The Rwandan government has opened talks with the United States on the review of the American Growth and Opportunities Act (AGOA) in a bid to ensure that Rwanda continues to access duty free access to the market.
In July this year, the US began an out-of-cycle review on the eligibility of Rwanda and fellow East African Community countries, following a move by the region to phase out and eventually ban importation of second hand clothes.
This is to develop local and regional textile industries as well as promote the dignity of the East African citizens.
As part of the move, Rwanda last year increased taxes on used clothes from $0.2 to $2.5 per kilogramme, while taxes on used shoes increased from $0.2 to $3 per kilogramme.
The Rwanda Development Board Chief Operating Officer, Emmanuel Hategeka, said that they are in talks with the US to see to it that Rwanda is not locked out of the trade window.
“We are talking to our partners in the US. We value our trade and relations with the US and we are doing all that is possible not to be out of cycle and of course we have been engaging on the issue,” he said.
Hategeka was speaking during an event hosted by the World Bank to release the Rwanda Economic update in Kigali, yesterday.
Without mentioning the specifics of the negotiations, he disclosed that the talks were at an advanced stage.
Exports from Rwanda, Tanzania and Uganda through AGOA totaled $43 million in 2016, whereas US exports into Rwanda, Tanzania and Uganda totaled $281 million in 2016.
Among the reasons for negotiations is to have multiple open markets and choices for local products.
“We are in dialogue and we value the trade relations. We think there is a lot to gain if we keep AGOA, not just in volume terms. Probably the volume of exports has not been a lot but the idea is to have an open market,” Hategeka added.
The greatest beneficiaries of the act have been exporters of made-in-Rwanda products whose volumes to the market are still low.
By developing the local textile industries, Rwanda can continue to narrow its trade deficit which went down by 25 per cent in the first half of this year to stand at $671.2million compared to $902.3million in the same period last year.
The move by the American government to review the eligibility of EAC countries has been faulted by multiple international organisations, including the United Nations Conference on Trade and Development (UNICTAD).
The UNICTAD Secretary-General Mukhisa Kituyi recently told The New Times that as someone who was involved in negotiating the act, there was no clause that EAC would have to import second hand clothes.
He said that the move by the American government to review the decision following the region’s move to develop their industries can be interpreted as de-campaigning progress.
Others who have backed the region’s stance include Former African Development Bank Chief Donald Kaberuka, Abdalla Hamdok the acting executive secretary of the United Nations Economic Commission and former Nigerian president OleseguM Ombasajo.
They argue that Rwanda and the US can enjoy positive trade ties without holding back the development of each other’s industries and development.