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Kenya’s AGOA eligibility no longer under US review

Africa / 27-06-17 / by
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The office of the US trade representative (USTR) has ruled that a review of Kenya’s eligibility to receive benefits under the African Growth and Opportunity Act (AGOA) is not warranted at this time. However, the eligibility of Rwanda, Tanzania and Uganda is still being assessed.

The move comes as a response to a petition filed by the US-based Secondary Materials and Recycled Textiles Association (Smart).

In the petition, Smart declares that a March 2016 decision by the East African Community (EAC) to phase in a ban on imports of used clothing and footwear violates the terms of the act. The EAC had told all member states to buy their clothing from within the region to boost local manufacturing and help grow its economy.

Smart believes the EAC’s actions will result in significant economic hardship for the US’ used clothing industry.

In response to the petition, the Kenyan government had hired Washington lobbying firm Sonoran Policy Group to help prevent the country’s expulsion from AGOA. Last week the USTR, in consultation with the Trade Policy Staff Committee (TPSC), published a notice announcing that Kenya is off the hook. However, in the same notice, it noted that it has initiated a review of the eligibility of three other EAC member states (Rwanda, Tanzania and Uganda) to receive benefits under AGOA.

The decision with respect to Kenya is as a result of recent actions that the country 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 notice reads.

USTR says it will continue to monitor Kenya’s actions to ensure that the country follows through on its commitments.

The AGOA subcommittee of the TPSC will now assess Smart’s claims against the other three countries. A public hearing on the issue is scheduled to take place in Washington on July 13.

AGOA is important to Kenya: last year it exported US$394mn-worth of textiles and apparel to the US under AGOA’s duty-free provisions. Combined imports from other three countries amounted to US$43mn.

AGOA is a 17-year-old preferential trade agreement that provides duty-free and quota-free market access to the US for around 6,000 products from 39 qualifying Sub-Saharan African countries. It is Africa’s only multilateral trade agreement with the US.

In 2015, AGOA was renewed by US Congress for an additional 10 years, but, unlike with a free trade agreement, its benefits can be cut and conditions imposed at any time at the behest of US Congress.

Earlier this month, at the US-Africa Business Summit in Washington US commerce secretary Wilbur Ross spoke to delegates about the importance of adhering to AGOA obligations – something which the US will continue to rigorously enforce.

“We must ensure countries currently benefiting from trade preferences granted by our AGOA continue complying with the eligibility requirements established in US law,” said Ross. “The administration takes these congressional requirements very seriously. And in applying our laws, we will vigorously protect the rights of US companies and workers in the global arena.”

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