The minister for Trade, industry and East African Affairs, Francois Kanimba has said that Rwanda’s decision to ban second had imports didn’t target the United States but rather with all countries having trade agreements with Rwanda.
The comment follows recent statement released by the United State Trade Representative (USTR) on Tuesday indicating that it will assess whether Rwanda, Tanzania and Uganda are respecting regulations qualifying them to continue benefiting from African Growth and Opportunity Act (AGOA) trade agreement between the USA and Sub-Saharan Africa.
USTR made the statement based on the petition of Secondary Materials and Recycled Textiles Association (SMART) claiming that EAC countries decision to ban second hand clothes importation is engendering economic crisis to commerce of such goods in USA over reduced market supply.
Talking to IGIHE, Minister Kanimba said the decision of banning second hand clothes was not drawn for US only but applies to all countries with trade agreements.
“We didn’t make a decision for one country but concerns all countries with which we have trade agreements. Surely, we have raised taxes on second hand imports and has reduced such imports. Americans will do whatever they want but we will keep our plan,” he said.
“I can’t assure to change the policy of promoting local plants manufacturing garments. You can’t promote them giving room to second hand importations,” he added.
Minister Kanimba however revealed that worries would arise if the decision coming from the assessment is to remove Rwanda from countries listed on trade agreements with US through AGOA.
“We don’t export enough goods to US, but local small scale plants are concerting efforts to join the market. Indeed our exports would enter free of levies. If removed from the list of countries benefiting from the trade agreements, our people will be subjected to pay taxes like other developed countries,” he said.
The AGOA trade agreement was approved in 2000 by the then American president Bill Clinton and has been recently extended to end in 2025.It brings together 38 countries including Rwanda and offers Sub-Saharan countries trade opportunities with the United States and enhances reduced taxes from the importations and exportations such as clothes, coffee, tea among other agricultural products.
USA follows up whether countries are respecting AGOA regulations and assess new requests to join the body.
Six EAC countries including Rwanda, Burundi, Kenya, Tanzania, and South Sudan have agreed on banning second hand importation by 2019 to promote local products.
Banning second hand garments went in line with increasing taxes. EAC countries are also developing alternatives of setting limits to the manufacturing date of imported used cars.
Through AGOA, Rwanda, Tanzania and Uganda exported to US products worth USD 43 million in 2016 up from USD 33 million in 2015. On the other hand, US exports to Rwanda, Tanzania and Uganda reached USD 281 million in 2016 up from USD 257 million in 2015.
The decision of banning second hand cloths in EAC saw member states agreeing in July 2016 to multiply 25 times their taxes.