TRALAC - Trade Law Centre

US reconsiders AGOA eligibility for three African countries

Tuesday, 20 June 2017 Published: | Tara Donaldson

Source: Sourcing Journal Online

Africa appears to now be getting more of the Trump Administration’s attention when it comes to trade.

Commerce Secretary Wilbur Ross said last week that the U.S. has to move from an “AID-based” relationship with Africa to one that’s more “TRADE-based,” which could mean eliminating a trade preference program like the African Growth and Opportunity Act in favor of bilateral trade agreements.

Now, in an out-of-cycle review (see related announcement HERE), the Office of the United States Trade Representative will be looking into whether Tanzania, Uganda and Rwanda should still be eligible to receive duty and tariff free benefits under AGOA.

To take advantage of the benefits that the trade program brings, countries are expected to make ongoing progress toward establishing: a market-based economy, rule of law, political pluralism, elimination of barriers to U.S. trade and investment, economic policies to reduce poverty, a system to combat corruption and bribery, and the protection of internationally recognized worker rights.

USTR said it initiated the review of the three nations in response to a petition, and will be accepting requests from the public to appear for a hearing to address whether the countries should still continue receiving benefits.

“This review could result in the termination of the designation of any of the countries as an AGOA beneficiary or the withdrawal, suspension, or limitation of duty-free treatment under AGOA with respect to articles from any of these countries,” trade law firm Sandler, Travis and Rosenberg said in a statement on Tuesday.

The petition for review was filed by the U.S. Secondary Materials and Recycled Textiles Association (SMART) over the East African Community’s (EAC) decision to ban imports of secondhand clothing.

The EAC said last year that it wants to phase out the importing of used clothing into the region by 2019, but SMART has said the ban contradicts AGOA requirements around eliminating barriers to U.S. trade and putting policies in lace to reduce poverty.

A public hearing on the countries’ eligibility will take place on July 13 after which the USTR will make recommendations to President Trump about whether the countries in question are meeting AGOA’s requirements.

 

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