Rwanda, Tanzania, Uganda risk losing access to US Market

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Rwanda, Tanzania and Kenya risk losing access to the American market through the African Growth and Opportunity Act (AGOA) following plans by the East African member states to ban imports of second-hand clothes and shoes.

The Office of the U.S. Trade Representative announced this week the initiation of an out-of-cycle review of the eligibility of the three nations to receive benefits under the act after concerns that the planned ban will impose significant economic hardship on the US used clothing industry.

The launch of the review is in response to a petition filed by the Secondary Materials and Recycled Textiles Association (SMART), which asserts that a March 2016 decision by the East African Community, which includes Rwanda, Tanzania, and Uganda, to phase in a ban on imports of used clothing and footwear is imposing significant economic hardship on the U.S. used clothing industry.

Through the out-of-cycle review, USTR and trade-related agencies will assess the allegations contained within the SMART petition and review whether East African countries are adhering to AGOA’s apt requirements.

The Office of the United States Trade Representative (USTR) is the United States government agency responsible for developing and recommending United States trade policy to the President of the United States, conducting trade negotiations at bilateral and multilateral levels, and coordinating trade policy within the government through the interagency Trade Policy Staff Committee (TPSC) and Trade Policy Review Group (TPRG).

Six EAC countries Tanzania, Kenya, Uganda, Rwanda, Burundi and South Sudan proposed fully ban of imported second-hand clothes and shoes by 2019, arguing it would help member countries boost domestic clothes manufacturing industry.

However, the USTR singled out for review only three EAC countries of Tanzania, Rwanda and Uganda. Kenya is said to have reversed tariff increases effective July 1st this year and committing not to ban imports of used clothing.

Through the review, USTR and trade-related agencies will assess the allegations contained within the Secondary Materials and Recycled Textiles Association (SMART) petition and review whether the three countries are adhering to AGOA’s eligibility requirements.

The AGOA trade programme provides eligible sub-Saharan countries duty-free access to the United States. Elimination of barriers to US trade and investment is one of the statutory eligibility requirements to qualify for AGOA trade benefits. Others are making continual progress toward establishing market-based economies, the rule of law and political pluralism.

Second-hand clothing, mostly from Europe and North America, are a mainstay of local clothing markets in Africa as they are less expensive than locally produced garments,

East Africa imported more than $150 million worth of second-hand clothing in 2015 alone.

Most of the secondhand clothing sold around the world comes from charitable donations by European and North American residents who are unaware the clothing will be sold, Brooks said.

The United States and the United Kingdom are by far the largest exporters of used clothing.

Statistics show that the US AGOA imports from Tanzania, Rwanda and Uganda increased to 43 million US dollars last year up from 33 million US dollars a year before while US exports to the countries jumped to 281 million US dollars from 257 million US dollars in 2015.

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