So, on March 29, US President Donald Trump notified the Congress that he would in 60 days suspend Rwanda from “duty-free treatment” to “eligible goods in the apparel sector” under Africa Growth and Opportunity Act (Agoa).
This means that if the decision is effected, textile and footwear products from Rwanda entering the US market won’t enjoy duty-free treatment anymore.
President Trump’s decision was triggered by Rwanda’s decision to increase taxes on used clothes from $0.20 to $2.50 per kilogramme to discourage their importation, and cushion local textile and footwear industries from competition.
Following the tax increase, the US Secondary Materials and Recycled Textiles Association lobbied the Trump administration to convince Rwanda to change course or face the consequences.
Responding to the threat, Rwanda stood its ground and politely announced, on April 3 that while “Agoa is a commendable unilateral gesture,” the “withdrawal of Agoa benefits is at the discretion of the United States.”
Interestingly, the decision to ban second-hand clothes by 2019 was taken by the East African Community (EAC) heads of state in 2016, but other countries in the region backtracked when Uncle Sam threatened to ban them from Agoa!
On the face of it, one could say that other EAC countries yielded to the US pressure because they benefit more from Agoa.
Since last year, Rwanda’s total exports to US under Agoa amounted to $43.70 million compared with Kenya’s $574 million, Tanzania’s $123.70 million and Uganda’s $79.10 million. We could say that being the superpower with tentacles across the world, the EAC countries had no option but to yield.
However, while America’s power over these and other smaller nations isn’t in dispute, the decision by EAC countries except Rwanda to abandon their collective decision on used clothes tells us less about US leverage and more about African leaders’ preparedness to walk the talk and take the hard decisions required to emancipate Africa.
Can anyone say that EAC leaders took the decision to phase out the importation of used clothes without knowing or anticipating how the US would react?
If they did and abandoned the decision at the sound of the first shot/threat, it doesn’t demonstrate serious leadership. If they didn’t know, it’s even worse!
Whichever way one looks at it, all EAC countries would in the long term benefit from a ban on used clothes and footwear.
Consequently, were all these countries to ban used clothes and invest in their textile and footwear industries, there is no doubt they would earn far more than they currently do through Agoa.
And the more these countries delay banning the importation of used clothes, the more it will become even difficult in future. This is because, instead of reducing in volume, importation of these clothes has been increasing since 1980s and will continue to do so because the cost of new clothes in the West and Asia is low and discarding or donating these clothes is increasing.
That said, suffice to note that, in this second-hand versus Agoa access saga, the most interesting issue isn’t the ban itself; that’s legal and within the tenets of the agreement.
What is depressing is that EAC leaders not only failed to remain united on an issue that could easily be understood and that touches on the dignity of their people, but that a country could be banned from accessing the US market only because it doesn’t want its citizens to buy and wear clothes used by US citizens!
Remember, Agoa was started to help less developed economies to grow. It is therefore a form of “aid.” That leaders couldn’t argue this and point out that the development of the local textile industry is advancing the spirit of Agoa doesn’t excite confidence in the EAC leadership; although, of course, no one can say its uncharacteristic!
Objectively, despite being dressed as a catalyst to development, Agoa is a disincentive to growth as it undermines the local textile and footwear industries!
That Rwanda, despite its “small” size defied the odds and stood her ground is seminal. And of course, its decision is morally and economically sound despite short to medium term consequences like loss of employment for about 40,000 individuals working in the second-hand industry.
Christopher Kayumba, PhD. Senior Lecturer, School of Journalism and Communication, UR; Lead consultant, MGC Consult International Ltd. E-mail: [email protected]; twitter account: @Ckayumba Website:www.mgcconsult.com