With the announcement of the new additional list of goods that will enter the US duty free under the African Growth and Opportunity Act (AGOA) scheme, entrepreneurs have been urged to take full advantage to enhance Rwandaâ€™s export volumes and revenue.
Francois Kanimba, the Minister for Trade and Industry, said that this development should act as an incentive for producers, particularly small-and-medium enterprises (SMEs) to increase production to benefit fully from the AGOA arrangement.
US President Barrack Obama issued a proclamation on June 30, implementing the results of the 2015/16 Generalised System of Preferences (GSP) annual product review, under which 27 travel and luggage products were added on the list of goods from least-developed beneficiary developing countries and AGOA allowed to enter the US duty free. The new arrangement means travel goods, textile and luggage products from Rwanda and other beneficiary countries will enter the US duty free under GSP.
Of the 27 travel products 11 are already eligible under AGOA scheme; and these are mainly leather and plastic products.
The list of qualifying products will help Rwanda export more goods to the US. Kanimba urged the private sector players to create linkages with US buyers to start supplying these products.
Speaking at the event, Erica Barks, the US ambassador to Rwanda, said that the proclamation means that AGOA beneficiary states can export 16 more products, all considered textile goods, under GSP.
Barks said that the GSP annual review is always subject to the regular, petition-driven review process. Rwanda is one of the countries that asked for the products to be added on the duty free list under AGOA.
Countries submit goods they want to be granted duty-free entry status to the office of the US trade representative, after which the GSP annual product review announces qualifying products.
The added products include leather handbags, cotton handbags, moisture management fabrics handbags, leather totes, cotton totes, linen/ramie totes and moisture management fabric totes, among others.
Rwandaâ€™s exports to the US have grown from $21.9 million in 2010 to $46.8 million in 2015. Equally, exports under the AGOA scheme have increased from about $67,000 in 2009 to more than $400,000 last year.
However, Kanimba is optimistic that with the expanded list, the AGAO scheme could fetch the country about $5 million in the next two years.
The new additions will give the local companies a cost advantage and boost production. The addition of these products will also encourage more companies to export to the US. It also gives a competitive advantage to companies in this sector in Rwanda.
Rwanda has dynamic firms producing fashion accessories, travel products and unique handbags, that will greatly benefit from the expanded list.
GSP is a 40-year-old trade preference programme under which the United States provides duty-free treatment to many imports from beneficiary developing countries and additional products for least-developed beneficiary developing countries.
Under the GSP programme, about 5,000 products from 122 developing countries and territories, including 43 least-developed nations, are eligible to enter the US market duty-free.
Nearly 1,500 of these products are reserved for duty-free treatment for least-developed beneficiary developing counties only.
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