AGOA: Win-win, then win-lose; soon lose-lose in EAC?

AGOA: Win-win, then win-lose; soon lose-lose in EAC?
22-02-2018 | By Karegeya Jean Baptiste | Hit 48 | Comment

Washington nowadays puts pressure on Kigali, Dodoma and Kampala against secondhand clothe embargo since 2016, only one year after president Obama signed the renewal of the African Growth and Opportunity Act (Agoa) for a period of ten years. Negotiations are under process, the meeting ahead before end of Feb will determine and adjust the win or lose balance.

The AGOA system allows several products from around 40 sub-Saharan African countries to benefit from preferential access to the US market. In a statement, Michael Froman, the US Trade Representative expressed satisfaction: "The Agoa law is the cornerstone of our trade relationship with Africa for 15 years."

Rwanda, Uganda and Tanzania decided in 2016 to increase customs barriers on imports of used clothing. Under pressure from US industry, the United States calls for a lifting of these restrictions.

According to Jeune Afrique, the US diplomat Harry Sullivan,expressed the wish that the countries of the East African Community (EAC), to cancel the restrictions of 2016 on imports of second-hand clothes. The administration of Donald Trump also wants these states to commit themselves resolutely to gradually eliminate the non-sanitary barriers imposed on these imports.

However, Kigali, Dodoma and Kampala, justified these measures by the need to protect the local textile industry, although Washington is not convinced.

As the matter of facts, the professional association Secondary Materials and Recycled Textiles Association (SMART), also pushes US leaders.

This association of some one hundred companies in the second-hand clothing sector, asked for a review of the benefits accruing to these countries as a result of AGOA (which allows nearly 6,000 African product lines to enter the United States without customs duties).

This analysis, conducted since June 2017 by the Office of the US Trade Representative, may conclude with a suspension of the exemptions granted to exports to the United States from the three countries concerned.

Fall of US imports

Following the restrictions imposed by the EAC, US exports of textile products to Rwanda, from $ 420,000 (€ 342,000) in 2015, dropped to $ 130,000 in 2017, while Rwandan exports to the United States in the framework of the AGOA went up from 435 000 to 2.16 million dollars.

The Rwandan Minister of Commerce, together with his Ugandan and Tanzanian counterparts; have been "very effectively" informed of the risks, according to Harry Sullivan.

Though, as the first meeting took place in early February to find a solution, the second is planned before the end of February. The outcome, according to the US diplomat, will determine how to proceed.

Let’s hope the winner or loser will be known then! Will Rwanda, Uganda and Tanzania give up promotion of local made clothes? Will USA tolerate this decline while SMART is pushing? Or both sides will get a compromise? We only wait in one week.

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