TRALAC - Trade Law Centre

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

Saturday, 24 February 2018 Published: | HRISTABEL LIGAMI

Source: The East African

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.

Related News

Tanzanian home textiles firms gain insights on US market

Tanzanian home textiles firms gain insights on US market

Tanzanian textile companies received a boost to their efforts to export products to the U.S. after attending a half-day workshop hosted by the USAID Hub. Fifteen Tanzanian design enterprises learned about U.S. market opportunities on January 15 in Dar es Salaam from Margaret Bishop, an expert in textile and apparel production and quality management. Ms. Bishop provided the...

24 January, 2019
East Africa exports to the US hit $1bn in the year to September 2018

East Africa exports to the US hit $1bn in the year to September 2018

Exports from East African countries to the US reached about $1 billion between October 2017 and September 2018, a 17 per cent increase from the same period the previous year. The United States Agency for International Development’s East Africa Trade and Investment Hub said apparel dominated the region’s sales at 84.4 per cent of exports. The Africa Growth and...

31 December, 2018
'Here's why the used clothing trade deserves more attention'

'Here's why the used clothing trade deserves more attention'

While friction over the ban of used clothing exports from the US to East Africa seems to have come to an end, some fundamental issues still remain, according to Shannon Brady and Sheng Lu from the University of Delaware. Their latest research throws up complex economic, social, legal and political factors linked with the trade in second-hand clothes and questions the...

11 December, 2018
Uganda's plan for more trade under AGOA

Uganda's plan for more trade under AGOA

Uganda is working on a plan to increase its exports to the US through the Africa Growth and Opportunity Act (Agoa) in the next five years. Under Agoa, a US trade legislation enacted in May 2000, sub-Saharan African countries export more than 6,000 different products duty free. The Act originally covered an eight-year period from October 2000 to September 2008, but...

28 November, 2018
Kenya: US Ambassador Godec’s remarks on direct flight launch between Nairobi and New York

Kenya: US Ambassador Godec’s remarks on direct flight launch between Nairobi and New York

Waheshimiwa, mabibi na mabwana, hamjambo! Habari za jioni? This is an historic day for Kenya and the United States!  And I am very glad to be here to share it with you.  If there’s one phrase that sums up today, it has to be: when you dream big “the sky’s the limit”! The United States and Kenya have a long and extraordinary partnership.  Over 55...

28 October, 2018
Hello, America! USAID, direct flights to increase AGOA exports to US

Hello, America! USAID, direct flights to increase AGOA exports to US

The US Agency for International Development (USAID) Hub will from November 2018 to March 2019 provide direct support in the audit and Worldwide Responsible Accredited Production (WRAP) certification process. Already, USAID is helping companies in the East African region become more export competitive. WRAP is a minimum standard for social compliance where US textile and...

19 October, 2018