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NEVILLE PETERSON LLP 1400 16th Street, N.W. • Suite 350 • Washington, D.C. 20036 Telephone: (202) 861-2959 • Fax: (202) 861-2924 and 861-6077
July 21, 2017
VIA REGULATIONS.GOV (Docket No. USTR-2017-0008)
Office of the United States Trade Representative Trade Policy Staff Committee AGOA Implementation Subcommittee 600 17th Street, NW Washington, D.C. 20508
PETER J. BOGARD
Direct: (202) 776-1149 New York Bar District of Columbia Bar [email protected]
PUBLIC VERSION
Confidential Information Redacted From Pages 3 and4
Re: Out-of-cycle Review of African Growth and Opportunity Act Eligibility and Benefits for Rwanda, Tanzania, and Uganda; Post-Hearing Comments of Secondary Materials and Recycled Textiles Association
Dear Trade Policy Staff Committee:
On behalf of our client, the Secondary Materials and Recycled Textiles Association
("SMART"), we hereby submit these Post-Hearing comments regarding the out-of-cycle review
of African Growth and Opportunity Act ("AGOA") beneficiary countries Rwanda, Tanzania, and
Uganda pursuant to the notice in the June 20, 2017 Federal Register. 1
1 Request for Comments and Notice of Public Hearing Concerning an Out-of-Cycle Review of Rwanda, Tanzania, and Uganda Eligibility for Benefits Under the African Growth and Opportunity Act, 82 Fed. Reg. 28217 (USTR June 20, 2017).
New York Office One Exchange Plaza • SS Broadway • Suite 2602 • New York, NY 10006
www.npllptradelaw.com
NEVILLE PETERSON LLP Trade Policy Staff Committee July 21, 2017 Page2
As explained in its Pre-Hearing comments, SMART maintains that tariff increases from
$0.20 per kilogram or 35 percent ad valorem to $0.40 per kilogram or 35 percent ad valorem by
Tanzania and Uganda, and from $0.20 per kilogram to $2.50 per kilogram by Rwanda2 amount
to a de facto ban on imports of secondhand clothing from the United States into these East
African Community ("EAC") countries. These tariff increases conflict with Section 104 of the
AGOA, because they constitute (1) the erection of new barriers to U.S. trade and (2) a failure to
progress toward developing market economies. SMART has therefore requested that imports of
new apparel from Rwanda, Tanzania, and Uganda be removed from duty-free status under
AGOA until those countries reverse their tariff increases and commit not to ban imports of
secondhand clothing from the United States.3
As discussed below, nothing in the testimony of witnesses opposed to this review
suggests that the requested exemption of duty-free status is not warranted. Aside from
repeatedly contending that a "phase-out" of imports of used clothing over a three year period
does not constitute a ban on such imports, these witnesses offered little of substantive relevance
to SMART's contentions. In general, the witnesses presented arguments as to why Tanzania,
Rwanda, and Uganda should not lose their AGOA beneficiary status. Those arguments are
irrelevant, however, because SMART is requesting suspension of duty-free status for eligible
2 While witnesses at the hearing characterized Rwanda's draconian tariff increases as a one-year exemption from
the EAC's common external tariff, the Panel correctly noted that the "exemption" was recently renewed.
3 Kenya has not implemented higher tariffs on imports of secondhand clothing, and thus it is not currently subject to
this out-of-cycle review. Op. Cit. As discussed in SMART's pre-hearing comments, a recent news report strongly suggests that Kenya may consider secondhand clothing to be a "used good" subject to a recently announced minimum duty on containers. If this new duty is in fact imposed on secondhand clothing, SMART urges that Kenya should be treated as subject to this out-of-cycle review. On the other hand, if Kenya does not include secondhand clothing in its used goods tariff, SMART supports excluding Kenya from this out-of-cycle review.
NEVILLE PETERSON LLP Trade Policy Staff Committee July 21, 2017 Page 3
apparel imports from these three countries, not the countries' removal from beneficiary status.
None of the witnesses addressed the hardship that the tariff increases and proposed ban are
having on the United States secondhand clothing industry. They merely characterized trade in
used clothing as insignificant in the overall context of U.S. - EAC trade. Their remaining
arguments were unsupported, inaccurate assertions or personal opinions. None are persuasive.
The Specific Tariff Rate Of $0.40 Per Kilogram Is a Tariff Increase, Not An Alignment To The Ad Valorem Rate
The witnesses for Uganda, Rwanda, and Tanzania each asserted that raising the specific
tariff rate from $0.20 to $0.40 per kilogram merely aligns the specific tariff rate with the 35
percent ad valorem rate, and, as such, is not a tariff increase. The experience of SMART' s
customers in the EAC demonstrates that this assertion is incorrect. A number of East African
importers of used clothing have reported to SMART members that they are being assessed
significantly higher import duties under the $0.40 per kilogram specific rate.
As an example, a SMART member has in its possession Customs documents from the [
]4 authority concerning two entries of merchandise covered by the tariff on
secondhand clothing. One entry is from 2015, and the duty was assessed at 35 percent ad
valorem. The other entry is from 2017 and the duty was assessed at $0.40 per kilogram. The
2017 entry demonstrates that the U.S. $0.40 per kilogram tariff rate in fact is equivalent to an ad
valorem tariff rate of [ ]. This far exceeds the 35 percent ad valorem rate
4 SMART is claiming Business Confidential Information status for material contained in brackets("[ ]"). The documents referenced and the information in them are highly sensitive. The SMART member company that possesses these documents believes that if its sources can be identified, the sources have a legitimate fear of reprisal by governmental authorities in the relevant country. For that reason, the documents have not been attached to these comments.
NEVILLE PETERSON LLP Trade Policy Staff Committee July 21, 2017 Page4
assessed in the 2015 Customs documents. A comparison of the 2015 and 2017 Customs entry
documents shows that the assessed value of the 2017 entry was just [ ] percent of the
assessed value of the 2015 entry, yet the 2017 entry was assessed with [ ] percent more
duty than was the 2015 entry. This confirms that the increase of the specific rate does not align
with the ad valorem rate, but in fact far exceeds it. Moreover, an effective ad valorem rate in
excess of [ ] strongly supports SMART' s position that the tariff increases amount to
a de facto ban on the importation of secondhand clothing into the EAC.
Hearing Testimony Confirms That Tanzania, Rwanda, and Uganda Are Not Progressing Toward Market Based Economies
At its core, the proposed import ban is designed to give an advantage to the local EAC
textile industry, as several statements made by witnesses for the EAC testifying parties during
the hearing affirm. Thus, it blatantly conflicts with the statutory requirement that AGOA
beneficiaries work toward developing market-based economies. For example, the Trade
Minister of Uganda stated that the market for clothing in Uganda "needs guidance," because
development of textile and footwear manufacturing in Uganda is a priority in the country's
industrialization of its economy. Thus, she contended a ban on secondhand clothing imports is
necessary to steer consumers toward new clothing. In this vein, it was stated that Uganda's tariff
structure is constantly evaluated to "supplement" the free market economy. Moreover, the Trade
Minister stated that to advance Uganda's transition from a secondhand clothing market to a new
clothing market, Uganda would subsidize those workers in the secondhand clothing industry who
would lose their jobs as a result of the tariff increases and import ban. The Rwandan
Ambassador described the import ban as a "promotion of industry" within that country.
NEVILLE PETERSON LLP Trade Policy Staff Committee July 21, 2017 Page 5
Remarkably, both Uganda's Trade Minister and a witness for Tanzania touted available
government incentives that would be provided if SMAR T's members decided to grow cotton in
their countries. Such efforts to guide these economies through the adoption of protectionist trade
policies and subsidization of specific sectors of the economy do not manifest progress toward
developing market based economies.
There Is Little Or No Evidence That Tariff Increases On Secondhand Clothing Reduce Poverty In The EAC
Banning the importation of second hand clothing also contravenes the statute's
requirement that a beneficiary country "has established or is making continual progress
toward establishing ... economic policies to reduce poverty." When repeatedly pressed
by the Panel for evidence to back up their claims that the ban would improve the
economic standing of their citizens, witnesses for the three countries could provide only
minimal information. The Ugandan Trade Minister asserted that Uganda had conducted
a study and found that workers who left the secondhand clothing industry managed to
find work elsewhere, but provided no further details. The Rwandan Ambassador could
not estimate the number of Rwandans who worked in the country's used clothing sector.
She stated that Rwanda has not conducted any studies to see if jobs created in the apparel
manufacturing industry as a result of the ban would outweigh the loss of jobs in the
secondhand clothing industry. A witness for Tanzania testified that the country was
conducting some studies in this area, but that these were on going. No witness at the
hearing could cite evidence demonstrating that the tariff increases or proposed ban on
imported used clothing had resulted in growth in the domestic apparel industry.
NEVILLE PETERSON LLP Trade Policy Staff Committee July 21, 2017 Page 6
Essentially, the EAC witnesses provided no evidence to support their assertions that the
ban would improve the lives of their citizens.
Tariff Rates On New Apparel Encourage Imports From China And Asia
The existing EAC tariff rates on imports of new apparel support SMART' s position that
the EAC's goal of protecting and expanding local textile manufacturing cannot be achieved
because existing EAC tariffs covering imports of Chinese and other Asian produced textiles.
Witnesses for the EAC testified that new apparel from China and Asia does not enter the EAC
duty free, implying that the tariff status of new apparel is not more favorable than that of used
clothing. But in fact, new apparel does enjoy a lower tariff burden. For example, the maximum
rate on non-cotton textiles and apparel is 25 percent ad valorem. On its face, this rate is lower
than the 35 percent ad valorem rate on secondhand clothing. The tariff rate for cotton textiles
and apparel is 50 percent ad valorem. While this may appear to be higher than the rate for used
clothing, in fact the ad valorem equivalent of $0.40 per kilogram is higher than 50 percent, as the
documents described previously in these comments demonstrate. The tariff increases adopted by
Rwanda, Tanzania, and Uganda will encourage the importation of new apparel from China and
Asia rather than promote the development of local textile and apparel industries.
There Has Not Been a Steady Decline in United States Exports of Secondhand Clothing to theEAC
In their testimony, the panel of Ugandan witnesses asserted that exports of secondhand
clothing to Uganda began to decline as early as 2012, and that the EAC import ban announced in
February 2015 cannot, therefore, be the reason for the decline in U.S. exports on secondhand
clothing. The Ugandan panel is incorrect in these assertions.
NEVILLE PETERSON LLP Trade Policy Staff Committee July 21, 2017 Page 7
The data that the Ugandan Ministry of Trade cited in its pre-hearing comments and
testimony cannot be replicated. This data was sourced from something called the "ITC Trade
Map," a website having no official relationship with any customs authority - and certainly none
with the U.S. International Trade Commission ("USITC"). The data cited by Uganda does not
correspond to the official United States export statistics for Harmonized Tariff Schedule heading
6309 as reported on the USITC's "Trade Dataweb."
The USITC data shows that United States exports of secondhand clothing to the EAC
remained relatively stable between 2011 and 2014, dropping from $25.2 million in 2011 to $23.9
million in 2014. However, in 2015 (the year that the intent to ban secondhand clothing imports
was announced), the value of U.S. imports into the EAC dropped to $16.9 million. The value of
U.S. imports into the EAC dropped even further to $13.7 million in 2016, the year the first phase
of the ban came into effect. The data set is attached as Attachment A. The US ITC data on
exports of used clothing to Rwanda, Uganda, and Tanzania confirms that the decline began in
2015 and correlate to the announcement of the proposed import ban.
Exports of Secondhand Clothing to the EAC Are Subject To Pre-Export Inspection To Confirm Conformity to EAC Hygiene Regulations
In their testimony, Uganda's representatives suggested that an import ban could be
justified as a health and safety measure to eliminate hygienic problems associated with used
clothing. This suggestion was echoed in several prehearing comments from the various EAC
members. The suggestion that an import ban is a health and hygiene measure cannot be squared
with the facts, however.
NEVILLE PETERSON LLP Trade Policy Staff Committee July 21, 2017 Page 8
Unacknowledged by the witnesses is the fact that, in order to be imported into Tanzania,
Rwanda, or Uganda, a shipment of secondhand clothes must be accompanied by a "Certificate of
Conformity" confirming that the shipment has been inspected and both conforms to the asserted
classification as used clothing and meets the importing country's health standards. In order to
obtain such certificates, SMART member companies must fumigate their secondhand clothing
inventory and undergo physical inspection of the merchandise prior to shipment. Such pre-
shipment inspections are conducted by such well-known and well-respected third party
inspection services as SGS and Bureauveritas. Such pre-shipment inspection includes
verification that the shipment has been fumigated and that it contains used clothing. Pre-
shipment inspection is a mandatory procedure in all three countries. Without a Certificate of
Conformity, no shipment of secondhand clothing would be allowed to enter any of the three
countries.
As a final point, the specter of used, soiled undergarments being sold to East African
consumers, which the Ugandan Trade Minister raised to justify the proposed used clothing ban,
has no basis in fact. The EAC has for years banned imports of used undergarments. SMART
members have never protested this ban, and SMART member companies do not export
undergarments to these countries. Any shipment that contained used undergarments would fail
pre-shipment inspection, would therefore not be granted a Certification of Conformity, and thus
would not be allowed to enter Rwanda, Uganda, or Tanzania.
NEVILLE PETERSON LLP Trade Policy Staff Committee July 21, 2017 Page 9
The Secondhand Clothing Exported To Rwanda, Uganda, and Tanzania Is Determined By What The Market In Those Countries Requires
The Trade Minister for Uganda further suggested that secondhand clothing exported from
the United States is damaged, with missing buttons, tom fabric, and other flaws rendering the
clothing shoddy and of poor quality. But as SMART testified, the East African market dictates
the type of goods that SMART's members can successfully export, and they ship only goods that
the market demands. Consumers in East Africa demand quality in used clothing. They will not
purchase goods that are overly worn, or tom, or missing buttons. Such damaged goods do not
sell, and attempting to sell them would be a strategy for failure. That is one reason why
secondhand clothing exporters in the United States engage in extensive, multi-tiered sorting and
grading processes prior to preparing goods for export. It simply makes no business sense to
export secondhand clothing of such poor quality that no one will buy it.
Similarly, it makes no business sense for U.S. exporters to acquire new, unworn apparel
and export it to markets where consumers will buy it only at used clothing prices. Absent tariffs,
or the threat of an out-right ban, the reality of market demand in Rwanda, Uganda, and Tanzania
determines the used clothing products that SMART' s members export.
Secondhand Clothing Exports Do Not Circumvent New Clothing Duties or Intellectual Property Laws
Citing no evidence other than vague "conversations with friends at the World Trade
Organization," Stephen Lande of Manchester Trade asserted that the importation of secondhand
clothing may be used for purposes of smuggling new clothing disguised as used clothing, or for
circumventing intellectual property laws. Both of these assertions are without merit.
NEVILLE PETERSON LLP Trade Policy Staff Committee July 21, 2017 Page 10
In the first place, as discussed above, the tariff burden on new apparel is effectively lower
than it is for used clothing. It makes no sense to intentionally re-classify new apparel as used
clothing and subject it to a high tariff rate. Furthermore, as also discussed above, Rwanda,
Uganda, and Tanzania require that shipments of secondhand clothing be accompanied by
Certificates of Conformity certifying, inter alia, that the shipment is what it claims to be - i.e.
secondhand clothing. Mixing new apparel into a shipment of used clothing would result in a
denial of the issuance of the Certificate of Compliance.
Moreover, secondhand clothing is imported in bales, as illustrated by the attached article
and accompanying photograph. 5 The photograph shows mixed clothing in different colors, sizes,
and styles compressed and wrapped in plastic and shipping straps. This photograph is
demonstrative of the typical form in which secondhand clothing is packed for export. An
exporter is not likely to risk damage to new clothing using a shipment method that essentially
treats used clothing as a commodity.
Circumventing intellectual property laws via exports of secondhand clothing is equally
implausible. First, with regard to used clothing, the first sale doctrine provides that an individual
who knowingly purchases an item subject to copyright or trademark protection from the holder
receives the right to sell, display or otherwise dispose of that particular product, notwithstanding
the interests of the copyright or trademark owner. 6 Simply put, any intellectual property rights
that a copyright or trademark owner may have are waived once the product is purchased, and the
purchaser is free to sell or donate the product as they see fit. Second, with respect to new
5 See Attachment B.
6 See 17 U.S.C. § 109.
NEVILLE PETERSON LLP Trade Policy Staff Committee July 21, 2017 Page 11
clothing, as previously explained, the shipments must be inspected and receive a Certificate of
Conformity. The packaging method that is used for secondhand clothing that is exported risks
damaging the far more valuable product. The intellectual property concerns suggested by Mr.
Lande are unwarranted.
There Is No Apparent Reason Why The Loss Of Duty-Free Status For Apparel Would Shift Sourcing To China
In his testimony, the representative for SanMar Corporation asserted that if Tanzania
were to lose duty-free status for its exports of clothing to the United States, his company would
be forced to change suppliers to factories located in China. This assertion is unsupported, and
there is no apparent reason why such a shift in suppliers would take place as a result of losing
duty-free status.
Imports of apparel from China into the United States do not have duty free status. If
apparel from Tanzania were to lose its AGOA duty-free status, then it would merely revert to the
standard duty rate, placing it on the same tariff footing as China. The costs of locating new
suppliers in China, establishing commercial relationships with them, and setting up logistics for
transportation and importation into the United States would be substantial. SanMar would not
incur such costs if it remained in Tanzania. There is no obvious reason why SanMar (or any
other importer of apparel from the EAC) would incur relocation costs merely because imports
from the EAC no longer had a tariff advantage over China. Notable in this regard, when pressed
by the USTR as to how a move to China would make financial sense for SanMar, its
representative merely stated that there were a lot of variables to consider.
NEVILLE PETERSON LLP Trade Policy Staff Committee July 21, 2017 Page 12
SanMar is not the only U.S. company importing apparel from the EAC. For example,
Rwanda asserted that Kate Spade has manufacturing facilities in the country. Yet, neither Kate
Spade nor any other importer of apparel from the EAC has argued that a loss of duty-free status
would cause them to shift to suppliers in China. It is reasonable to conclude that this is because
the costs resulting from apparel imports from the EAC being placed on an equal tariff footing
with China do not outweigh the costs attendant to disrupting existing supply chain relationships.
The Smart Survey Is Attached For the Public Record
Pursuant to the request made at the hearing, a copy of SMART' s survey of relevant
members, documenting the effect that that the increase in the per kilogram tariff is already
having on the U.S. industry, is attached at Attachment C.
SMART's members engaged in exporting secondhand clothing Rwanda, Uganda, and
Tanzania are privately held corporations. Competition among these industry members is intense.
Consequently, we are unable to obtain and submit the financial records of any of the companies
that export secondhand clothing to East Africa. SMART is confident, however, that the results
of its survey do accurately show the negative effect that of the tariff increase and proposed
import ban is having on its relevant members.
HTS - 6309: WORN CLOTHING AND OTHER WORN TEXTILE ARTICLES
FAS Value by FAS Value
for Rwanda, Tanzania and Uganda
U.S. Domestic Exports
Annual Data
-Country 2011 2012 2013 2014 2015 2016 Percent Change
In 1,000 Dollars 2015- 2016 Tanzania 23,169 23,727 23,134 22,558 15,668 12,060 Uganda 1,856 1,892 1,175 917 1,145 1,578 Rwanda 177 212 314 490 130 150
Total 25,203 25,831 24,622 23,965 16,943 13,788
-23.00% 37.80% 15.60%
-18.60%
Sources: Data on this site have been compiled from tariff and trade data from the U.S. Department of Commerce
and the U.S. International Trade Commission.
wanda, Tanzania and Uganda face US sanction after used clothes ban... http://www.africanews.com/2017 /06/21/rwanda-tanzania-and-uganda-...
, .... f 11
•Weather
Rwandap Tanzania and Uganda face US sanction after used clothes ban
21 hours ago
The U.S. Trade Representative said on Tuesday it was reviewing trade benefits to Rwanda, Tanzania and Uganda under the African Growth and Opportunity Act (AGOA) after a
complaint by U.S. interests about an East African ban on imports of used clothing.
USTR said the "out-of-cycle" review was in response to a petition filed by the Secondary Materials and Recycled Textiles Association (SMART), which complained that the ban
"imposed significant hardship" on the U.S. used-clothing industry and violated AGOA rules.
6/21/17, 3:49 PM
v.randa, Tanzania and Uganda face US sanction after used clothes ban... http://www.africanews.com/2017/06/21/rwanda-tanzania-and-uganda-...
~+11
"Through the out-of-cycle review, USTR and trade-related agencies will assess the allegations contained within the SMART petition and review whether Rwanda, Tanzania, and
Uganda are adhering to AGO/'!s eligibility requirements,'' USTR said in a statement.
The move follows a decision by the six-nation East African Community - Kenya, Uganda, Rwanda, Burundi, Tanzania and South Sudan - to fully ban imported second-hand clothes
and shoes by 2019, arguing it would help member countries boost domestic clothes manufacturing.
The USTR did not elaborate on why the three countries were singled out for review.
The AGOA trade program provides eligible sub-Saharan countries duty-free access to the United States on condition they meet certain statutory eligibility requirements, including
eliminating barriers to U.S. trade and investment, among others.
U.S. AGOA imports from Rwanda, Tanzania, and Uganda totaled $43 million in 2016, up from $33 million in 2015, according to the USTR. U.S. exports to Rwanda, Tanzania, and
Uganda were $281 million in 2016, up from $257 million the year before, it said.
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6/?.1117. 1:49 PM
Impact of Proposed EAC Ban on Secondhand Clothing, Footwear and Household Textiles Survey
Used Clothing I Footwear ...
Used Clothing I Footwear ...
Broker
Other (please specify)
Answer Choices
Used Clothing I Footwear Grader
Used Clothing I Footwear Collector
Broker
Other (please specify)
Total Respondents: 22
# Other (please specify)
we cut wiping rags
0%
Please check which of the following apply:
10% 20% 30% 40% 50% 60% 70%
2 Ocean Transportation Intermediary (OTI)
3 Agent for sored clothing
4 Distributor of cut wiping rags
1 I 17
80% 90% 100%
Responses
54.55%
40.91%
36.36%
18.18%
Date
3/1412017 12:33 PM
3113/2017 1:08 PM
3/912017 12:46 PM
3/912017 11 :44 AM
12
9
8
4
Impact of Proposed EAC Ban on Secondhand Clothing, Footwear and Household Textiles Survey
Answer Choices
100% Less
75% Less
50% Less
25% less
NO Change
25% More
50% More
My firm does NOT export used clothing directly to EAC countries, but the recent
duty increases imposed by these countries since the third quarter of 2016 have affected
the dollar value of my overall sales as follows:
100% Less
75% Less
50% Less
25% less
NO Change
25% More
50% More
75% More
100% More
Greater than 100%
0% 10% 20% 30% 40% 50%
2 I 17
60% 70% 80% 90% 100%
Responses
0.00%
0.00%
20.00%
60.00%
15.00%
5.00%
0.00%
0
0
4
12
3
0
Total
Impact of Proposed EAC Ban on Secondhand Clothing, Footwear and Household Textiles Survey
75% More
100% More
Greater than 100%
3 I 17
0.00%
0.00%
0.00%
0
0
0
20
Impact of Proposed EAC Ban on Secondhand Clothing, Footwear and Household Textiles Survey
Answer Choices
100% Less
75% Less
50% Less
25% less
NO Change
25% More
Since July 2016 my firm has directly exported used clothing/footwear to Rwanda and an increase in duties has impacted my sales to this country as follows. (Indicate
the percentage change in the dollar value of your sales to RWANDA since their recent
duty increases.)
100% Less
75% Less
50% Less
25% less
NO Change
25% More
50% More
75% More
100% more
Greater than 100%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Responses
27.27%
9.09%
0.00%
18.18%
36.36%
9.09%
4 I 17
3
0
2
4
Impact of Proposed EAC Ban on Secondhand Clothing, Footwear and Household Textiles Survey
50% More 0.00% 0
75% More 0.00% 0
100% more 0.00% 0
Greater than 100% 0.00% 0
Total 11
5 I 17
Impact of Proposed EAC Ban on Secondhand Clothing, Footwear and Household Textiles Suvvey
Answer Choices
100% Less
75% Less
50% Less
25% less
NO Change
25% More
50% More
Since the second and third quarters of 2016, please indicate the approximate
percentage change in the dollar value of your sales to other EAC countries, Uganda, Tanzania, Kenya {excluding Rwanda) due to
recent duty increases.
100% Less
75% Less
50% Less
25% less
NO Change
25% More
50% More
75% More
100% More
Greater than 100%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Responses
0.00%
25.00%
18.75%
43.75%
6.25%
0.00%
0.00%
6 I 17
90% 100%
0
4
3
7
0
0
Total
Impact of Proposed EAC Ban on Secondhand Clothing, Footwear and Household Textiles Survey
75% More
100% More
Greater than 100%
6.25%
0.00%
0.00%
7 I 17
0
0
16
Impact of Proposed EAC Ban on Secondhand Clothing, Footwear and Household Textiles Survey
Answer Choices
100% Less
75% Less
50% Less
25% less
No Change
25% More
50% More
Since second and third quarters of 2016 please indicate the approximate percentage
change in the number of employees you employ collecting or grading used
clothing/footwear since EAC nations implemented tariff increases.
100% Less
75% Less
50% Less
25% less
No Change
25% More
50% More
75% More
100% More
Greater than 100%
0% 10% 20% 30% 40%
8 I 17
50% 60% 70% 80%
Responses
0.00%
0.00%
15.00%
25.00%
55.00%
5.00%
0.00%
90% 100%
0
0
3
5
11
0
Impact of Proposed EAC Ban on Secondhand Clothing, Footwear and Household Textiles Survey
75% More
100% More
Greater than 100%
Total
9 / 17
0.00%
0.00%
0.00%
0
0
0
20
Impact of Proposed EAC Ban on Secondhand Clothing, Footwear and Household Textiles Survey
Answer Choices
100% Less
75% Less
50% Less
25% Less
NO Change
25% more
50% More
75% More
In your expert opinion how would a ban by EAC likely affect the funding you supply to charitable organizations? (Indicate the
percentage change in the funding you would supply to charitable organizations)
100% Less
75% Less
25% Less
NO Change
25% more
50%More I 75% More
100% More
Greater than 100%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Responses
5.00%
5.00%
30.00%
30.00%
25.00%
0.00%
5.00%
0.00%
10 I 17
6
6
5
0
0
Impact of Proposed EAC Ban on Secondhand Clothing, Footwear and Household Textiles Survey
100% More
Greater than 100%
Total
11 I 17
0.00%
0.00%
0
0
20
Impact of Proposed EAC Ban on Secondhand Clothing, Footwear and Household Textiles Survey
Answer Choices
100% Less
75% Less
50% Less
25% less
NO Change
tf In your professional experience, please estimate how a ban by EAC countries on
secondhand clothing would impact revenue to your company? For companies not
exporting directly to this area, consider the effect on supply, demand and in the event of a ban, how potential lower demand in EAC countries may place stress on other
African markets or rag markets in general.
100% Less
75% Less
50% Less
25% less
NO Change
25% more
50% More
75% More
100% More
Greater than 100%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Responses
0.00%
31.58%
31.58%
31.58%
0.00%
12 I 17
0
6
6
6
0
Impact of Proposed EAC Ban on Secondhand Clothing, Footwear and Household Textiles Survey
25% more
50% More
75% More
100% More
Greater than 100%
Total
13 I 17
0.00%
0.00%
5.26%
0.00%
0.00%
0
0
0
0
19
Impact of Proposed EAC Ban on Secondhand Clothing, Footwear and Household Textiles Survey
Answer Choices
100% Less
75% Less
50% Less
25% Less
NO Change
25% more
50% More
75% More
In your professional experience, please estimate how a ban by EAC countries on
secondhand clothing would affect employment in terms of number of jobs
provided by your company?
100% Less
75% Less
50% Less
25% Less
NO Change
25% more
50% More
75% More
100% More
Greater than 100%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Responses
0.00%
15.79%
36.84%
31.58%
10.53%
0.00%
0.00%
5.26%
14 I 17
90% 100%
0
3
7
6
2
0
0
Impact of Proposed EAC Ban on Secondhand Clothing, Footwear and Household Textiles Survey
100% More
Greater than 1 00%
Total
0.00%
0.00%
15 I 17
0
0
·19
#
2
3
4
5
6
7
8
9
Impact of Proposed EAC Ban on Secondhand Clothing, Footwear and Household Textiles Survey
Responses
Please commenf here in-2;.-3 sentencesas to any other thoughts or ideas related to
how an increase in duties is currently affecting your company or how a ban may affect your company in the future. Please
focus on how it may affect jobs and revenue.
We have been doing business with Kenya for 25 years. Obviously this would impact not only our sales but put a lot of
people in these areas out of work.
We are one of the nation's largest buyers and seller of institutional mixed rags and credential clothing. We have
already felt a large impact with one of our largest customers closing down entirely in one of the EAC countries. If the
ban were to go through, prices would drop drastically, many companies would have a hard time staying open.Charities
that supply these goods would find a significant drop in revenue and would likely have to cut many of their programs
that this material is sold to fund.
The ban would create a situation in where we would have to cut 40% of our workforce and furthermore it would create
a influx of products into other countries thus driving down our overall sales and demand for product. This would be
detrimental to our longterm longevity as used clothing recycler in the USA.
The market on sales side in Africa will become more tense, payments will be further delayed and re-routed through
other channels, making all more cumbersome and more risky to manage
Dear all, As far as our company is focussed on bin collection, the ban will not directly affect our business, but we do fill
how difficult the market become recently. I expect, we all, to decrease our employment needs in near future, due not
to the efficiency, but to the future ban. I also expect negative impact not only over the used clothing companies in the
US, but also to the people in need from the fourth countries in EAC. Best Regards, Teodor Stanchev COO Green
Team Worldwide Environmental Group
I comment now not as a physical exporter of secondhand clothing, per se, but as a transportation company arranging
for the ocean carriage of these goods to this area of the world. Literally 90 percent of the volume moving via ocean
carrier to these several destinations in comprised of secondhand clothing. Either a significant increase in duties or an
outright ban on these commodities will severely impact this trade lane and result in critical losses to revenue, the likely
loss of jobs, and possible closure of companies directly involved in this specific trade Jane/commodity. Competing
countries such as China will dump inferior "new" products to these areas, to the detriment of all concerned.
As a large North East used clothing and textile collector, this ban will have a massive impact upon our business. We
currently employ approximately 65 team members, and are very worried that a continuation of the ban could destroy
our family owned company.
I fear a run on the markets with values dropping quickly if the EAC Ban takes effect. An unstable market created its
own perfect storm with customers racing to drop their purchase price in concert with their competition. This impacts
the entire global industry, as other markets work quickly to balance their own demand I price ratios
A ban of secondhand would have a crippling effect on our business. We estimate an initial 50% job Joss of the 70+
employees our firm employs. There would be a deep decreases in funds paid to chairities as supply of rags purchased
from charities would far exceed demand due to decreased demand for finished goods caused by a ban and
subsequent oversupply in other markets.
16 I 17
Date
3/16/2017 1 ·1 :22 AM
3/15/2017 5:00 PM
3/15/2017 10:12 AM
3/15/2017 4:32 AM
3/14/2017 10:07 PM
3/13/2017 1 :08 PM
3/10/201711:31 AM
3/9/2017 7:14 PM
3/9/2017 5:16 PM
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Impact of Proposed EAC Ban on Secondhand Clothing, Footwear and Household Textiles Survey
I just sent in my survey, but wanted to add a couple comments that I think are important. I think a strong argument
against the EAC ban from these four countries or any Third World or Developing country is as follows: The reason for
such a ban by these four African countries is supposedly because manufacturers of new garments in these countries
don't want to lose sales to used clothing & used shoes buyers. However, the millions of people who buy used
merchandise surely will not be able to afford the cost of the new clothing & shoes that will be manufactured by these
African companies that will benefit from the EAC ban. U.S. graders will surely find other markets to sell their product
to, albeit maybe at lower prices, but the goods will be sold and loss of jobs will probably be minimal at most. In
addition to lobbying in the U.S., I think it'd be more effective if we also dealt with the issue on the other side, e.g.
talking to the governments of those four contries somehow. Let them know that even if the new clothing & shoes being
manufactured in these four countries is sold at a deeply reduced price for locals, these locals still won't be able to
afford these new goods. Millions of people in these four countries will have no clothing available to them, the entire
used clothing & shoes industry in these countries will grind to a halt (it's already begun) and undoubtedly thousands of
jobs will be lost from people who work in conjunction with the used clothing & shoes wholesalers and retailers in these
countries. Having the U.S. Smal! Business Association, etc. putting pressure on these countries probably will have
little effect. However if the presentation to the governments of these four countries hits home with the lack of available
clothing (especially for growing children), the huge drop in businesses creating revenue, and more unemployment
(which leads to social problems), that might be a better approach, i.e. we'd be telling these four countries how this ban
will hurt these four countries, rather then telling them how the ban will hurt wealthy countries who grade the clothing &
shoes.
We stopped grading used clothing in 1999, so that part of the ban does not effect us. However we do a big business in
used shoes, used purses/handbags/belts, and other items and the EAC ban has definitely affected our business with
Kenya, where business there now is almost non-existent for us. So our revenues to Kenya are down about 90%.
However we haven't laid anyone off yet. I'm getting different reports as to the exact implementation of the ban; my
main customer there says her duty has jumped from $10,200 up to $20,000 per container. She says it's a three-year
ban that has been in effect for a year, so she's hoping things change over the next two years. Another prospective
buyer has told me that it has not even gone into effect yet. I'd like SMART to give some clarity to this issue.
As a raw material supplier to textile graders , our bottom line is effected directly to the Ban
A total ban would limit resources gained by having the second hand clothing graders and processors. A severe
reduction in this area would cause fairly severe job losses due to escalating costs of goods and decreases in
consumer purchases as they move to other wiping products.
The increase in duties in East Africa has reduced the purchasing power of my customers by 50%, hence our sales
have dropped by 50%, and consequently workforce reduced by 30%. Any further increase in duties and a proposed
ban, will force my business to shut down.
Kenya has been a good market for up for years. The impact on higher duties has forced us to lower prices to help
offset increased duties.
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3/9/2017 2:31 PM
3/9/2017 2:11 PM
3/9/201712:46 PM
3/9/2017 11 :44 AM
3/9/2017 11 :42 AM
3/9/201711:42AM