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US Suspends Rwanda’s AGOA Status for Apparel Imports

The U.S. has suspended Rwanda’s duty-free status for apparel imports to the U.S. under the African Growth and Opportunity Act (AGOA) over the country’s proposed ban of used clothing and footwear imports.

“We regret this outcome and hope it is temporary,” Deputy U.S. Trade Representative C.J. Mahoney said. “But if the AGOA eligibility criteria are to have any meaning, they have to be enforced, particularly where, as here, other AGOA members took action in order remain in compliance.”

The issue over Rwanda’s AGOA eligibility came about in 2015 when the East African Community (EAC) worked up a plan to ban used clothing and footwear imports into the region—in part to improve the domestic industry. USTR ramped up its engagement on the issue in 2016 when the EAC said the ban would be phased in by 2019.

In March last year, the Secondary Materials and Recycled Textiles Association (SMART) submitted a petition calling the EAC’s decision to phase in a ban on the used products an imposition of significant economic hardship for the U.S. used clothing industry. The petition also said the move was inconsistent with existing criteria for AGOA beneficiaries, which calls for the countries to establish a market-based economy and eliminate barriers to U.S. trade and investment.

SMART said in its petition that as many as 40,000 U.S. jobs related to the collection, processing and distribution of used clothing and footwear could be negatively affected by the ban. The three EAC AGOA beneficiaries–Kenya, Tanzania and Uganda–worked with the U.S. and took actions to revise their policies in accordance.

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“As a result, they continue to receive full benefits under AGOA,” USTR said. “Unfortunately, Rwanda has insisted on keeping in place a policy that has raised tariffs on imports of used apparel and footwear by more than 1,000 percent, effectively banning imports of these products.

Efforts over the past two years to address this issue with the government of Rwanda have been unsuccessful, USTR noted, and as a result, on March 29, the U.S. found that Rwanda had not made enough progress toward the elimination the trade barriers and was therefore not compliant with AGOA’s eligibility requirements. Rwanda was given 60 days to resolve this problem before the suspension of its apparel benefits under AGOA.

“Rwanda has, however, continued to insist on retaining its tariffs,” USTR said. “The president, therefore, has decided to suspend Rwanda’s duty-free access to the U.S. for apparel products until Rwanda comes back into compliance with AGOA’s eligibility requirements.”

The suspension covers AGOA benefits for a class of imports that totaled $1.5 million in 2017 and accounts for roughly 3 percent of Rwanda’s total exports to the U.S. The country will still be eligible to receive non-apparel benefits under AGOA.

“We look forward to working with Rwanda to resolve this issue so that benefits in the apparel sector may be restored,” USTR added.