TZ: We can’t afford losing Agoa market

Dar es Salaam. The government has insisted that Tanzania is still committed to the African Growth and Opportunity Act (Agoa) despite threats by the United States to remove three East African countries from the agreement.

The permanent secretary in the Ministry of Industry, Trade and Investments, Dr Adelhem Meru, revealed that the government will dispatch a team of business experts to the US on Thursday for negotiations.

The PS allayed stakeholders’ fears, especially those benefiting from the Agoa arrangement, that the government will do everything in its powers to ensure that the country stayed part of the Agoa market.

Dr Meru made the revelation when speaking to fabric and garments stakeholders when he visited the ongoing 41st Dar es Salaam International Trade Fair (DITF) at the Mwalimu JK Nyerere exhibition grounds yesterday.

“I want to assure Tanzanians and textile manufacturers that we are still committed to the agreement (Agoa).

Our team will leave for the US on July 13 for negotiations,” he said. However, Dr Meru didn’t divulge more details.

The US threatened to expel Tanzania, Uganda and Rwanda from Agoa over the EAC’s decision to restrict importation of second-hand clothes and ban the trade altogether by 2019.

Its implication is that US President Donald Trump, who accepted the petition last month, could open a new trade war among the member states should he endorse it (petition).

The US, for its part, exported to EAC goods worth Sh618 billion in 2016 and Sh565.4 billion in the previous year.

Kenya, whose exports to the US amounted to Sh866.8 billion in 2016, has revitalised the joint position of the EAC, halting any plans to ban secondhand clothes, according to official reports.

This comes hard on the heels of the failure of the member states to agree on a joint plan to tackle the Economic Partnership Agreement (Epa) with the European Union.

Kenya has agreed to sign the agreement (Epa) but the other member states in the regional bloc have differed and asked for more time to rethink the matter.

However, Mazava Fabrics and Production, a factory that benefits by 100 per cent the Agoa, and which employs 2,400 workers, says it won’t be affected much should the US government go ahead with the expulsion of the EAC countries.

Early in the month, the office of the US trade representative said they were reviewing trade benefits with Rwanda, Tanzania and Uganda under Agoa after complaints on US interests being hurt following a ban on second hand imports into the East Africa.

The move was in response to the decision by six East African Community member states – Tanzania, Burundi, Kenya, Rwanda, South Sudan and Uganda – to fully ban imported secondhand clothes and shoes by 2019, on the grounds taht this will help boost growth of the domestic manufacturing sector.

Speaking to The Citizen on Thursday afternoon, Mazava factory assistant manager Nelson Mchukya elaborated that the only people who would suffer would be the workers to be retrenched and the government, which would also lose revenue.

He said that the company would not be affected much because it operates under the Export Processing Zones Authority (EPZA).

“So, the investor won’t be affected much,” he said. The EPZA provides a conducive environment for profitable operations.

US Agoa imports from Rwanda, Tanzania and Uganda totalled $43 million (Sh90 billion) in 2016, up from $33 million in 2015, according to the US trade representative. US exports to Rwanda, Tanzania, and Uganda also reached $281 million in 2016, up from $257 million a year before, it said.

Rwanda’s President Paul Kagame has insisted that Rwanda will proceed with its plan to phase out importation of secondhand clothes despite threats from the US that the move could lead to a review of his country’s eligibility to duty-free access to the American market.