The United State of America through, the acting head of the economic and regional affairs unit in the State Department’s Africa Bureau, Harry Sullivan made another call to all East African Communities asking them not place a ban on imported clothes and leather products. He said that the plan will violate conditions set to expand trade and investment in Africa under the African Growth and Opportunity Act (AGOA).
This is coming as East African Community (EAC) leaders are set to converge in Kampala this week for their planned ban on the importation of used clothes by 2019.
About two years ago, the EAC head of states which comprises of Uganda, Kenya, Tanzania, Rwanda, Burundi and South Sudan agreed to ban the import of used clothes and footwear in the region by 2019. This was part of the EAC’s vision 2050 and the Industrialization Policy to enhance a manufacturing sector that currently contributes 8.7 percent of the regional Gross Domestic Product. The EAC wants to serve both the local and international markets which also includes the AGOA market.
Uganda, Tanzania, Rwanda, Burundi and South Sudan have remained committed to making this happen but Kenya pulled out after the region received a threat from the US trade officials.
According to the New Times, the government of Rwanda already deliberated on a strategy to develop the textiles, apparel, and leather industrial sectors. The blueprint on how to implement this strategy has been designed. It is estimated that, if the strategy is fully implemented, it could create 25,655 jobs, increase exports to $43 million and decrease imports to $33 million by 2019 (from $124 million in 2015). The impact on trade balance will result in savings of $ 76 million over the 3-years period. As a result of this, in 2016 Rwanda increased taxes on used clothes from $0.2 to $2.5 per kilogram, while taxes on used shoes increased from $0.2 to $3 per kilogram.
However, during a teleconference last week, Harry Sullivan told The New Times that the regional move to reduce on the importation of second-hand textile and leather products from the U.S. and other countries “will not” help the region achieve its primary target of rebuilding local textile sector which had started booming in the early 1980 and 90s.
“First, it’s job-destroying. The proposed ban will hurt an estimated 300 thousand men and women that work in the used clothing business all across the East African Community and it will also negatively impact at least 40,000 U.S. jobs in the used clothing sector in the United States,” Sullivan added.
However, in an interview, Vincent Munyeshyaka, Trade and Industry Minister maintained that despite the consequences of being locked out of AGOA, Rwanda has to make a choice between continued importation of used clothes and developing the local textile and shoe industries and is keen on the latter.
“Rwanda’s stand has not changed. we want to build domestic textile industry, we want to promote Made-in-Rwanda and close the trade deficit gap by reducing importation of goods which we can locally produce such as clothes and shoes,” Munyeshyaka said.
Robert Opirah, Head of Trade and Investment department at the Ministry of Trade said the U.S’ current stand contradicts what AGOA stands for let alone what was agreed upon in 2015 when the second AGOA legislation was passed in Washington.
“In 2015 everyone left Washington with a common AGOA response strategy that they would take advantage of the facilitation to grow domestic industries and serve that market. In facilitating the growth of local textile and shoe industries we are doing exactly what was agreed on and they (U.S) are saying ‘no you can’t. We will keep serving you with our second-hand clothes. You can’t grow your industries’. It beats my understanding,” Opirah said.
Meanwhile, Olivier Nduhungirehe, the State Minister for Foreign Affairs, Cooperation and East African Community also affirmed the EAC Heads of State stand on used clothes remains. He added that the U.S was offered a number of options to consider as the EAC implements its plans.
“We are not banning second-hand clothes. Our offers to the U.S were to look into the rule of origin for the used clothing (because most of them are not actually made in the U.S), ensure maximum hygiene precautions, not import underwear, leggings and similar outfits,” Nduhungirehe said.