Trade Wars: US Exporters Worried Over East Africa 2nd Hand Clothes Ban
Only days before the East African Community (EAC) Heads of States meet in Uganda for the 19th Heads of State Summit the US has warned its leaders that if they go ahead and ban importation of used clothes, they may lose the trade benefits they now enjoy with the US.
In 2000, the US and the EAC signed the African Growth and Opportunity Act (AGOA) which promotes trade between them. However, as the region industrializes, it is looking for market at home.
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The US Trade Representative (USTR) issued the caution in to protect US traders after the US Secondary Materials and Recycled Textiles Association (SMART) lodged complaints with the USTR over the planned 2019 ban.
USTR maintains that the ban is against all that AGOA stands for and will affect traders in the US.
Among other things, AGOA which was inked eight years ago, calls for better economic ties between East Africa and the US through more frequent and taxed trade.
Speaking to press at the turn of the week Harry Sullivan, the Acting Head of Economic and Regional Affairs at the Africa Bureau of the US State Department said USTR may very well ‘review’ East Africa’s trade benefits under AGOA.
Furthermore, the US is not only asking for the ban plans to be dropped but also for tariffs on second hand clothes to be lowered. But since 2016, one year after AGOA was extended, tariffs have actually gone north incentives for local manufacture have been issued.
He said the US is aware that EAC Heads of States will be meeting at the summit and they want the leaders to discuss and reverse their decision.
“We are asking those countries to do two things. One is to decrease their tariffs to their pre-2016 levels, and the second thing we’re asking is to commit that aside from health or sanitary reasons, not to phase out the export of used clothing,” he said.
He further warned that ‘the US is watching EAC moves closely’ and that the US will make its move based on what the EAC leaders decide at the summit.
The AGOA Pact
The African Growth and Opportunity Act, or AGOA is a legal pact approved by the U.S. Congress in May 2000 and signed by President George W. Bush.
AGOA allows East African countries that meet given terms, to export their goods into the U.S. without the usual tough restrictions. In turn, America also gets some preferential treatment of their products.
The 15 year pact was extended in 2015 by 10 years taking it to 2025
‘In March 2016, the head of states in the EAC, which comprises of Uganda, Kenya, Tanzania, Rwanda, Burundi and South Sudan agreed to ban import of used clothes in the region in three years as part of the EAC Vision 2050 and the Industrialization Policy to enhance a manufacturing sector that currently contributes 8.7% to the regional Gross Domestic Product to 25% by 2032.’