Business

Museveni Firm on Mivumba Ban amid US Embargo Threats

President Yoweri Museveni shares a light moment with United States Under Secretary for Political Affairs, Thomas A. Shannon during a meeting in New York City yesterday Sept 20th. PPU Photo

President Yoweri Museveni has maintained his position on banning importation of secondhand clothes to Uganda, arguing that the country is trying to develop its textile and apparel sector.

“Second hand clothes are killing the textile and apparel sector in Uganda. Industrialization of this sector is not only good for Uganda but for America as well. As partners the volume of trade grows and creates more incomes,” he said.

Museveni made the remarks Wednesday during a meeting with the United States Undersecretary for Political Affairs Thomas A. Shannon, at Uganda House in New York City.

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He is in New York to attend the 72nd session of the United Nations General Assembly.

The president’s comments comes amidst US Trade Representative (USTR) efforts to review trade benefits to Uganda, Rwanda and Tanzania under the African Growth and Opportunity Act (AGOA) after a complaint by a US business association – Secondary Materials and Recycled Textiles Association (Smart) –  about an East African ban on imports of used clothing.

Smart reasons that the proposed ban of importation of used clothes by 2019 violates Agoa’s principles of eliminating “barriers to United States trade and investment”, and could impose significant hardship on the US used-clothing industry.

Agoa also provides for duty-free entry of goods into the US from designated sub-Saharan African countries, including the EAC partner states, and it applies to both textiles and non-textile goods.

President Donald Trump, in his “American First” Policy has always vowed to oppose any trade initiative that he deems injurious to American interests.

To start on the initiative, Uganda, Rwanda and Tanzania have already raised taxes for used clothes, while offering incentives to manufactures to invest in their local textile sectors starting this financial year 2017/18.

Uganda increased the environmental levy imposed on used clothes from 15 % to 20 % of the cost and freight insurance (CIF) value in some taxes during the post-election budget.

Kenya however, withdrew from the move, supposedly to save its U.S. market for new clothes produced locally in the Economic Processing Zones.

Some analysts have also suggested that the plan might complicate the region’s trade arrangements with leading, suggesting it could increase the cost of clothes in countries where the majority of the population is poor and lead to the import of new cheap clothes to out-compete the very industries the regional governments seek to protect.

It could as well lead to increasing smuggling of the banned items.

Horn of Africa

On the security situation in the Horn, including in South Sudan, Somalia, Burundi and DR Congo, the President Museveni said from his assessment, conflicts stem mainly from focusing on peoples identities rather than interests and in other cases the lack of institutions and ideology.

President Museveni said that while Uganda and the United States face many challenges that they are collaborating on together including peace and security in South Sudan, Somalia, DR Congo, they will intensify their efforts for durable solutions.

President  Museveni meeting  United States Under Secretary for Political Affairs, Thomas A. Shannon and his delegation. This was on the sidelines of the UN General Assembly in New York City yesterday Sept 20, 2017.

President Museveni meeting United States Under Secretary for Political Affairs, Thomas A. Shannon and his delegation. This was on the sidelines of the UN General Assembly in New York City yesterday Sept 20, 2017.

Museveni told Shannon that the United States needs to balance these efforts by paying attention to other practical areas such as investments and trade that contribute to peace in the region.

Museveni said he supported President’s Trumps statement to the United Nations for leaders to put their individual countries first, adding that initially the US wasted a lot of time on the wrong things instead of pushing for mutual benefits in trade and investments.

“The World Bank had policies that were not pro-development. They were not interested in infrastructure development such as in the energy sector and roads. Without electricity for example, how can you industrialize?”

Shannon appreciated Museveni’s call for trade and investments as part of finding solutions to the conflicts in the region and thanked him and the people of Uganda for opening their doors to refugees.

“We appreciate Uganda’s policy on refugees. We thank you and your government for taking care of them and for allowing them to produce their own food,” he said.

The meeting was attended by Foreign Affairs Minister Sam Kutesa, State Minister for Foreign Affairs Henry Oryem Okello and Uganda’s Chief of Defence Forces Gen. David Muhoozi.

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