Great Changes In East Africa Tariff Policy: "Foreign Trade Drivers" Provide Professional Foreign Trade Operation Services.

The EAC partners have agreed to exempt clothing and textile manufacturers for three years of customs duties and VAT. The exemption covers products, fabrics and accessories that are not available locally.

This is to promote local production and reduce production costs.

This is one of the strategies to promote the development of the textile and leather industry and to slow down the import of second-hand clothing, footwear and other leather products from outside the region.

The East African community partners will now adopt a three year strategy (from 2017 -2019) to phase out the import of second-hand clothing and footwear.

To achieve this goal, they will increase the tax revenue of these products, require importers to obtain import licenses conforming to the EAC standard and realize the classified import of each package.

A proposal to promote the development of textile and leather industry suggests that in the next three years, EAC should increase the domestic supply quotas of all export processing zone enterprises on the basis of existing 20%.

In the unloading part, the enterprise should pay the necessary common external.

(commonexternaltariffs, CET), and the rules of origin of EAC must be strictly observed.

In addition, the policy also pointed out that the partners will establish a cotton wool bank based on Uganda cotton (14905, -155.00, -1.03%) buffer inventory to protect the linen demand of the spinning and downstream value-added industries.

All partners producing cotton velvet will set up a target that the local value-added of domestic lint will reach 30%, which will increase to 50% in five years.

The East African community has set four tariff structures for cotton, textiles and clothing to promote the production of veil and fabric.

The following are the following: the import tax of raw materials which is not available in this region is 0, the input of intermediate goods is 10%, the fabric is 25%, the ready-made garments are 40% or 5 US dollars / kg.

According to the document, relevant departments should examine the current common external tariffs and adopt the new rates mentioned above.

This recommendation follows the instructions of the head of state of the East African community last year.

The research on the development of leather industry also includes the establishment of relevant mechanisms to stop importing second-hand clothing, footwear and other leather products from outside of East Africa.

In order to carry out these two directives, the Secretariat conducted two studies, one is the value chain of cotton, textiles and clothing, the other is the value chain of leather and footwear.

The study found that the potential of cotton trade is huge, but it has not yet been developed.

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The East African community has the potential to become a major player in regional production and cotton, textile and clothing trade.

By 2025, the potential trade volume of the textile industry in the region will reach US $3 billion, while the total export volume of the region in 2013 will be US $340 million.

In addition, the study points out that the growth of secondhand clothing imports has hindered the development potential of the industry.

On the whole, imports of second-hand clothing and footwear grew in all the partners of the East African community, and the trade volume in 2015 amounted to US $151 million, accounting for 8% of global imports.

Secondhand clothing and footwear are mainly imported from the United States, Britain and Canada.

Imports of second-hand clothing and footwear in Africa reduced production by 40% and the employment rate by 50%.

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