The US government is expected to start public hearings on the benefits of the mulit-million dollar duty-free window deal with Africa today, an event being followed keenly in Kampala.
An official from the ministry of trade says the country is following the developments in Washington DC where Donald Trump’s administration starts reviewing the African Growth Opportunity Act (AGOA) that earns Uganda some foreign exchange.
Following the election of Trump as US President last year, he announced a review of all the international trade deals that his country signed, with a view to delist those which he thinks do not benefit the USA, and some of these include the Trans-Pacific Partnership Agreement (TPP) and North American Free Trade Agreement (NAFTA).
Against such a background, the anxiety in Kampala can be understood in the context of a 2017 petition by the Secondary Materials and Recycled Textiles Association (SMART), an American trade body that asked US trade authorities to delist Uganda, Rwanda and Tanzania from a list of countries exporting duty-free textile and apparel to the US.
As a result, The Office of the United States Trade Representative (USTR) in mid-June 2017 initiated a review of the eligibility of Uganda, Rwanda and Tanzania to receive benefits under AGOA.
By press time it was not possible to get comment from the Minister of Trade and Cooperatives Amelia Kyambadde, but another official said the ministry was following the develoments in the US with keen interest.
“We are aware of what is happening in the US as far as AGOA is concerned,” said the official who preferred to remain anonymous because he is not allowed to speak to the press.
Uganda and the two other three East African countries are accused rejecting or cutting second-hand imports from the USA as stated in their 2016/17 national budgets, stating that the objective of the move is to boost local industries which provide employment to citizens.
However, the SMART members argue that the decision by the East African Community (EAC) to ban imports of used clothing and footwear is imposing significant economic hardship on the USA’s used clothing industry. The petitioners claim that the ban directly contradicts requirements that AGOA beneficiaries work towards eliminating ‘barriers to United States trade and investment’ and promote ‘economic policies to reduce poverty’.
Amid reports that Uganda is yet to fully exploit its share of the US market under the AGOA, the East African country has in particular formulated the Buy Uganda Build Uganda (BUBU) Policy which advocates for local production of quality products that can be consumed by Ugandans instead of buying foreign products.
Under AGOA, US imports from Uganda, Rwanda, Tanzania, totalled US$43 million in 2016, up from US$33 million in 2015 while her exports to the three countries rose from US$ 257 million in 2015 to US$281 million in 2016, according to a statement by the Office of the US Trade Representative.
The African Growth and Opportunity Act (AGOA) was signed into law in 2000 and promotes trade and investment in Sub-Saharan Africa, through, among other things, substantial trade preferences.
In order to qualify for AGOA trade benefits, partner countries must meet certain statutory eligibility requirements, including making continual progress toward establishing market-based economies, the rule of law, political pluralism and elimination of barriers to US trade and investment.