U.S. Suspends Duty-Free Benefits for Rwandan Textile Imports

(Bloomberg) -- The U.S. said it plans to suspend duty-free access to Rwandan textile imports because of the African nation's refusal to lower trade barriers for American-made clothing and shoes.

The suspension applies to all AGOA-eligible apparel products from Rwanda in 60 days, the U.S. Trade Representative's office said in a statement on Thursday.

The USTR last year began an “out-of-cycle" review to determine the eligibility of Rwanda, Tanzania and Uganda to keep their trade benefits under the African Growth and Opportunity Act. AGOA, which was signed into law by President Bill Clinton in 2000, rewards African nations that undertake economic and governance reforms with duty-free U.S. market access.

The USTR's review was in response to a complaint by the U.S. textile industry over a decision by the three East African nations to ban imports of used clothing and shoes they say are decimating local textile and apparel industries.

The U.S.-based Secondary Materials and Recycled Textiles Association said the ban would impose “significant economic hardship in the U.S. used-clothing industry,” USTR said.

The U.S. exported $330,000 worth of textiles and apparel to Rwanda in 2016 and imported about $460,000. Coffee and tea shipments were Rwanda's top U.S. export worth $18 million.

Business Achiever

Rwanda has been improving its overall business environment, winning praise for rebuilding since a genocide in 1994 that killed as many as 800,000 people. The country ranked second in Africa, behind Mauritius, in the World Bank's 2018 Doing Business report, which said it has carried out the most business-friendly reforms in the region in the past 15 years.

The U.S. won't suspend AGOA benefits for Tanzania and Uganda because “each has taken steps toward eliminating prohibitive tariff rates on imports of used clothing and footwear and committed not to phase in a ban of these products,” the statement said.

President Donald Trump's “determinations underscore his commitment to enforcing our trade laws and ensuring fairness in our trade relationships,” Deputy U.S. Trade Representative C.J. Mahoney, said in the statement. Trump has repeatedly expressed his push for “reciprocal” relationships with trading partners.

To contact the reporter on this story: Sarah McGregor in Washington at smcgregor5@bloomberg.net.

To contact the editors responsible for this story: Brendan Murray at brmurray@bloomberg.net, Sarah McGregor

©2018 Bloomberg L.P.