at least the early 2030s.
Sector impact
Who benefits — and by how much.
EPZ apparel & garments
High — positive
Direct beneficiary. Duty-free access restored through 2028. TCF preserved. The 14.1% decline in US AGOA apparel imports (Jan–May 2026) should reverse as buyer confidence returns. factories in Antananarivo, Antsirabe, and Toamasina zones benefit most.
Seafood & crustaceans
Low
Most Madagascar seafood enters the US at low MFN rates regardless of AGOA. The extension is welcome but not material to this sector's US competitiveness.
Vanilla & essential oils
Low
Vanilla beans and essential oils enter the US at zero or near-zero MFN rates. AGOA status is not the binding constraint — global supply dynamics are.
Handicrafts & raffia
Medium
Mixed exposure. Some artisanal HS lines benefit from AGOA preferences. Exporters should verify per-SKU classification to confirm continued duty-free treatment through 2028.
What to do now
Five actions for the next 30 days.
The Senate vote is a strong signal, but the bill is not yet law. These actions apply regardless of the final legislative outcome.
1
Lock in multi-year buyer commitments
The two-year extension gives US buyers certainty they lacked in 2025. Use this window to negotiate 2–3 year supply agreements with key accounts — especially for complex garment categories (men's suits, intimates) where switching costs are high.
2
Resume paused investment
Several EPZ factories entered technical unemployment during the 2025 uncertainty. With preferences now secured through 2028, restart capacity expansion plans — particularly for categories where Madagascar competes on skill rather than just cost.
3
Maintain dual-market strategy
AGOA 2028 does not eliminate the 2029 cliff risk. Continue building China (LDC zero-tariff, open-ended), EU (EBA), and UK (DCTS) market access in parallel. The best protection against the next AGOA disruption is not needing it as much.
4
Verify duty refund eligibility
The extension is retroactive to 30 September 2025. Importers who paid MFN duties during the gap periods can file refund claims with CBP. Work with US-side brokers to ensure all eligible entries are claimed — the window may be time-limited.
5
Monitor the House concurrence vote
The Senate passed H.R. 6500 on 12 August 2026. The House must concur with the Senate version before it goes to the President. Expected in September when Congress returns from recess. Until signed into law, the extension is not final.
Questions we get
AGOA 2028 — operator FAQ.
- Has AGOA been extended beyond 2026?
- Yes. On 12 August 2026 the US Senate voted 90–6 to pass H.R. 6500, the AGOA Extension Act, extending duty-free treatment for eligible sub-Saharan African countries through 31 December 2028. The House passed an earlier version in January 2026 (340–54) and must now concur with the Senate version before the bill goes to the President for signature. The extension is retroactive to 30 September 2025.
- What does the extension mean for Madagascar garment exporters?
- Madagascar EPZ garment exports to the US — approximately $355M in 2024, employing over 100,000 workers directly — will continue to enter duty-free through at least December 2028. The Third Country Fabric provision, which allows Madagascar to source yarn and fabric from Asia while still qualifying for duty-free treatment, is preserved. This is the provision the entire Malagasy textile industry depends on.
- When does the House need to vote?
- The House is currently in recess and is expected to take up the Senate version when it returns in early September 2026. Given the Senate's 90–6 margin and the House's earlier 340–54 vote on its own version, passage is widely expected. However, the process is not complete until the House concurs and the President signs.
- What are the duty refund implications?
- The extension is retroactive to 30 September 2025 — the date AGOA last lapsed. Importers who paid Most-Favoured-Nation duties on Madagascar-origin goods entered between October 2025 and the original February 2026 reauthorisation can file retroactive duty refund claims with CBP. The deadline for filing was 2 August 2026 for the original gap; consult your broker for the updated window under the new legislation.
- Is this the final renewal?
- The extension runs to 31 December 2028, giving the textile sector two additional years of certainty. However, USTR has signalled intent to 'modernise' AGOA under America First trade policy. The Third Country Fabric provision — which accounts for roughly 70% of Africa's AGOA apparel revenue using Chinese-origin fabric — may face revision in any successor programme. Madagascar should use the 2027–2028 window to diversify markets and build optionality.
- How does this affect the China zero-tariff option?
- Madagascar's duty-free access to China under the LDC scheme is open-ended and unaffected by AGOA. The two frameworks are complementary, not competing. Smart exporters will maintain both US and China market access to reduce concentration risk.
Planning 2027–2028 production cycles? Let us model your AGOA position per HS code.
Send us your top SKUs and US destinations. We'll map AGOA eligibility, the TCF position, the reciprocal-tariff layer, and a landed-cost schedule you can share with your buyer — plus a dual-market strategy for 2029 contingency planning.