US seeks to resolve trade conflict with Rwanda over mitumba

Tuesday July 10 2018

second-hand clothes, mitumba

Traders sell second-hand clothes at an open air market in Kenya. FILE PHOTO | NATION 

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The United States is seeking ways to resolve trade dispute with Rwanda over tariff on importation of used clothes and shoes locally known as mitumba.

"We're trying to figure out a way forward that makes both of us satisfied with the outcome," Assistant US Trade Representative for Africa Constance Hamilton told journalists on Monday.

Ms Hamilton was speaking on the eve of the annual African Growth and Opportunity Act (Agoa) Forum in Washington.

The Trump administration has until the end of the month to decide on whether to withdraw benefits for Kigali exporting apparel to the US under Agoa.

The White House had in April threatened to punish Rwanda for violating an Agoa eligibility provision by installing what the Washington said was a barrier to trade between the two countries.

Kigali maintains its position despite the US threats of retaliation.

In 2016, Rwanda increased the tariffs on imported used clothes from $0.20 to $2.50 per kilo with an intention of eventually phasing out the importation.

The government argues that the move will boost its local manufacturing sector.

Kenya, Tanzania and Uganda have abandoned the joint position, choosing instead, to save the economic benefits that accrue under Agoa.

Agoa is a trade deal that allows beneficiary countries in sub-Saharan Africa to export their products to the US duty-free. It was enacted in the US in 2000 to run to 2015 and renewed to 2025.

Ms Hamilton acknowledged that the trade spat has not chilled bilateral relations in general and has also not discouraged foreign investment in Rwanda.

The US is keen to highlight Agoa's gains as trade ministers from several African countries gather in Washington for for a July 11-12 forum.