Trade experts fault US over AGOA review
The American government has been faulted by trade and economic experts for the out-of-cycle review of the African Growth and Opportunity Act (AGOA) which could see Rwanda and East African countries barred from duty-free access to the US market.
The review, which began on July 13, is a response to a move by Rwanda and fellow East African Community countries to phase out and eventually ban importation of second hand clothes.
This is aimed to develop local and regional textile industries as well as promote the dignity of the East African citizens.
The United Nations Conference on Trade and Development Secretary-General Dr Mukhisa Kituyi told The New Times that as one of those who was involved in negotiating the act, there was no clause that EAC would have to import second hand clothes.
He added that the decision by the American government was politically and morally wrong and the region should not be bullied.
“As UNCTAD, we can express an opinion about the principles on such an element, when I was the minister of trade and industry of Kenya, I helped negotiate AGOA, it was about how we can build the capacities of local traders to be able to export many products in the American Market,” he explained.
He said that the move by the American government to review the decision following the region’s move to develop their industries can be interpreted as de-campaigning progress.
“When America says that because a few exporters of second hand clothes want to continue having access to the African market, they will refuse to give access to their markets, what they are saying is that people of East Africa should make new clothes, export them to America and after they are done with them, they can export them back. Politically and morally it is wrong, the leadership of Rwanda and East Africa is right and should not lose sight of the bigger picture they have in mind,” he said.
Former African Development Bank President Dr Donald Kaberuka said that EAC should remain firm on doing the right thing which is to develop their textile industries and their value chains despite the threats.
Trade experts have downplayed the impact of the review saying that the volume of exports has been considerably low given that EAC is not a resource rich region.
Dr Abdalla Hamdok, the acting executive secretary of the United Nations Economic Commission for Africa, said that AGOA has little impact on countries like Rwanda which do not export oil and minerals.
“If you look closer at finer details, yes it provides for free access to the American market but 80 per cent of what was going into their market was oil and minerals. It did not have much impact for countries that did not have such products,” he said.
Exports from Rwanda, Tanzania and Uganda through the act totaled $43 million in 2016, whereas US exports into Rwanda, Tanzania and Uganda totaled $281 million in 2016.