America First and Africa Second...hand

America First and Africa second …hand

Africa has never been high on the US agenda of any president and even less for the current incumbent Donald Trump. African affairs are as low on his agenda as one can conceivably imagine. Not knowing the name of ‘Nambia’ in September 2017 as he called it twice at a meeting with AU members and referring to African states as ‘shithole countries’(which he denied) this year is a clear indication of the complete lack of knowledge or care for anything African by Trump.

 

But when we look at trade it is where we see how much will be changed by President Trump’s policy of ‘America first’. President Clinton spent years having the African Growth and Opportunity Act passed through the US Congress and will continue to 2025. This gave duty free market access to goods coming from African countries that the US liked. While it is largely meaningless for most African exporters of minerals and oil which face zero tariffs but it has been of great use to some countries have sought to develop industrial capacity for exports

Trump has used the Clinton AGOA legacy to show his ‘America first’ teeth with the smallest of African issues and countries. In 2015 the five leaders of the East African Community ( Rwanda Burundi Uganda Tanzania and Kenya )  agreed to phase out the imports  of  second hand clothing (called mitumba in Swahili) by 2019. Almost immediately the US exporters started to lobby the government that this was a trade barrier and they should therefore be excluded from exporting garments to the US. For Kenya this was going to hurt and four of the five EAC members caved in but Rwanda refused having no significant garment exports to the USA. In 2016 Rwanda raised import duties on second hand clothing from $0,20 per kg to $2,50 per kg before  eventually phasing it out.  Based on 2013 figures the US exported a mere US650 million of second hand clothes to the African continent but it was the largest supplier, more than EU as a whole. The average American disposes of some 35 kg of clothing per year and so it is either dump it in landfills or sell it to the poor.

In June this year the Trump administration struck back at Rwanda’s garment and textile exports by excluding them from the list of goods that benefits from AGOA access. Rwanda had imposed such high taxes on import of US second hand clothing which has become a source of  diversification of US trade with Africa. Immediately the government of Paul Kagame said it would pay the taxes of any Rwandan exporter who was hit by the US policy. The export of second hand clothing has developed into one of the most destructive acts of western ‘charity’ to Africa. The second hand US and European clothes commonly sold in African markets are so cheap that even the Chinese traders complain that they are unable to sell their relatively low cost new clothes competitively because of the second hand sales of the US and the EU. That is in part the issue. For African low income consumers the second hand clothes have been a genuine blessing providing cheap affordable and often high quality clothes. For African producers of textiles and clothing second hand clothes have been the death knell of what have often been decades, and in some countries like Ghana, centuries old textile industries.

It is argued that the fight over Rwanda’s second hand clothing market is a proxy war between the US and China. In the absence of massive tariffs or complete bans and given supplies of low cost clothing from China countries like landlocked Rwanda will not be able to produce textiles and clothing competitively because of its small domestic market and its distance and isolation from Mombassa harbor. Thus for the USA, the Rwandan tariffs and eventual ban  are merely a mechanism that substitute Chinese clothes for low cost US and EU second hand clothing.

The garment trade is small fry compared to the bigger and much more important part of second-hand Africa, the second hand motor vehicle trade. For the USA exporting second hand cars and clothes matters as it is a high return way of dealing with what would otherwise be considered waste. West African markets are also a place where criminals have frequently disposed of stolen US vehicles and hence part of the trade must be seen simply as a way of laundering the proceeds of crime. The biggest market for US second hand cars is right hand drive Nigeria and its neighboring entrepot, Benin which is by far the biggest market for second hand cars on the continent. These cars are then on-sold from Benin into the landlocked countries to the north.  In 2013 the USA exported some 860,000 second hand cars and the biggest market was right hand drive Nigeria and Benin. Increasingly African countries are putting ever greater restrictions on the importation of these vehicles. At present only 4 have an out-right ban on imports South Africa, Egypt, Morocco and Sudan but  more and more countries are imposing age restrictions. 25  African countries place a maximum age limit on imports, 10 countries ban imports over 5 and 6 countries ban imports over 10 years old. For the US the second hand car market matters and is worth $6 billion per annum in exports in  2013. Africa is by far the largest market for these American clunkers. Keeping Africa open for US second hand car exports matters to US exporters as it does to American car thieves.

But the most interesting question is not related to the second hand trade in clothes or cars. The most interesting question is how do we get from four only countries banning second hand cars and Paul Kagame being the only African leader who has the guts to stand up to the troglodyte in the White House to a situation the entire continent does likewise so that we have the economies of scale so Africa can develop a truly competitive pan-African automobile industry and competitive pan-African garment industries. Only when Africa has leaders of quality, foresight and the courage to stand up to the likes of Trump and put ‘Africa first’ will we ever graduate from the status of the world’s ‘hewers of wood and drawers of water’ who wear American hand-me-downs and drive American, European and Japanese clunkers. These leaders are very few in number and this is the real tragedy of second hand Africa.

These are the views of Professor Roman Grynberg and not necessarily those of UNAM where he is employed.

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