Rwanda’s President Paul Kagame has insisted that Rwanda will proceed with its plan to phase-out importation of second-hand clothes despite threats from the US that the move could lead to a review of his country’s eligibility to duty-free access to the American market.
President Kagame made the remarks Saturday while addressing a news conference moments after submitting his nomination papers to the Rwanda's electoral commission.
Rwanda, Uganda and Tanzania’s eligibility to trade with the US is under review, following the region’s move to phase out the importation of used clothes.
The review could see Rwanda and her neighbours lose duty-free access to the American market under the African Growth and Opportunity Act (Agoa).
Mr Kagame, however, said the situation leads Rwanda to make a choice between continued importation of used clothes and developing the local textile industry.
The move follows a petition by the US trade association to expel Tanzania, Rwanda and Uganda from Agoa over the EAC’s decision to restrict importation of second-hand clothes and ban the trade altogether by 2019.
Its implication is that US President Donald Trump, who accepted the petition on Tuesday, could open a new trade war among the member states should he endorse it (petition).
“Rwanda and other countries in the region that are part of Agoa, have to do other things, we have to grow and establish our industries,” Mr Kagame said.
“We are put in a situation where we have to choose; you choose to be a recipient of used clothes with a threat hanging or choose to grow our textile industries, which Rwandans deserve at the expense of being part of Agoa.
In Tanzania, members of the business community have voiced different concerns over the possibility of Tanzania losing eligibility to Agoa.
Tanzania Private Sector Foundation’s (TPSF) executive director Godfrey Simbeye said the decision had little effect on the country’s economy since there are few industries that are taking advantage of the market.
According to him, Tanzania, Rwanda and Uganda in 2016 only exported approximately $43 million worth of textiles free of charge to the US market, up from $33 million a year before.
Blessing in disguise
Mr Simbeye added that removal of Tanzania from Agoa could be a blessing in disguise as the country has embarked in its own industrialisation drive.
However, Exim Bank Investment banking manager George Assenga said the decision by the US might cost the country in two areas, which include insecure market for the country’s end products and dwindling export earnings.
Efforts by The Citizen to reach the minister for Industry, Trade and Investment, Mr Charles Mwijage, were unsuccessful.
The deputy minister for Foreign Affairs and East African Cooperation, Dr Susan Kolimba said the future of the community is bright.
“Differing is common in any group. The good thing about our community is that we have a room for discuss issues, which we have differed from, until we reach a consensus,” Dr Kolimba told The Citizen.
“I have not yet received the information that Kenya is against our agreement to ban mitumba,” she added.
Kenya, whose exports to the US amounted to $394 million in 2016, has scuttled the joint position of the EAC, halting any plans to ban second-hand clothes, according to official reports.
This comes hard on the heels of the failure of the member states to agree on a joint plan to tackle the Economic Partnership Agreement (EPA) with the European Union.
Kenya has agreed to sign the agreement but the other member countries have differed and asked for more time to rethink the matter.