NEVILLE PETERSON LLP - ids.trade · NEVILLE PETERSON LLP ... suggests that the requested exemption...

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

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.


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.


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.


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.


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.


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.


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.


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.


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.

ATTACHMENT A

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.

ATTACHMENT B

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.

Reuters

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8 hours ago

Ethiopia must brew a solution as its coffee comes under threat - Report

20/06-11:10

Namibia unveils world's largest diamond exploration shiJ;!

16/06 - 08:36

6/?.1117. 1:49 PM

ATTACHMENT C

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


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


75% More

100% More

Greater than 100%

3 I 17

0.00%

0.00%

0.00%

0

0

0

20


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


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


75% More

100% More

Greater than 100%

6.25%

0.00%

0.00%

7 I 17

0

0

16


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


75% More

100% More

Greater than 100%

Total

9 / 17

0.00%

0.00%

0.00%

0

0

0

20


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


100% More

Greater than 100%

Total

11 I 17

0.00%

0.00%

0

0

20


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


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


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


100% More

Greater than 1 00%

Total

0.00%

0.00%

15 I 17

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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.

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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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