African Nations Are Fed Up With the West's Hand-Me-Downs. But It's Tough to Keep Them Out.

By Max Bearak and David J. Lynch, The Washington Post

29 May 18

 

hen spring cleaning comes around in the United States, dropping well-loved clothes into a donation box can feel like an act of selflessness. Those stained sweaters, summer camp T-shirts and out-of-fashion shorts will clothe someone needier, right?

It’s actually a little more complicated. Most of America’s castoff clothes are sold by the Salvation Army, Goodwill and others to private companies. Bales of used clothing are then shipped by the container-load, mostly to sub-Saharan Africa, in what has become a billion-dollar industry.

African governments have become increasingly fed up. What many in the West think of as a gesture of generosity, they say, is preventing them from building their own apparel industries. In March 2016, four East African countries decided to raise tariffs on used clothing, in some cases to as much as 20 times the previous rate.

The American used-clothing lobby sounded the alarm, and last year, the Trump administration began investigating whether the four nations were violating an 18-year-old trade agreement with the United States. Under pressure, the East African governments lowered their tariffs to previous rates.

Except Rwanda.

Now, a Rwandan leader who styles himself as a proud visionary is suffering the consequences of his decision to stand up to Washington.

This week, Rwanda faces the suspension of some of its duty-free trading privileges pertaining to clothing under the African Growth and Opportunity Act. Its efforts to foster a domestic clothing industry, meanwhile, have yielded few results. And Rwandans who work in the used-clothing business are complaining that they are suffering.

The deadlock between the world’s economic giant and one of Africa’s fastest-growing economies doesn’t exactly qualify as a trade war — it’s more like a scuffle. Rwanda’s total used-clothing imports were less than 7 percent of all of East Africa’s in 2016, according to government statistics. And its clothing exports to the United States were a minuscule $2 million. 

But it reflects the difficulties that even a low-wage country like Rwanda can have developing an industry in an intensely competitive global market.

President Paul Kagame is betting that he can kick-start Rwandan manufacturing while weaning his country off the used clothing he sees as undignified. He is one of a number of African leaders who want to stem a tide of used items — from clothes to electronics to medical equipment — that end up on the continent after someone else has gotten rid of them.

“As far as I am concerned, making the choice is simple,” Kagame told reporters last June, referring to the trade dispute. “We might suffer consequences.” However, he said, Rwanda and other countries in the region “have to grow and establish our industries.”

Rwanda, like other East African countries, used to produce most of its own clothes. But in the 1980s, regional leaders worked with the World Bank and the International Monetary Fund to open up their economies and permit greater trade. That resulted in an influx of cheap imports. Political turmoil, including the Rwandan genocide in 1994, further harmed the local industry.

The clothing currently produced in Rwanda for the local market is mostly high-end and aimed at urban professionals.

Kagame’s government recently launched “Made in Rwanda,” a campaign to encourage and subsidize local production. It has, however, made scant progress so far. The luxury brand Kate Spade now assembles handbags for export in Rwanda, and two other factories have opened — one Rwandan and one Chinese-owned.

Rwanda suffers from numerous competitive disadvantages. It is landlocked and far from shipping ports; its domestic market is tiny and mostly poor; and it lacks a trained workforce. It won’t become the next Vietnam or Bangladesh anytime soon.

While the Rwandan apparel industry has barely grown, the country’s used-clothing business — known as “chagua,” from the Swahili word “choose” — has taken a hit from the new tariffs. The business employs more than 18,000 people here.

“I’ve had to triple my prices,” said Zaetzev Sibomana, 26, who sells used clothes at Nyamirambo market in Kigali, Rwanda’s capital. “What they’ve done is kill this business and with it my savings. I still live at my parents’ house, you know?”

The owners of the shops adjacent to his have gone on to sell the cheap Chinese apparel that is now replacing American used clothing. While inexpensive, the Chinese clothing is new and thus not subject to the same tariffs.

Isai Mugabo, one of those shop owners, lamented the change. Chagua was more dignified than the Chinese clothing because it allowed people to feel stylish, he said.

“Most of my customers leave my shop unsatisfied. They are used to finding something unique, but now everyone leaves with the same shirt,” he said. “It is like a Chinese uniform that everyone now walks around in.”

The main U.S. trade group for used clothing, the Secondary Materials and Recycled Textiles Association, called on American trade officials last year to review the East African nations’ hike in tariffs on used clothing, saying the measures were “already having a dramatic negative impact” on the U.S. industry.

The industry group said that 5,000 private-sector jobs plus 19,000 positions at nonprofits had disappeared and that ultimately, up to 40,000 American jobs could be “negatively impacted” by the tariff increases.

The group, based in Abingdon, Md., declined an interview request.

Three independent trade analysts questioned the industry’s job loss claims. “Those numbers sound absurdly high,” said Todd Moss, a former U.S. deputy assistant secretary of state for African affairs who is now a fellow at the Center for Global Development, a think tank.

He and others have criticized the Trump administration’s actions. “It’s particularly harmful to see the world’s largest economy — for tiny, irrelevant mercantilist reasons — choose to punish and bully an African partner,” Moss said.

Trump administration officials say tougher enforcement of international agreements is essential to rebalancing trade policy to benefit American workers. And U.S. officials note that the East African countries have to stick to what they agreed upon when they joined the accord, which offers them many benefits.

Kagame’s office declined to comment for this article, as did Rwanda’s Ministry of Trade.

In the short term, China could be the beneficiary of the trade dispute. In its review of the East African countries’ hike in tariffs on used clothing, the U.S. Trade Representative’s Office argued that Chinese imports “pose a much greater danger to East African domestic industries” than American secondhand apparel.

Chinese clothing exports to East Africa reached $1.2 billion in 2016, “dwarfing the value of used clothing by a factor of four,” the agency wrote. 

Kigali’s purveyors of used clothing say they and their customers have been left in the lurch by the trade shifts.

“Listen, in Rwanda, what we want are permanent things: clothes that last long, jobs that last long, industry that lasts long,” said Nadine Ingabire, who has sold chagua for a decade. “We are not there yet. We need chagua until we get there. We need that choice. Having only chagua isn’t great, but neither is only having cheap Chinese clothes. And to those who say ‘Buy Rwandan-made clothing,’ I say, not everyone can afford a whole wardrobe full of your best Sunday church outfits.”