Atwine Allen, East Africa |
The Rwandan Government's decision to ban importation of American-used clothes through import tarriff increase, could earn the tiny East African country a trade sanction from the United States Government.
- This is coming after the expiration of the 60 days ultimatum issued by the US Government for the Rwandan Government to revert to the old order by removing the tariff on imported used-clothes.
Recall that in March 2018, President Donald Trump's administration issued Rwanda 60 days notice, warning that it would suspend the East African country from selling clothes to US through the duty free policy which most African countries have been benefiting from, being part of the Africa Growth and Opportunity Act (AGOA).
AGOA, is the flagship US trade legislation designed to boost trade and investment in qualifying African countries which granted duty-free access to 6,500 exported products.
CJ Mahoney, US Deputy US Trade Representative, in a recent chat with BBC, disclosed that President Trump’s determinations underscore his commitment to enforcing US' trade laws and ensuring fairness in her trade relationship with other countries.
President Paul Kagame of Rwanda having reviewed the impact of importation of second-hand clothing on the country’s nascent garment and textile industry, decided that wearing hand-me-downs by Rwandans threatened the dignity of her citizens.
The government therefore increased tariffs on imported used clothes from $0.20 to $2.50 per kg in 2016, with a view to phasing out all used-clothes importation in the country.
President Kagame hopes to use the tariff policy to stimulate the country’s garment industry, with a target of creating 25,000 jobs for her citizens.
Meanwhile, findings show that the used-clothing market in Rwanda employs more than 22,000 people in 2016 and was worth $17m, currently being patronised by the poorest 40% of the population in East Africa.
Private companies in America and Europe buy up surplus donations from charities and export them to the developing world.
Following the decision made by the Rwandan government , the Office of the United States' Trade Representative (USTR), received a petition from Secondary Materials and Recycled Textiles Association (SMRTA), alleging that the EAC's 2016 decision to phase out used-clothing- which is now adopted by the Rwandan government- is capable of imposing "significant economic hardship" on America's used-clothing industry, and that could cost 40,000 US jobs and $124m in exports.
Should the US government sanction Rwanda, the East African country would alone bare the consequence of her actions. This could scare off investors seeking to take advantage of AGOA.
President Paul Kagame in 2017 revealed then that he was willing to sacrifice economic growth of the country in support of the tariff increase.
According to him, "that is the choice we find that we have to make. As far as I am concerned, making the choice is simple, although we might suffer consequences."
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