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Sierra Leone Business: Rwanda will proceed with the ban on used clothes despite threats by the United States

Rwanda’s President Paul Kagame has insisted that Rwanda will proceed with its plan to phase-out importation of second-hand clothes despite threats from the U.S. that the move could lead to a review of his country’s eligibility for duty-free access to the American market. President Kagame recently made the remarks while addressing a news conference moments after submitting his nomination papers to the National Electoral Commission (NEC).
Kenya, Uganda, Rwanda, Burundi, Tanzania and South Sudan decided to fully ban imported second-hand clothes and shoes by 2019, arguing it would help member countries boost domestic clothes manufacturing.
Secondary Materials and Recycled Textiles Association (SMART); an association of textile companies in the United States of America (USA); members argue that the decision by the East African Community (EAC) to ban imports of used clothing and footwear is imposing significant economic hardship on the USA’s used clothing industry. The petitioners argue that the ban directly contradicts requirements that AGOA beneficiaries work towards eliminating “barriers to United States trade and investment” and promote “economic policies to reduce poverty”.
The Office of the United States Trade Representative (USTR) has, as a result, initiated a review of the eligibility of Uganda, Rwanda and Tanzania to receive benefits under AGOA. The EAC nations are one of the most important markets for U.S. industry’s used clothing exports with direct American exports to the EAC member countries totalling approximately $24 million in 2016. U.S. imports under AGOA totalled $43 million in 2016, up from $33 million in 2015 while exports were $281 million in 2016, up from $257 million in 2015.
The review is further fuelled by efforts from EAC towards the ban. For example Tanzanian Parliament voted in June 2016, to approve a budget that doubled import duties on second hand clothing, increasing the tariffs from 0.2 to 0.4 US dollars per kilogram. During the same month, Kenya and Uganda also announced tariff increases on used clothing imports similar to those announced by Tanzania while Rwanda raised import duties on second hand clothing by from 0.2 to 2.5 US dollars per kilogram.
The petitioners observed that the tariff increases are so high that they amount to a de facto ban on second hand clothes, which made it clear that EAC member states are moving towards the ban.
President Kagame said the situation leads Rwanda to make a choice between continued importation of used clothes and developing the local textile industry.
“Rwanda and other countries in the region that are part of AGOA, have to do other things, we have to grow and establish our industries,” President Kagame said. “We are put in a situation where we have to choose; you choose to be a recipient of used clothes with a threat hanging or choose to grow our textile industries, which Rwandans deserve at the expense of being part of AGOA. This is the choice we find that we have to make. As far as I am concerned, making the choice is simple, we might suffer consequences. Even when confronted with difficult choices, there is always a way,” he added.
Culled: Online Media
By Kylie Kiunguyu on July 6, 2017
Monday July 10, 2017.

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