Used Clothing Trade Surge: Who foots the bill for environmental purge?

Figure 1: Total Trade in Used Clothing (In $ mn)

Source: ITC Trade Map

Leading exporters of used clothing

Apart from China, all the major countries that export used clothes are net apparel importers, with the United States at the forefront. According to the ITC Trade Map, the share of the US is the highest with the total exports being 16.6 per cent of the total world exports, followed by the other countries. The net importers are mostly from the Central American region, Asia, and African countries. Specifically in Africa, there is an entire economy created based on the imported used clothes from the developed countries. Countries like Kenya, the United Arab Emirates, and Pakistan are the top importers in the world of second-hand clothes. With the second-hand clothes trade estimated to increase in value according to various research estimates, it is a long way to go before the market for such clothing comes under the ambit of policy regulation. With behavioural factors involved in the consumption of second-hand apparel, it is imperative to ensure the policies are in place to promote the exports of second-hand apparel which are of consumable quality.

Compulsive trade and the blade of FTAs

African countries like Kenya, Benin, Mozambique, and Ghana are some of the major importers of second-hand clothes and therefore, for years, their own textile industries did not have a chance to prosper. The textile industry is considered the first step towards industrialisation and growth – the opportunity itself is denied to the emerging entrepreneurs in the region. Specifically African countries face the brunt of the second-hand economy where the domestic industries do not get the revenue as expected.

Countries like Benin and Kenya had in the past imposed a ban on the imports of second-hand clothes, only to be dragged back by the countries like the US with the threat of excluding them from AGOA¹. This led to a lot of African countries taking a step back from adopting protectionist policies which can possibly benefit the industries in the long run. The African countries are also a major market for the European countries to export their used clothes, followed by China.

Figure 2: Exports to Kenya by selected countries (In $ mn)

Source: ITC Trade Map

Due to the threat of getting excluded from the FTAs and inviting further trade restrictions, countries like Kenya are planning to make the ‘mitumba²’ less competitive, by giving greater advantages in terms of policy benefits to the domestic textile industry. Kenya has a huge proportion of the population preferring the ‘mitumba’ over the apparel made in the country. The textile industry is one of the major laggards in the country and the mitumba economy is responsible for the same. With countries like South Africa already running ahead with the manufacturing sector booming; countries like Benin and Kenya are attempting to follow the lead by providing the local textile industry more benefits and making the mitumba less competitive.

Sustainable or an invitation to environmental havoc?

While the exports of second-hand apparel to different countries is considered a step towards encouraging circular economy, the practice is questionable as of today. According to a report from ABC news Australia, Ghana – another country that majorly imports used clothes – witnesses almost 40 per cent of the imported clothes ending up in landfills as they are deemed unfit for re-use. The importers spend a huge amount of fortune on importing the clothes but due to spoiled clothes included in the consignment, they must throw almost 60 per cent of the imports into the landfill, according to an EEA report.

Developed world-centric policy

European countries boast about their efforts to boost the circular economy. However, the policy consideration is highly lopsided. Even though the used clothes are exported to the African and Asian countries for re-use, the traceability of what happens further with the clothes is null. Transparency, which is another major factor in sustainability and circularity, is totally absent from the value chain. The US often uses its bargaining power to export second-hand goods, impacting the economic growth and environment of importing countries. In Asia, Pakistan faces similar challenges with the influx of textile waste and used clothes from the EU. This situation, compounded by inadequate infrastructure, is causing significant environmental concerns. Despite the EU’s efforts to regulate second-hand clothing exports, the trend of shipping used clothes to the global south shows no signs of abating.

Pandora’s Box of Problems

Regulating the used clothing industry and its value chain remains a challenge due to political and socio-economic factors in both importing and exporting countries. African countries impose tariffs ranging from 20 to 40 per cent on used clothing imports, while in Asia, tariffs are between 3 to 10 per cent. Despite these tariffs, imports continue, providing income for many Least Developed Countries (LDCs), but at a significant cost. The lack of a specific Harmonized System (HS) code to classify the condition of products exported by developed nations like the US and the UK leads to increased landfill waste, especially without proper sorting.

Therefore, there is an emerging need for implementing policies like ‘polluter pays’ and the ‘extended producers’ responsibility’ – especially for the exporting countries who have an approach of being not liable to answer once the apparel is exported to the other countries.

Despite the absence of global policies ensuring the quality, cleanliness, and sorting of imported used clothes, India has implemented its own mandate for companies to adhere to such standards. While various policies exist solely to ensure the fumigation of clothing consignments, there is still no global policy to prevent the dumping of used apparel in African and Asian countries.

Notes:

^1:   AGOA: African Growth and Opportunity act is a legislation passed by the US congress in 2000 to ensure stability in the US – Sub Saharan Africa trade relations which gives duty free access to products exported by Sub-Saharan countries into the US.

^2:  Mitumba: A term used in Kenya for the used apparel.

ALCHEMPro News Desk (MI WE)