Rwanda is open to talks with the US government to find a mutually agreeable solution over used clothes and shoes.
This follows a statement from the American government communicating their intention to suspend the application of duty-free treatment to all African Growth and Opportunity Act (AGOA)-eligible goods in the apparel sector for Rwanda in 60 days.
In July, last year, the US began an out-of-cycle review on the eligibility of Rwanda following Kigali’s move to phase out importation of second-hand clothes, known in the region as Cagua.
Following the decision by the US, which was announced Thursday, the Government of Rwanda has said that they are still open to talks to find a mutually agreeable solution.
The Minister for Trade and Industry, Vincent Munyeshyaka, noted that Rwanda has exercised a lot of flexibility in the negotiation process to ensure that the process was favourable to both parties.
“Rwanda has already exercised flexibility by providing written proposals to accommodate both sides. We look forward to a response to the proposals as well as a productive dialogue with the United States on these important trade and development matters. Rwanda remains committed to finding a mutually agreeable resolution to the outstanding issues,” he said.
Munyeshaka said that developing the local textile industry remains a priority for the country, hence the planned phase-out of second hand clothes import.
“Developing manufacturing capacity in apparel and other industries is a high priority for Rwanda’s economic development. The announced intention to suspend AGOA eligibility for apparel exports from Rwanda is unfortunate, but the maintenance of eligibility for other sectors is welcome,” he said.
The move to phase out second-hand clothes imports is a regional initiative.
In 2015, the East African Community (EAC) Heads of State adopted a three-year gradual process to phase out the importation of second-hand clothes and footwear to promote textile, apparel and leather industries in the region.
Rwanda’s strategy to develop the textiles, apparel and leather industrial sectors aims to increase the quality and quantity of textile, apparel and leather for both local and foreign markets.
Rwanda’s estimated that, if everything is implemented, this could create 25,655 jobs, increase exports to $43 million and decrease imports to $33 million by 2019 (from $124 million in 2015).
The impact on trade balance will result in savings of $76 million over the 3-year period.