AGOA : US Flexes Muscles
Only a few weeks after the US threatened to take action against East African countries that were making moves to ban import of second hand clothes, Tanzania has complied to U.S. demands and opted to lower tariffs.
The move has seen the country escape unscathed as America flexes its muscles through the African Growth and Opportunity Act (AGOA) threatening to cut-off non-compliant countries from the pact.
US President Donald Trump told Congress, AGOA benefits for Tanzania and Uganda are to remain in tacked since the two countries have responded to the warning and lowered tariffs for used clothes from the U.S.
“I commend Tanzania and Uganda for taking corrective steps to address the United States’ concerns…” Deputy US Trade Representative C J Mahoney said in a press statement.
Taking A Stand
Unlike the compliant Tanzania and Uganda, Rwanda, whose president seats on the African Union throne and who was the continent’s representative at the World Economic Forum, has declined to bow to US wills.
As a result the US has issued Rwanda a 60 days ultimatum to comply or have its duty-free status under AGAO suspend.
“The President believes suspension of these benefits, instead of termination of Rwanda’s status as an AGOA beneficiary, would allow for continued engagement with the aim of restoring market access and thereby bringing Rwanda into compliance with the AGOA eligibility requirements,” the media statement details.
The Trouble With Africa’s Industrialization
Earlier this year, East African countries announced the planned ban of used clothe to be implemented 2019.
The goal is to create market for their own upcoming industries particularly in the textile manufacturing industry.
However, the industrialization ambitions are facing challenges as the rest of the world seeks to maintain their market share in the region and pacts like AGAO ensure that they do.
No sooner had the EAC countries made the planned ban announcement than the U.S. reacted.
The US Trade Representative (USTR) issued the caution 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.
Harry Sullivan, the Acting Head of Economic and Regional Affairs at the Africa Bureau of the US State Department told press that USTR will ‘review’ East Africa’s trade benefits under AGOA.
He said the US cautions the EAC to drop the ban plans and to also cut tariffs on second hand clothes.
“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 decided at the summit. The summit came and went, now the US is keeping true to its warning.