'US threats force EAC to back down on secondhand clothes ban' - Article
East African countries have backed down on their initial stand on banning the importation secondhand clothing.
Instead they will use of tax measures and incentives to spur local manufacturing.
During the EAC Heads of State retreat on infrastructure and health financing in Kampala, the EAC presidents resolved to prioritise the development of a competitive domestic textile and leather sector to provide affordable clothes and leather products in the region.
“Partner states should now focus on boosting the EAC textile and footwear manufacturing in the region through measures that will not jeopardise the African Growth and Opportunity Act (Agoa) benefits,” said the presidents in a joint statement.
The heads of state further directed the Council of Ministers to put in place mechanisms that support textile and leather manufacturing in EAC, and report progress in the next Summit.
They also directed the Secretariat to request the US to give the bloc more time to finalise consultations to address Washington’s concerns on used clothes imports.
Kenya will continue applying an ad valorem rate of 35 per cent and specific rate of $ 0.2 per kg on imported secondhand clothing while Rwanda will continue to apply both ad valorem and specific rates of 35 per cent and 40 US cents respectively. Burundi will continue applying ad valorem rate of 35 per cent and specific rate of 40 US cents per kg.
The EAC countries had jointly proposed a specific rate of $0.4 per kilogramme from July 2015.
“The decisions basically show no harmonised regional position. Each country is being allowed to do what it deems to be interests,” said Peter Kiguta, a regional trade expert. He said the Customs Union Protocol was not being respected.
“As per the Customs Union, EAC countries are supposed to make joint decisions on matters of foreign trade. Of late it seems adherence to EAC decisions is based on selfish country interests,” Mr Kiguta added.
Agoa ban threat
The decision by the EAC to tone down on their 2016 stance to completely ban importation of secondhand clothing into the region follows a decision by the US in the Out-of-Cycle Review to temporarily suspend Uganda, Rwanda and Tanzania from duty-free access to US and Agoa for all eligible exports until they reverse the ban.
Kenya had requested the SCTIFI for a stay of application of the import tariff on used clothing to apply $0.20 per kg and, was therefore, not affected. Rwanda, Tanzania, and Uganda were granted until December to address US concerns on used clothing.
“Kenya wished to be coming with EAC tariff regime to avoid backlash from USA which had hinted at withdrawing Agoa market access preferences. The USA market is becoming more important for Kenya with introduction of direct flights from Nairobi. It would be foolhardy for Kenya to antagonise USA,” said Mr Kiguta.
On February 13, the US acting director for Economic and Regional Affairs Harry Sullivan, asked the heads of state for Rwanda, Tanzania and Uganda to reduce their tariffs to pre 2016 levels and commit not to phase out the imports of used clothes without justification.
“So rather than banning imported used clothing, we believe the most effective domestic growth strategy for the local fashion and apparel industry would be to build its brands and markets for the growing middle class,” said Mr Sullivan.
“In order to continue to receive benefits under the Agoa programme, countries must meet Agoa eligibility criteria, which include eliminating barriers to US trade and investment.
Read related news articles
Kenya: 4th AmCham business summit to advocate for enhanced partnership and investment In US-East Africa trade
The fourth edition of the regional American Chamber of Commerce Kenya (AmCham) Business Summit, the premier platform for strengthening bilateral trade and investment between the United States, Kenya, and East Africa is set to be held on April 24–25, 2024, in Nairobi, Kenya. Kenya’s President William Ruto is confirmed as Chief Guest, leading a government delegation to the summit that aims to expand commercial opportunities and markets....
19 March 2024
US President Biden to welcome Kenyan President Ruto to the White House in May
President Joe Biden plans to welcome Kenyan President William Ruto to the White House in May, hosting a state visit after reneging on his promise to visit Africa last year. White House press secretary Karine Jean-Pierre said Friday that the visit set for May 23 will mark the 60th anniversary of U.S.-Kenya diplomatic relations and "celebrate a partnership that is delivering for the people" of both countries while affirming "our strategic...
18 February 2024
'Nigeria missing as Kenya, Ghana tap AGOA opportunities to boost foreign exchange earnings'
Africa’s biggest economy is still failing to tap the opportunities that the African Growth and Opportunity Act (AGOA) present to boost its foreign exchange, amid acute dollar shortages. The AGOA has been on for over twenty-three years as it was enacted in 2020. In 2015, the program was modernised and extended to 2025, implying that there are only about 15 months before the window closes. Some countries have taken advantage of the AGOA more...
05 February 2024
Uganda's AGOA suspension
Uganda's recent suspension from the preferential trade arrangement known as the African Growth Opportunity Act (AGOA) by the United States has undoubtedly posed a challenge, potentially rendering the the East African country's products less competitive in the U.S market. However, amid this storm, the resilience and quality of Ugandan products could serve as a sturdy anchor, allowing the East African nation to weather the adverse effects of...
13 January 2024
CTI and CCA coming together to develop a US-Tanzania trade and investment strategy
The Confederation of Tanzania Industries (CTI) has partnered with the Corporate Council on Africa (CCA) to develop a strategic approach to increase US-Tanzania trade and investments. The call was made by Ambassador Elsie Kanza, the Tanzanian Ambassador to the US. Among many other things, Ambassador Kanza tasked CTI to bring more visibility and awareness to the opportunities to expand Trade and investment between Tanzania and the USA under the...
13 November 2023
'Can Uganda wiggle out of AGOA puzzle?'
Uganda faces the possibility of being removed from the African Growth and Opportunity Act (AGOA) beneficiary states thanks in no small part to what the United States calls human rights violations. This comes hot on the heels of the recent enactment of anti- homosexuality legislation in Uganda. The programme offers duty-free access to the world’s largest economy for Sub-Saharan African countries that meet democratic criteria, which is...
12 November 2023
Kenya-US to deepen ICT, apparel and agriculture trade
Kenya and United States are in talks to identify areas of interest in information communication technology (ICT) sector that can interest US firms. A meeting between The US Ambassador to Kenya, Megan Whitman, and the Cabinet Secretary for Investments, Trade, and Industry Rebecca Miano, the states sought cooperation in six key areas. The meeting laid the groundwork for an enhanced collaboration between Kenya and the United States in...
09 November 2023
Uganda criticises US plan to exclude it from duty-free trade programme
Uganda on Wednesday criticised a US move to eject it and other African countries from accessing a tariff-free trade programme, saying the action was to punish African countries that are resisting the imposition of the West's cultural values. US President Joe Biden said on Monday that he intended to end the participation of Uganda, Gabon, Niger and the Central African Republic in the African Growth and Opportunity Act (AGOA) trade...
05 November 2023
New deal for African, US companies to partner under AfCFTA
African and US companies will soon enjoy a partnership of trading and investment building on provisions provided under the African Continental Free Trade Agreement (AfCFTA). This is according to a new Memorandum of Understanding signed between the AfCFTA Secretariat and Corporate Council on Africa – an American organisation devoted to fostering US-Africa business relations – with an aim to increase private sector support and involvement...
04 November 2023
Notice of intention to terminate AGOA preferences for Uganda, Gabon, Niger and the Central African Republic, reinstate Mauritania
Dear Mr. Speaker: (Dear Madam President:) In accordance with section 506A(a)(3)(B) of the Trade Act of 1974, as amended (19 U.S.C. 2466a(a)(3)(B)), I am providing advance notification of my intent to terminate the designation of the Central African Republic, the Gabonese Republic (Gabon), Niger, and the Republic of Uganda (Uganda) as beneficiary sub-Saharan African countries under the African Growth and Opportunity Act (AGOA). I...
31 October 2023
Kenya President Ruto joins US-Kenya business roadshow in San Francisco
Kenya's President William Ruto will address leading US technology companies and investors on Friday at the US-Kenya Business Roadshow in San Francisco organised by the American government’s Prosper Africa initiative. The roadshow - also co-organised by the US Embassy in Nairobi - highlights the business and investment potential in Kenya’s booming tech sector, a statement from the US Embassy in Kenya said. The event is part of a...
15 September 2023