Rwanda, Tanzania and Uganda say their stance to phase-out used clothes imports should not result in their ejection from the US preferential trade programme. Senior officials from the three East African Community (EAC) countries, in Washington Thursday, opposed the move by a US trade lobby to restrict their eligibility status for the African Growth and Opportunity Act (Agoa). The Secondary Materials and Recycled Textiles Association (Smart) filed a petition with US trade authorities in March urging that the three countries, along with EAC member Kenya, be deemed ineligible for Agoa's allowance of duty-free textile and apparel exports to the US market. Lawrence Bogard, Smart's lawyer, said during Thursday's US government inquiry that the association's member companies would suffer major losses in jobs and revenues if the EAC ban on used-clothing imports is fully implemented. Partial loss Mr Bogard also argued that Kenya should be included among the EAC countries facing partial loss of their Agoa benefits. Top US trade agency had announced last month that Kenya would be spared review of its Agoa eligibility. The decision was said to be based on “recent actions Kenya has taken, including reversing tariff increases, effective July 1, 2017, and committing not to ban imports of used clothing through policy measures that are more trade-restrictive than necessary to protect human health.” But the Smart lawyer argued that Kenya ought to be included in the Agoa eligibility review until Nairobi clarifies its commitments. Smart specifically seeks confirmation that Kenya's reported imposition of minimum tariffs on containers...

Tanzania, Uganda and Rwanda are defending their decision to raise tariffs on imported secondhand clothes, saying it is based on current value, trade realignment and that —for Rwanda— it’s a one-off. The three countries are reacting to calls by a US business association to restrict their eligibility for the Africa Growth and Opportunity Act (Agoa). Together with the East African Community Secretariat, they have written to the panel of the out-of-cycle review, comprised of representatives of six US government agencies: the Departments of Commerce, Labour, Treasury and State, as well as the US Agency for International Development and the Office of the US Trade Representative. The review could decide if the three countries should lose some of the benefits of Agoa. Tanzania and Uganda, in their submissions, insisted that the doubling of levies on imports of used clothing, from $0.20 to $0.40 per kilogramme, was for realignments with the current value. Tanzania’s Trade Permanent Secretary Adolf Mkenda said increase or decrease of tax, duties and fees is a fiscal decision, which is implemented as part of annual fiscal measures. Tanzania also argued that the EAC decision to phase out importation of secondhand clothing and leather is yet to be implemented, meaning claims about loss of jobs by the Secondary Materials and Recycled Textiles Association (Smart) cannot be justified. “There is no scientific proof that changes in the trade pattern and other macroeconomic variables, including jobs and shipping were caused by the EAC decision as pointed out in the petition and...

State minister for Transport Aggrey Bagiire, last week on Thursday asked his Tanzanian counterpart to harmonise the preferential treatment his country offers to transit goods as a way of encouraging the use of the Central Corridor, Uganda’s alternative access to the sea. Mr Bagiire, while signing a Memorandum of Understanding (MoU) on reviving inland transport on Lake Victoria and development of a railway as part of the Central Corridor, to implore Tanzania to reduce the high road user charges. Currently, trucks from Uganda are charged $500 (Shs1.7m) each yet Uganda charges only $40 (Shs140,000) per truck from Tanzania. The exorbitant cargo transit fees, Mr Bagiire said, were discouraging the use of the port of Dar ss Salaam by Ugandan traders since it increases the cost of transportation. According to a statement issued by the Ministry of Foreign Affairs, which coordinated signing of the MoU, Mr Bagiire asked Tanzania to “consider revising the rates downwards” to attract more traders to use the route. Dar es Salaam is Tanzania’s principal port with a rated capacity of 4.1 million down weight tonnage (dwt) dry cargo and six million dwt bulk liquid cargo. Mr Bagiire signed the MoU on behalf of Uganda while Prof Makame Mbarawa, the Transport minister, signed on behalf of Tanzania in Dar-es-Salaam. The signing was witnessed by the Charge D’Affairs at Uganda High Commission in Dar-es-Salaam, Oscar Edule, Uganda Railways Corporation (URC) managing director Charles Kateba, and other officials from the two countries. The MoU also reinforces proposed plans by...

Twenty-six African countries are rapidly moving towards finalising a preferential trade agreement which will open up significant opportunities for South African exports. The countries being integrated into a tripartite free trade area (TFTA) — seen as a critical driver of regional integration on the continent — have a combined population of 625-million people and a total GDP of $1.6-trillion. Once the tariff negotiations are finalised, the TFTA will offer exporters preferential or zero tariffs into the markets of member countries. Department of Trade and Industry deputy director-general of international trade and economic development Xolelwa Mlumbi-Peter notes that this preferential access will provide better terms of trade than are currently enjoyed. "It means that we will be able to increase our exports and advance a developmental integration agenda and the development of regional value chains, as it would be cheaper, for example, for SA to import inputs from African countries." Currently, intra-regional trade on the continent is very low. Trade Law Chambers director Rian Geldenhuys said the progress made with the TFTA was "fantastic" and would offer huge opportunities for South African businesses if implemented, particularly as the Southern African Development Community (SADC) was largely dysfunctional in terms of the implementation tariff agreements. At this stage, the TFTA agreement consists only of the legal framework with detailed negotiations on tariffs for the different products still to be finalised. Non-tariff barriers and infrastructural blockages will be addressed at a later stage. The TFTA agreement which SA signed in Uganda last week is...

The World Trade Organization issued the text of the following remarks by Director-General Roberto Azevedo: "Good morning everybody. "Welcome to the WTO and to the 2017 Global Review of Aid for Trade. "It's great to have a full house for this very important event. I am sure we will have some dynamic and fruitful discussions over the coming days. "To start things off, we have a fantastic line-up this morning. "I am pleased to be joined today by: * "the Vice President of the Gambia, Fatoumata Tambajang, * "OECD Secretary-General, Angel Gurria, * "UNCTAD Secretary-General, Mukhisa Kituyi, * "the CEO of the International Islamic Trade Finance Corporation, Hani Salem Sonbol, * "Executive Director of the International Trade Centre, Arancha Gonzalez, * "and Senior Director at the World Bank, Anabel Gonzalez. "This is one of the biggest Global Reviews so far. "We have more than 1,500 delegates taking part from around the world. "More than 20 ministers. "And leaders from a range of international organizations. "Thank you all for joining us and for making the journey to Geneva. It is a great pleasure to host you this week. "Excellencies, "Ladies and gentlemen, "17 years ago, world leaders came together to pledge to halve extreme poverty by 2015. "They met that goal - and they did it way ahead of schedule. It remains one of the most astonishing achievements of our lifetime. And trade helped to drive much of the growth and development that led to that success. "Then, two years ago, just after the last Global Review, world leaders came together again. This time they pledged to...

TradeMark Africa and the International Organization for Migration have entered into a partnership agreement that will facilitate faster clearance of migrants at border posts. The two organizations will soon implement a border project in the Great Lakes region with roll out to other areas expected in future. The partnership will provide integrated solutions for the safe and orderly movement of people and goods across international borders. Under the partnership the organizations, in conjunction with government agencies, will provide integrated border management processes that will cover customs and standards, and also human mobility. As a trade facilitation organisation, TradeMark Africa (TMA) has enabled interventions across the 6 East African countries that contribute to boosting trade in goods and services. It has facilitated construction of 13 One Stop Border Posts and adoption of one stop controls that bring border officials from neighbouring countries under one roof, enabling those crossing the border to stop only once in the country of destination. IOM works to help ensure the orderly and humane management of migration, to promote international cooperation on migration issues, to assist in the search for practical solutions to migration problems and to provide humanitarian assistance to migrants in need. Source: Africa Business Communities

Cartel fears are rising and shippers are getting concerned by the dramatic drop in choice of carriers, in the wake of unprecedented liner shipping consolidation. Just weeks after HAPAG-LLOYD’s merger with UASC created the fifth-largest liner shipping company, COSCO and port operator Shanghai International Port Group (SIPG) could make the 3rd largest, by jointly offering $6.3bn to acquire the Hong Kong shipping line OOCL – Orient Overseas International Ltd. The Offer is dependent upon the satisfaction of pre-conditions, which include the necessary regulatory approvals as well as approval from COSCO Shipping Holdings shareholders. The controlling shareholder, who currently holds 68.7% of OOCL, has irrevocably undertaken to accept the Offer. If successful this latest acquisition is one of the largest in a series of major container shipping events including CMA CGM’s $2.4bn acquisition of NOL in 2016; the merger in 2016 of COSCO and China Shipping; the 2016 bankruptcy of Hanjin Shipping; Maersk’s $4bn acquisition of Hamburg Süd; the announced ONE merger of Japanese lines and the merger in June of Hapag-Lloyd and UASC which is outlined at the bottom. COSCO pledged to keep the OOCL brand and its Hong Kong headquarters, and provided assurances that jobs are safe for at least 24 months. The combined COSCO/OOCL will operate more than 400 vessels over a much expanded network, with capacity exceeding 2.9 million TEUs including order-book. Analysts fear that with the COSCO deal the market share of the top four carriers would rise to 53.8% and there is a real danger of the market becoming an...

Kenya has announced plans to buy new equipment for testing cooking gas entering the local market by road at border points in a move that could end the raging trade dispute with Tanzania The Energy Regulatory Commission (ERC) Tuesday said it was procuring two test machines — gas chromatography-mass spectroscopy (GCMS) — for the inspections. This came after Ministry of Energy officials in May banned gas imports from Tanzania through land border due to failure to meet safety standards that exposed Kenyan consumers to the risk of cylinder explosions. “Purchase of an additional two GCSM machines is necessary in order to ensure that all LPG (liquefied petroleum gas) entering the country through the road border points is sampled and tested,” ERC acting director-general Pavel Oimeke told the Business Daily. The ERC puts the cost of one machine at between $100,000 (Sh10.3 million) and $400,000 (Sh41.2 million). The government currently has only one functional similar machine at the Kenya Petroleum Refineries Limited, which is used to test and certify all cooking gas imports through the Mombasa port. Kenya has for the last two months blocked more than 4,000 metric tonnes of cooking gas from entering the local market, including through the border town of Namanga. The ban has effectively made Mombasa the only entry route for LPG. The investigation into Tanzania gas imports revealed that some cylinders lacked the chemical additive ethyl mercaptan (rotten egg odour) that enables gas detection and appropriate response by users. The inquiry also revealed that Tanzania importers...

The 2017 First Quarter East Africa Trade Report issued by Maersk Line Eastern Africa - a member of A.P. Moller-Maersk - reveals that aggregate trade levels in the region have improved slightly since 2016, resulting in overall year-on-year growth of 1%. According to the company's MD, Steve Felder, in line with what was reported last year, there continues to be a noticeable disparity in performance between the two core trade corridors of East Africa. Container trade in the Northern Corridor, which serves Kenya, Uganda, South Sudan, and parts of Rwanda, expanded by 1%, whereas the Central Corridor, serving Tanzania, parts of Rwanda, Burundi, Zambia, Malawi and DRC, saw a contraction of 12%. “While conditions in the East Africa region have continued to be challenging due to political instability, ongoing macro-economic headwinds and drought conditions affecting certain countries, we’re seeing healthy competition between the two corridors, both fighting for position in terms of some of the ‘swing’ countries that could export or import cargo through either corridor, specifically Rwanda, Burundi, Uganda.” The Northern Corridor While the Northern Corridor (serving Kenya, Uganda, South Sudan, and parts of Rwanda) import market experienced year-on-year growth of 6% in the first quarter, it declined slightly (by 1%) from the last quarter of 2016, says Felder. “In Kenya, liquidity is still very tight, caused by last year’s interest rate capping on the bank lending rate. In the next quarter we are expecting to see a slowdown in the import market as we approach the Kenyan elections on 8...

The east African Securities Exchanges Association (EASEA) has commended the current developments on the regional infrastructure and tasked its technical committee to fast-track implementation of the capital markets infrastructure to provide new possibilities for investors seeking cross-border trade opportunities. This was during the EASEA 29th meeting in Nairobi, Kenya on Friday that brought together regional exchanges chiefs from Rwanda, Kenya, Tanzania and Uganda. Geoffrey Odundo, the CEO of the Nairobi Securities Exchange (NSE) that hosted the meeting, said it is crucial to strengthen the region’s financial markets to attract more investors and increase their liquidity. “An integrated market is critical for attracting foreign investors and increasing liquidity of the region’s market, and as a member of the association, CDSC therefore remains committed towards achieving this key milestone,” added the Central Depository and Settlement Corporation’s (CDSC) head of ICT, James Gikonyo. Speaking at the event, Pierre Celestin Rwabukumba, the Rwanda Stock Exchange (RSE) chief executive officer (CEO), said robust and integrated markets are key to achieve the goals of the East African region’s economic development. RSE automation Rwabukumba told the meeting that RSE was in the final stages of automation of its trading infrastructure, which will automatically be linked to the Central Securities Depository (CSD) and Real Time Gross Settlement System (RTGS) at the Central Bank of Rwanda. Last year, Rwanda launched a 10-year master plan for capital market development. The plan focuses on product development, technology and innovation, capacity building and investor education, savings mobilisation for the retail investors, and...