Rwanda and several of its neighbors had introduced tariffs on used clothing in an attempt to bolster the local apparel industry.

Rwanda Punished for Rejecting Used Foreign Clothing

By Harris Africa Partners
Published June 8, 2018

The Donald J Trump Administration has suspended duty-free access to US markets for Rwandan clothing. United States of America is punishing Rwanda for rejecting its hand-me-down clothing popularly known as mitumba.

The Donald J Trump Administration has suspended duty-free access to US markets for Rwandan clothing.

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Rwanda and several of its neighbors within the East African Community of six countries–Kenya, Uganda, Tanzania, Burundi and South Sudan–had introduced tariffs on used clothing in an attempt to bolster the local apparel industry. In response, a US trade group filed a complaint, claiming that the new tariffs violate the terms of the African Growth and Opportunity Act, which requires participating countries to reduce trade barriers for US goods. Unlike its neighbors, Rwanda stayed the course.

Rwanda and several of its neighbors had introduced tariffs on used clothing in an attempt to bolster the local apparel industry.More than 100 countries benefit from US trade preference programmes without returning the favour. Florie Liser, former Assistant US Trade Representative for Africa, notes that countries like India and Brazil, which are major exporters to the United States under the programme known as the Generalized System of Preferences, ‘ship a lot more to us than Rwanda, yet have significant barriers to US trade’. The selective decision to retaliate against Rwanda not only adds to the general trade turmoil damaging US standing overseas but also is seen as a particular snub of Africa, where President Trump’s derogatory comments about its countries have not been forgotten.

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The administration can’t claim to be protecting a vital American industry, either. The complaints of the used-clothing association — that Rwandan tariffs would have a negative impact on up to 40 000 US jobs — are unsubstantiated. Rwanda, a country of approximately 12.5 million people, imported US$17 million in used clothing in 2016, according to the US Agency for International Development (USAid). The clothes are primarily donations to organisations like the Salvation Army and Goodwill, bought by members of the trade group that lodged the complaint, the Secondary Materials and Recycled Textiles Association, and resold in Africa. Rwandan vendors sell them in market stalls.

Harmonisation of the EAC industrial policy agenda, SADC Industrialization Strategy and Roadmap of 2015 and the COMESA Industrialization policy is crucial to Africa's Tripartite Free Trade Area (TFTA).Rwanda’s motivations are as much about dignity as they are about economics. Rwanda is taking a stand against the perceived indignity of buying clothes that others have worn and discarded. It would be a different story if Rwandans were rejecting icons of American ingenuity and enterprise, like cutting-edge medical devices or mobile technologies. But they’re not; they’re rejecting hand-me-downs.

Banning used clothes is not enough to build Rwanda’s domestic textile and apparel industry, especially given competition from cheap Chinese imports of ready-made clothing. But there is a certain irony in Trump punishing Rwanda for protecting domestic manufacturing in what really is a Rwandan version of ‘America First’. USA ought to be supporting countries that pursue economic growth and development plans — not just because it is the right thing to do but also because the vitality of the US economy depends on whether it markets for its goods and services.

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Until recently, supporting African economic growth was a key piece of U.S.-Africa policy. For instance, building on the African Growth and Opportunity Act’s strong legacy of bipartisan support, President Barack Obama launched the Trade Africa initiative to support regional economic integration and work toward a more reciprocal trade relationship. But the suspension of access for Rwandan apparel reinforces the sad truth that the Trump administration has no vision for trade with Africa. And there is no question that US businesses will suffer as a result. Africa represents the last frontier for America’s export-driven economy, with consumer and business spending predicted to reach US$6.7 trillion by 2030. A US government report cites motor vehicles, poultry and refined petroleum products among various sectors, as well as a range of services, with the potential for greater American exports to sub-Saharan Africa.

East African Community brings together six countries.The United States misses a larger opportunity by engaging in petty trade squabbles and generally neglecting the continent. While it is true that the Trump administration maintains that it supports more reciprocal trade relationships with African states and has been studying trade and investment potential in certain African markets, advancing a strategic economic partnership with Africa requires more than talk. Actions — like threatening the funding of government agencies that support US companies investing in Africa, leaving key ambassadorships vacant and deprioritising trade programmes — speak louder than words.

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Meanwhile, other economies are making aggressive commercial plays in Africa. China has been Africa’s leading trade partner for the last nine years; trade scuffles like this one with Rwanda can only further drive African states into China’s open arms. Nor is it just China — the European Union has been actively traveling the region, signing two-way trade agreements that will disadvantage American companies far more than any tariffs on secondhand clothing.

It would be misguided to dismiss this row with Rwanda as a small issue with a small country. The larger economic picture is much more worrying.

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