The US suspension of duty-free access to Ethiopian exports may prove to be beneficial for Kenyan textile and apparel sector.
· The US ban is a fallout of the ongoing turmoil in the Tigray region.
· US authorities cited gross violation of internationally recognized human rights by Ethiopia which is one of the eligibility criteria for the African Growth and Opportunity Act (Agoa).
The US suspension of duty-free access to Ethiopian exports may prove to be beneficial for Kenyan textile and apparel sector. The US ban is a fallout of the ongoing turmoil in the Tigray region. US authorities cited gross violation of internationally recognized human rights by Ethiopia which is one of the eligibility criteria for the African Growth and Opportunity Act (Agoa). The Tigrayan war has destabilised Ethiopia, which was seen as a promising frontier for investment.
US President Joe Biden signed an executive order signed last month slapping harsh sanctions on all sides involved in the war in the Tigray region — including the governments of Ethiopia and Eritrea after several attempts to pressurise the warring factions which did not yield any result. The sanctions will be imposed by the US Treasury Department if steps are not taken soon to end the 10 months of fighting.
Closing the window for Ethiopia according to analysts will open a window for more than 6,000 textile and apparel product lines for Kenya. Almost 90 percent of the Ethiopian exports under AGOA were textiles and apparel. Ethiopia last year according to US data, exported about Sh26.3 billion worth of goods duty-free to the US under Agoa while Kenya exported goods worth Sh42.2 billion in 2020. Both Ethiopia and Kenya have spent billions constructing a dozen industrial parks and related infrastructure in the race for the US export market.
