Reprieve as US spares Kenya Agoa ejection

Reprieve as US spares Kenya Agoa ejection
Source: BusinessDailyAfrica
Date: 22-06-2017 Time: 10:06:50:am

Kenya no longer faces loss of duty-free access to the United States under Agoa trade benefits in relation to East Africa ban of used clothing or mitumba, US officials have announced.

Washington’s top trade agency affirmed, however, that three other East African Community (EAC) member states — Rwanda, Tanzania and Uganda — must undergo an assessment of their Agoa eligibility status that could result in their ejection from the preferential trade programme.

A review of Kenya’s inclusion in the African Growth and Opportunity Act (Agoa) “is not warranted at this time,” the Office of the US Trade Representative said in a notice published in a federal government gazette.

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It cited “recent actions Kenya has taken, including reversing tariff increases, effective July 1, 2017, and committing not to ban imports of used clothing through policy measures that are more trade-restrictive than necessary to protect human health.

The agency added that it “will continue to monitor Kenya’s actions to ensure that Kenya follows through on its commitments.”

The decision to spare Kenya from a process that would have jeopardised the country’s 66,000 Agoa-related jobs “is, no doubt, a victory for Kenya’s trade diplomacy,” said Abdirizak Musa, an official in Nairobi’s embassy in Washington.

Rwanda, Tanzania and Uganda still risk loss of their Agoa benefits due to their ongoing commitment to a March 2016 EAC decision to phase in a ban on imports of used clothing and footwear from the US.

The EAC countries, including Kenya, were named in a petition filed three months ago by a US-based recycled textiles association alleging that the move to bar imports of used clothing violates Agoa eligibility criteria.

Thousands of jobs in East Africa and the US would be lost if the clothing ban is implemented, the association argued.

Among the standards African countries must meet for participation in Agoa is a demonstration of progress toward eliminating barriers to US trade.

US trade officials will now assess the recycled materials association’s claims against Rwanda, Tanzania and Uganda. A public hearing on the issue is scheduled to take place in Washington on July 13.

Combined imports from Rwanda, Tanzania, and Uganda under Agoa’s duty-free provisions amounted to Sh4.5 billion ($43 million) last year — up from Sh3.4 billion ($33 million) in 2015.

Agoa is a far more valuable instrument for Kenya, which exported Sh40 billion ($394 million) worth of textiles and apparel to the US in 2016.

The Kenyan embassy in Washington pointed to the Agoa issue as a key reason for retaining Washington lobbying firm with ties to the Trump administration-- Sonoran Policy Group-.

The Trump administration intends to rigorously enforce Agoa eligibility requirements, US Commerce Secretary Wilbur Ross said last week at a US-Africa Business Summit.

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