The Office of the United States Trade Representative on 20 June announced the initiation of an out-of-cycle review of the eligibility of Rwanda, Tanzania, and Uganda to receive benefits under the African Growth and Opportunity Act (AGOA). 

The launch of the review is in response to a petition filed by the Secondary Materials and Recycled Textiles Association (SMART), which asserts that a March 2016 decision by the East African Community, which includes Rwanda, Tanzania, and Uganda, to phase in a ban on imports of used clothing and footwear is imposing significant economic hardship on the U.S. used clothing industry.

Through the out-of-cycle review, USTR and trade-related agencies will assess the allegations contained within the SMART petition and review whether Rwanda, Tanzania, and Uganda are adhering to AGOA’s eligibility requirements. 

A public hearing will take place July 13, 2017 in Washington, DC. A Federal Register notice containing information related to this review is available to download.

Signed into law in 2000, the African Growth and Opportunity Act promotes trade and investment in sub-Saharan Africa, including through substantial trade preferences. In order to qualify for AGOA trade benefits, partner countries must meet certain statutory eligibility requirements, including making continual progress toward establishing market-based economies, the rule of law, political pluralism, and elimination of barriers to U.S. trade and investment, among others.

U.S. AGOA imports from Rwanda, Tanzania, and Uganda totaled $43 million in 2016, up from $33 million in 2015. U.S. exports to Rwanda, Tanzania, and Uganda totaled $281 million in 2016, up from $257 million in 2015.

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Federal Register notice

Request for Comments and Notice of Public Hearing Concerning an Out-of-Cycle Review of Rwanda, Tanzania, and Uganda Eligibility for Benefits Under the African Growth and Opportunity Act

The Office of the United States Trade Representative (USTR), in consultation with the Trade Policy Staff Committee (TPSC), is announcing the initiation of an out-of-cycle review of the eligibility of the Republic of Rwanda, United Republic of Tanzania, and Republic of Uganda to receive benefits under the African Growth and Opportunity Act (AGOA) in response to a petition. The AGOA Subcommittee of the TPSC (Subcommittee) will consider written comments, written testimony, and oral testimony in response to this notice to develop recommendations for the President as to whether the Republic of Rwanda, United Republic of Tanzania, and Republic of Uganda are meeting the AGOA eligibility criteria.

Dates

June 30, 2017: Deadline for filing requests to appear at the July 13, 2017 public hearing, and for filing pre-hearing briefs, statements, or comments on the AGOA eligibility of the Republic of Rwanda, United Republic of Tanzania, and Republic of Uganda.

July 13, 2017: The AGOA Implementation Subcommittee of the TPSC will convene a public hearing on the AGOA eligibility of the Republic of Rwanda, United Republic of Tanzania, and Republic of Uganda.

July 21, 2017: Deadline for filing post0hearing briefs, statements, or comments on this matter

Supplementary information

I. Background

AGOA (Title I of the Trade and Development Act of 2000, Pub. L. 106-200) (19 U.S.C. 2466a, et seq.), as amended, authorizes the President to designate sub-Saharan African countries as beneficiaries eligible for duty-free treatment for certain additional products not included for duty-free treatment under the Generalized System of Preferences (GSP) (Title V of the Trade Act of 1974 (19 U.S.C. 2461, et seq.) (1974 Act), as well as for the preferential treatment for certain textile and apparel articles.

The President may designate a country as a beneficiary sub-Saharan African country eligible for these AGOA benefits if he determines that the country meets the eligibility criteria set forth in section 104 of the AGOA (19 U.S.C. 3703) and section 502 of the 1974 Act (19 U.S.C. 2462).

Section 104 of AGOA includes requirements that the beneficiary country has established or is making continual progress toward establishing: A market-based economy; the rule of law, political pluralism, and the right to due process; the elimination of barriers to U.S. trade and investment; economic policies to reduce poverty; a system to combat corruption and bribery; and the protection of internationally recognized worker rights. In addition, the country may not engage in activities that undermine U.S. national security or foreign policy interests or engage in gross violations of internationally recognized human rights. Please see section 104 of the AGOA and section 502 of the 1974 Act for a complete list of the AGOA eligibility criteria.

Section 506 of the Trade Preferences Extension Act of 2015 (TPEA) requires the President to establish a petition process to allow any interested person, at any time, to file a petition with USTR concerning compliance of any sub-Saharan African country listed in section 107 of the AGOA (19 U.S.C. 3706), with the eligibility requirements set forth in section 104 of the AGOA and section 502 of the 1974 Act. On February 26, 2016, the President delegated this authority to the United States Trade Representative. USTR has established a petition process. See 15 CFR part 2017.

II. The Petition

On March 21, 2017, the Secondary Materials and Recycled Textiles Association (SMART) submitted a petition to USTR requesting an out-of-cycle review to determine whether the Republic of Kenya, Republic of Rwanda, United Republic of Tanzania, and Republic of Uganda are meeting the AGOA eligibility criteria. The SMART petition asserts that a March 2016 decision by the East African Community (EAC), which includes the Republic of Kenya, Republic of Rwanda, United Republic of Tanzania, and Republic of Uganda, to phase in a ban on imports of used clothing and footwear is imposing significant economic hardship on the U.S. used clothing industry, and is in violation of the AGOA statutory eligibility criteria to make continual progress toward establishing a market based economy and eliminating barriers to U.S. trade and investment.

In response to the SMART petition, USTR has determined, in consultation with the TPSC, that there are exceptional circumstances warranting an out-of-cycle review of the AGOA eligibility of the Republic of Rwanda, United Republic of Tanzania, and Republic of Uganda. With respect to the Republic of Kenya, USTR has determined that an out-of-cycle review of Kenya’s AGOA eligibility is not warranted at this time, due to recent actions Kenya has taken, including reversing tariff increases, effective July 1, 2017, and committing not to ban imports of used clothing through policy measures that are more trade-restrictive than necessary to protect human health. USTR will continue to monitor Kenya’s actions to ensure that Kenya follows through on its commitments. The USTR has consulted with Congress about these determinations.

Section 506A of the 1974 Act requires the President to terminate the designation of a country as a beneficiary sub-Saharan African country if he determines that the beneficiary country is not making continual progress in meeting the eligibility requirements. As amended by the TPEA, the President may withdraw, suspend, or limit the application of duty-free treatment with respect to articles from the country if he determines that it would be more effective in promoting compliance with AGOA-eligibility requirements than terminating the designation of the country as a beneficiary sub-Saharan African country.

The Subcommittee is seeking public comments in connection with this outof-cycle review of the AGOA eligibility of the Republic of Rwanda, United Republic of Tanzania, and Republic of Uganda. The Subcommittee will consider the written comments, written testimony, and oral testimony in developing recommendations for the President as to whether the Republic of Rwanda, United Republic of Tanzania, and Republic of Uganda are meeting the AGOA eligibility criteria.

III. Notice of Public Hearing

In addition to written comments from the public on the matters listed above, the Subcommittee will convene a public hearing at 10:00 a.m. on Friday, July 13, 2017, to receive testimony related to the AGOA eligibility of the Republic of Rwanda, United Republic of Tanzania, and Republic of Uganda. The hearing will be held at 1724 F Street NW., Washington, DC 20508 and will be open to the public and to the press. We will make a transcript of the hearing available on www.regulations.gov within approximately two weeks of the date of the hearing.