4 December 2017

East Africa: Trade Lobby Urges East African Countries to Extend Phase Out Time for Ban On Used Clothes

Global trade lobby CUTS International is calling on East African Community member states to extend the phasing out of importation of second-hand clothes to alleviate the impact on buyers, vendors and source countries.

The region resolved early last year to phase out the importation of used clothes and shoes over a period of three years to promote the growth of local industry, but the trade lobby says this should be done over at least eight years.

"This phased approach would make implementation of the ban easier, by putting in place relevant standards that support only the importation of Grade A clothing.

'The standards would, in turn, be enforced by the bureaus of standards and the Customs officials of the different partner states," the lobby says in its report titled Impact of Secondhand Clothes and Shoes in East Africa.

It recommends that the EAC establish a code of practice and acceptance criteria for different grades of the second-hand clothes.

Second-hand grades

Currently, second-hand clothes imported into the EAC come in three grades. Grade A comprises new and good-as-new clothes with minor bruises/stains; Grade B is those with bad odour, stains and some bruises, while Grade C consists of clothes with serious bruises, holes, tears and stains.

"The EAC could decide to first ban grades C and B, while imposing higher tariffs on Grade A with the intention of a total ban for all grades over a period of eight years," says the report.

The study reviewed the state of used clothing and shoes imports in the region, analysed the implications of the EAC Heads of States ban on such imports and examined practical approaches to implementing the ban.

The importation ban was agreed on in March 2016 during the Heads of State 17th Ordinary Summit held in Arusha.

The decision was made to boost the cotton, textile, apparel and leather industries in the region.

The phase out, which has already begun, will be undertaken gradually to 2019. Uganda, Rwanda and Tanzania are already implementing the directive.

The move is also part of the EAC Vision 2050 and the EAC Industrialisation Policy to grow the manufacturing sector, which currently contributes 8.7 per cent to regional GDP and expected to grow to 25 per cent by 2032.

Some stakeholders have suggested an immediate total ban, with exceptions for charity organisations via licensed importers such as churches and foundations that offer social services, with clear quota allocations.

They argue that with no commercial drive for second-hand clothes, import volumes will drop significantly and only those who import for humanitarian reasons will find the need to do so.

They add that since the overarching objective for the EAC is industrialisation, the region should not concern itself with processes such as the grading of second-hand clothes.

Compromise on the ban

The CUTS International study study however finds that making an exception for only charitable purposes will compromise the ban substantially, with many importers hiding behind charity organisations.

Moreover, the origin of second-hand clothes was for charity purposes, but over time, evolved into the lucrative commercial trade.

"The ban should put the same tax measures on new imported clothing so that the price of the new imported clothing is as high as that of second-hand clothes.

That way, the burden of the ban will not only be felt by the poor, but by all clothing consumers, who will, in turn, buy the locally made products," says the study.

"Further, competition against the industrial sector comes not only from second-hand clothes but also from imported new clothes from foreign companies. So the implementation of the ban to boost industrial production should also address the increasing establishment of foreign importing clothing businesses in the EAC.

"Otherwise, the second-hand clothes ban will end up promoting the growth of the foreign multinational companies that have the capacity to produce on a large scale, and not necessarily support local production."

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