East Africa: 'Plan to ban used clothes, shoes puts AGOA gains at risk'
East Africa's eligibility to retain duty-free access to markets in the United States under the Africa Growth and Opportunity Act (Agoa) is at risk following concerns raised by Washington about the bloc's decision to phase out the importation of second-hand clothes starting this year.
According to the US, the EAC presidents' directive to ban importation of used clothing will not spur additional US textile and apparel investment in the region, which is largely export-oriented and based on Agoa tariff preferences.
In a senior trade officials' meeting dabbed "US Beyond Agoa - Trade and Investment," the American officials said that import substitution policies like the EAC's ban on second-hand clothes may deter Washington from investing in the region.
The US government now says it will file a petition at the Office of the US Trade Representative (USTR) to initiate an out-of-cycle review of certain EAC partner states.
If East Africa is found not to be making progress in meeting the eligibility requirements, the US is likely to terminate the designation of the EAC as a beneficiary of duty-free market access under Agoa.
A report from the meeting between officials from the EAC and US shows that the regional bloc maintained its stand on the ban, saying that the heads of state prioritised industrialisation as the key pillar of its development strategy and this hinges on the textile, leather and automotive sectors. Phasing out imports of used clothing was part of the EAC's industrialisation policy.
According to last year's EAC heads of state directive, the phasing out of importation of used textiles and footwear will be undertaken gradually over three years.
"The EAC wants to promote integrated industries in the textile and leather sector and strategies are being developed to ensure procurement of textile and footwear requirements from within the region where quality and supply capacities are available competitively," said the Community officials.
They added that the US should look at the EAC strategy as an opportunity for enhancing US investment in the textile and leather sector in the region. This, they said was a result of consultations held with key stakeholders on the matter, including manufacturers of new clothing, as well as importers, sellers and buyers of used clothing.
The EAC officials have, however, asked to meet with American officials before the next US review for Agoa eligibility.
Agoa provides for duty-free entry of goods into the US from designated sub-Saharan African countries, including the EAC partner states, and applies to both textiles and non-textile goods.
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
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
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
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
AGOA boosts Kenya's textile exports to US, sector sees 7.2% growth
The African Growth and Opportunity Act (AGOA) has benefitted Kenya’s textile and apparel sector, leading to monthly exports to the tune of Sh4.5 billion, or Sh150 million per day, last year, according to a study by London-based Institute of Economic Affairs (IEA). The programme has had a positive impact on the country’s export-processing zones (EPZs), especially in the textile and garment sector. Kenya is the second-largest exporter of...
08 August 2023
'US-EAC trade pact comes into life amid disharmony'
The Trade and Investment Framework Agreement (Tifa) between the US and the East African Community has begun taking shape, with a section of the bloc’s members keen on it and others still biding their time. This week, US officials were in Nairobi to conduct part of the negotiations on the US-Kenya Strategic Trade and Investment Partnership and to meet Trade ministers from the region. On July 18, Trade ministers from Tanzania, Uganda,...
23 July 2023
Kenya's president meets US delegates on trade and investments
Kenyan President William Ruto has today held talks with US Trade Representative, Ambassador Katherine Tai. The discussions were based on US trade policy. Ruto said that the country is ready to strengthen the already existing relations between the two nations. "We will stretch our ties beyond the African Growth and Opportunity Act (AGOA) in the wake of advanced technology and climate change, for the full exploitation of our trade potential,"...
19 July 2023
US trade rep in Nairobi as Kenya's solo deals worry the EAC block [incl. Readouts]
The US trade representative is in Nairobi to co-lead a meeting that seeks Kenya's partnership in a fresh trade deal. The Trade and Investment Framework Agreement (TIFA Council) is pursuing various agreements even as regional peers express concern over Kenya's solo approach. Yesterday, Trade Representative, Katherine Tai met patron circle members of the American Chamber of Commerce-Kenya (AmCham Kenya) ahead of today's...
17 July 2023
US boosts Kenya apparel industry with $55m in new trade deals
The US is giving Kenya $55 million for expansion of export processing zones in a move that will boost Nairobi’s apparel exports. US initiative Prosper Africa and the US Embassy announced the funding at the launch of the US-Kenya Business Roadshow held on April 25 in New York. The announcement was part of the commitments made by President Joe Biden at the US-Africa Leaders’ Summit last year. The funds will be channelled under USAid and...
29 April 2023