United States President Joe Biden has disclosed plans to remove Uganda, and three other countries including; Central African Republic, Gabon and Niger from the lucrative U.S. – Africa trade initiative commonly known as African Growth and Opportunity Act (AGOA).
AGOA provides duty-free access to the U.S. market for over 6,000 products, mainly textile products.
The U.S. leader said the “Government of Uganda has engaged in gross violations of internationally recognized human rights” without providing specifics.
“In accordance with section 506A(a)(3)(B) of the Trade Act of 1974, as amended (19 U.S.C. 2466a(a)(3)(B)), I am providing advance notification of my intent to terminate the designation of the Central African Republic, the Gabonese Republic (Gabon), Niger, and the Republic of Uganda (Uganda) as beneficiary sub-Saharan African countries under the African Growth and Opportunity Act (AGOA),” said Biden in a letter to the Speaker of Congress.
“I am taking this step because I have determined that the Central African Republic, Gabon, Niger, and Uganda do not meet the eligibility requirements of section 104 of the AGOA,” Biden emphasised.
Biden’s decision will likely impact Ugandan factories which are mainly engaged in the production of apparel and medium enterprises exporting goods to the U.S. market.
According to official statistics, a year before the COVID-19 pandemic (2018/19), under the AGOA initiative, Uganda’s exports to the U.S. were valued at $1 million (nearly Shs4 billion).
In 2019/2020, the exports grew to $3.4 million (about Shss13 billion) and by the close of 2021, they rose to $ 5.1 million (about Shs20 billion).
However, this publication understands that one of the conditions for the U.S. to maintain AGOA was that Uganda had to continue importing second-hand clothes (Mivumba) and footwear from the U.S.
If AGOA is scrapped, Uganda has the opportunity to ban the import of second-hand clothes and encourage local manufacturing of clothes for domestic, regional, and foreign markets.
Biden said despite intensive engagement between the United States and the Central African Republic, Gabon, Niger, and Uganda, “these countries have failed to address United States concerns about their non-compliance with the AGOA eligibility criteria.”
He added: “Accordingly, I intend to terminate the designation of these countries as beneficiary sub-Saharan African countries under the AGOA, effective January 1, 2024. I will continue to assess whether the Central African Republic, Gabon, Niger, and Uganda meet the AGOA eligibility requirements.”
By press time, neither the Ugandan government, nor the President had responded to the pending removal of the East African Country from the lucrative trade deal.
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