'US threats force EAC to back down on secondhand clothes ban' - Article

Published date:
Saturday, 24 February 2018
Author:
HRISTABEL LIGAMI

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.

Share this article

View related news articles

Kenya: Manufacturers push for 15-year AGOA extension

Kenyan manufacturers have asked the Trade ministry to request Washington to extend the existing duty- and quota-free access to the expansive US market window for another 15 years as the two countries prepare for talks over a long-term bilateral trade deal. The Kenya Association of Manufacturers, the sector lobby, argues that uncertainty over the more than two decades-Growth and Opportunity Act (AGOA) deal, which expires in two years, is...

02 March 2023

Kenya and US complete first round of trade talks

Kenya and the United States have concluded the first round of Strategic Trade and Investment Partnership (STIP) that will form a basis for future bilateral engagements. The Kenyan delegation, led by Trade Principal Secretary Alfred K’Ombudo, hope that the five-day talks on the free trade agreement will bear fruits. The government has been scouting for areas of collaboration that will increase foreign direct investment, promote sustainable...

13 February 2023

Transparent, participatory process needed for US-Kenya Strategic Trade and Investment Partnership

U.S. and Kenyan officials are meeting this week in Washington for the first negotiating round of the U.S.-Kenya Strategic Trade and Investment Partnership (STIP). Public Citizen submitted recommendations for the U.S.-Kenya negotiations to USTR as part of its public comment process last year. Melinda St. Louis, Global Trade Watch director at Public Citizen, issued the following statement: “The U.S. and Kenyan governments...

08 February 2023

Kenyan and US officials to hold discussions on Strategic Trade and Investment Partnership

Trade representatives from Kenya and the US are set to hold an in-person first round of conceptual discussions under the Strategic Trade and Investment Partnership (STIP) in Washington, DC, from February 6th to 10th. The US delegation will be led by Assistant Trade Representative Connie Hamilton and will include representatives from several other government agencies, the Office of the US Trade Representative said in a press release. The two...

06 February 2023

US and Kenya to hold first round under their Strategic Trade and Investment Partnership (STIP)

The United States and Kenya will hold an in-person round of conceptual discussions under their Strategic Trade and Investment Partnership (STIP) in Washington, DC, from February 6-10, 2023.   The United States delegation will be led by Assistant United States Trade Representative Connie Hamilton, and will include representatives from several other government agencies. United States Trade Representative Katherine Tai and then-Kenyan...

04 February 2023

Africa seeks bigger US trade slice for AGOA to make sense

African countries may need more trade privileges with the US even as Washington reviews the African Growth and Opportunity Act (Agoa) meant to expand what the continent will export. At the end of the US-Africa summit in December, Washington pledged to renew Agoa, bringing clarity to uncertainties that had befell exporters from countries such as Kenya. But now experts say the narrow view of Agoa should be expanded to allow them to export more...

11 January 2023

Kenya: Farmers tapping into lucrative silk farming for export

Sericulture or silk farming is practised in many countries, with China and India dominating the global market, accounting for over 60 per cent of the yield. An acre of land can produce silk worth Ksh1,800,000 annually and the product is considered to have a sustainable market in the European Union (EU), the African Growth and Opportunity Act (AGOA - United States)  and Far East Markets. Kenya has a favourable climate for silk farming,...

07 November 2022

Kenyan manufacturers eye US market in growth plan

Manufactures in Kenya are banking on the pending trade deal with the US to grow the sectors’ contribution to the GDP and create jobs. The sector targets a 20 per cent contribution to economy by  2030. This will be driven by an increase in production of high quality products that will help expand supply and grow exports, the Kenya Association of Manufactures (KAM) has said. “AGOA has provided a significant market for Kenya’s...

07 November 2022

Uganda: In the business of exporting to the US

With the desire to bridge the nine months gap between Senior 6 vacation and university admission, Seko Designs was born. As a Year Two university student, Agnes Kitumba Nitunze, the chief executive officer Seko Designs met Elizabeth Bohannon, an American volunteer to start a journey that birthed the company.  “Seko saw that these energetic youth were idle thus some married off, getting early pregnancies while others did not see the...

24 October 2022

Why the US overtook Uganda as Kenya's top buyer of goods - US ambassador

At the end of September 2022, the United States overtook Uganda to be Kenya's leading export market. US ambassador to Kenya Meg Whitman accredited the milestone to the ongoing agreement between Kenya and the America under the African Growth and Opportunity Act (AGOA). According to Whitman, since the implementation of the Act, parallel export to the US increased drastically. "AGOA has been an amazing success story. Just recently the US...

04 October 2022

Kenya businesses 'want continued duty-free access'

The Biden administration has been clear that none of its trade negotiations cover tariffs. That includes talks with the U.K., the EU and the Indo-Pacific region, as well as the Strategic Trade and Investment Partnership talks with Kenya. In Kenya’s case, the country already has duty-free access to the United States for most of its goods under the African Growth and Opportunity Act. But the Biden administration has not said yet...

26 September 2022