Protect the country’s second-hand clothing exports and threaten to cancel the tariff-free benefits of East African countries
In the suburbs of Kigali, Rwanda, local employees work in a clothing factory, where the clothing produced is mainly sold to the American market.
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U.S. trade protectionism is having a negative impact on the global economy, and Rwanda in central Africa is also suffering badly. Not long ago, U.S. President Trump said that he would suspend Rwanda’s eligibility for the African Growth and Opportunity Act, which means that the latter will not be able to enjoy tax-free treatment for exporting goods to the United States. This is because Rwanda significantly increased its import of second-hand clothes in 2017. tariffs, which have had an impact on U.S. second-hand clothing exports. If the United States cancels its tariff preferences, it will have a huge impact on the developing garment manufacturing industry in East Africa.
The fledgling garment manufacturing industry in Rwanda may be strangled
In East Africa, second-hand clothes flood the market. Kenyans call it “Mitumba”, Rwandans call it “Chagua” and Zambians call it “Salora”. These terms all refer to the same thing, which is second-hand clothes that Westerners have eliminated. These discarded clothes are not only harmful to health, but also destroy the garment manufacturing industry in East Africa.
In order to change this situation, East African Community Kenya, Tanzania, Uganda, Rwanda and other countries have begun to increase tariffs on imported second-hand clothing since March 2017. In Rwanda, the tariff on second-hand clothes increased from US$0.2 to US$2.50 per kilogram.
This decision prompted a counterattack from the United States. The United States threatens to remove these four countries from the African Growth and Opportunity Act. Kenya, Tanzania, and Uganda were forced to cancel their decisions to impose additional duties on second-hand clothes. But Rwanda did not compromise. For this reason, U.S. President Trump stated that Rwanda will be revoked within 60 days to enjoy tax-free exports to the United States.
U.S. trade protectionism may stifle Rwanda’s budding garment manufacturing industry.
Recently, I visited the C&H garment factory on the outskirts of Kigali, the capital of Rwanda, which employs 1,500 Rwandan workers. In the workshop, workers are busy producing. Pieces of clothing are finally packed into boxes, waiting to be exported to European and American markets. The Rwandan government has awarded many awards to this factory, motivating it to become a lever for “Made in Rwanda”. Rwanda regards this garment factory run by Chinese investors as a “star enterprise” and plans to introduce 50 more similar enterprises this year. The Rwandan government also plans to build eight industrial parks.
Ma Xiaomei, general manager of the garment factory, said that 80% of the factory’s orders come from the United States. If the United States cancels Rwanda’s qualification for tariff preferences, it will have a great impact on this African country in the development stage. “We have spent two or three years just building up the ‘Made in Rwanda’ brand. If the United States does this, our early work will be in vain,” Ma Xiaomei said.
“African people do not need to wear T-shirts or jeans that others have worn”
The American Second-Hand Clothing Association claims that the establishment of “trade barriers” by East African countries on second-hand clothing will lead to the unemployment of 40,000 people in the United States. East African countries have been “taking advantage of the United States” in the import of second-hand clothing.
In fact, second-hand Western clothing is destroying East Africa’s textile industry. The United Nations estimates that 80% of Africans wear second-hand clothes. For Western companies, this is almost a costless business. They classify and pack the collected and donated second-hand clothes and ship them to Africa, selling them to African consumers at low prices, easily destroying the foundation of local manufacturing. United Nations data shows that the East African Community imported $151 million in second-hand clothing and shoes last year.
As South Africa’s “Post-Guardian” said, “Second-hand clothing is out of fashion.” The East African Community plans to gradually stop importing second-hand clothes and shoes from Western countries by 2019 and revitalize its own manufacturing industry. “Our goal is to see more companies producing clothing in Rwanda to protect the health of our people. Our people do not have to wear T-shirts or jeans that others have worn,” said Mugweza, an official at the Rwanda Ministry of Trade and Industry. ”
Faced with the trade threat from the United States, Rwandan President Kagame remains firm. He said that the ban on second-hand clothing must continue to be implemented even if it affects economic growth. “We must develop our own industry. This is what we must do.” A choice to make. Maybe there will be some consequences, but there is always a solution.”
Vincent Munyesaka, Rwanda’s Minister of Trade and Industry, said: “We need to develop our industrial sector. No country can develop without industry.” He charged, “African Growth and Opportunities Act”To develop our industry”, since Rwanda joined the agreement, only a very small amount of handicraft products have been exported to the United States each year.
According to Ibrahim Sania, an expert at the African Export-Import Bank, the trade volume between the United States and Africa is declining sharply. The trade deficit between the United States and the 38 African countries under the framework of the agreement has dropped from the peak of 64 billion U.S. dollars in 2008 to now. of US$7.9 billion.
The U.S. trade threat is an example of “bullying”
When the United States issues trade threats to East African countries, Africa becomes even more confused about the prospects of U.S.-Africa relations. Mukhisa Kituyi, Secretary-General of the United Nations Conference on Trade and Development and former Kenyan Trade Minister, said that the US threat is politically and morally wrong and that the trade relationship between the United States and East Africa should be based on mutual respect.
According to the New York Times, local officials in East Africa believe that Africa wants to change the status quo of exporting raw materials rather than finished products, but the U.S. trade threat is an example of Western countries’ “bullying” to prevent Africa from seeking changes.
Daniel Owoko, Director of the Office of the United Nations Conference on Trade and Development, believes that the East African Community and the United States have a long-term trading partnership. Compared with this, second-hand clothing is only a “very trivial issue” that jeopardizes the relationship between the East African Community and the United States. The relationship between them is wrong. “Consumers in the East African Community should not be penalized for their changing tastes and growing middle class,” Owoko said.
Garth Frazier, assistant professor at the University of Toronto in Canada, said that the African Growth and Opportunity Act is an important measure by the United States to promote international development and provides trade preferences to African countries. In the past, the United States usually used human rights and political reasons to disqualify some African countries from preferential tariffs. However, after Trump came to power, this concept and approach have changed. The United States threatened to cancel Rwanda’s qualifications just because Rwanda wanted to restrict the import of second-hand clothes.
“African Business” magazine commented that “return on investment” is Trump’s simple guiding principle when deciding foreign policy. If you want the United States to do something for Africa, Africa needs to export benefits to the United States. (Title: Protect the country’s second-hand clothing exports and threaten to cancel tariff-free preferential treatment for East African countries)
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