Rwanda will no longer be able to export locally made products to the United States following President Donald Trump’s announcement on Thursday that he is going to scrap Rwanda from duty-free treatment under the Africa Growth Opportunity Act.
Trump said in a letter to the US Congress that Rwanda’s duty-free status for apparel will end in 60 days if no corrective actions are taken.
The action followed a petition by the US used clothing industry last year alleging that planned bans by Rwanda, Tanzania and Uganda on used clothing and footwear harmed the industry.
But the US is continuing Agoa benefits for Tanzania and Uganda because both have taken steps toward eliminating used clothing tariffs and committed not to phase in a ban of these products, the US Trade Representative’s office said in a separate statement.
“I commend Tanzania and Uganda for taking corrective steps to address the United States’ concerns,” Deputy US Trade Representative C.J. Mahoney said in a statement.
“We have and will continue to work with Rwanda to resolve this situation.”
The African Growth and Opportunity Act (AGOA) is a nonreciprocal trade preference program that provides duty-free treatment to U.S. imports of certain products from eligible sub-Saharan African countries.
According to the ‘1974 Act’ in the US constitution; section 104 of the AGOA authorizes the US President to designate a country listed in section 107 of the AGOA as an “eligible sub-Saharan African country” if the President determines that the country meets certain eligibility requirements.
In July 2017, President Paul Kagame insisted that Rwanda would proceed with the plan to phase-out importation of second-hand clothes despite threats from the US that the move could lead to a review of Rwanda’s eligibility for duty-free access to the American market.
Previously also, Kagame said the situation leads Rwanda to make a choice between continued importation of used clothes and developing the local textile industry.
“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,” President 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. This is the choice we find that we have to make. As far as I am concerned, making the choice is simple, we might suffer consequences. Even when confronted with difficult choices, there is always a way,” he added.
Meanwhile, the government of Rwanda is promoting domestic production and consumption through the ‘made-in-Rwanda’ campaign. More than 400 tailors under the Kigali Garment Centre (KGC) are raising RWF 3 billion ($3.73 million) for a clothing factory.
Also in 2016, a new RWF 10 billion ($12.44 million) garment and footwear factory was set up in Kigali after Albert Supply Ltd and Prime Economic Zone Ltd entered into a renewable 5-year land lease agreement with ministry of trade and industry.