The 15-member West African regional bloc ECOWAS has moved closer to a customs union with the endorsement, by regional ministers of finance, of a new region wide tariff regime for West Africa, the ECOWAS Commission has announced.
The five band tariff regime, subject of ten years of internal negotiations driven by the technical committee of the Commissions of the ECOWAS and the eight member West African Economic and Monetary Union(UEMOA), was endorsed by the ministers at their meeting in Praia, Caper Verde, Wednesday, the Commission announced Thursday night.
The new Common External Tariff (CET) was modelled on the UEMOA tariff regime following the 2006 decision of Heads of State And Government of the region.
Some 5,899 tariff lines are covered under the new tariff regime, with tariff ranging between zero and 35 per cent for the 130 tariff lines that fall into the category of specific goods that contribute to the promotion of the regions economic development.
Under the new regime, five per cent duty is applicable for 2,146 tariff lines under the basic raw materials and capital goods category, 10 per cent for the 1,373 tariff lines that qualify as intermediate products category while 20 per cent duty is reserved for the 2,165 tariff lines that fall into the category of final consumer products.
The ministers agreed that the concerns expressed by some member states such as the treatment of raw sugar, and the request for special treatment for Cape Verde because of its location and vulnerabilities, should be addressed within the framework of trade defence measures.
They also agreed on the creation of a 1.5 per cent Community Integration Levy whose scope and operationalisation would be the subject of further regional reflection, as part of the mechanisms to enable the region cope with the challenges of implementation of the new tariff regime.
The levy will replace the two existing community levy regimes in the region, comprising the ECOWAS Community levy and the counterpart Community Solidarity levy for the UEMOA.
The replacement will help ensure uniformity in port charges in compliance with the requirements of the World Trade Organisation (WTO).
In order to ensure effective implementation of the new CET, the ministers urged the ECOWAS Commission to expedite the finalisation of the trade defence and other support measures.
The Commission was also directed to expedite the finalisation of the taxation of pharmaceutical products by striking a balance between the need to stimulate local production capacity and ensure the availability of drugs to meet the health needs of the region’s citizens.
Meanwhile, ECOWAS Commission President Kadre Desire Ouédraogo has described the new CET as the product of “years of intra community consultation that has passed various hurdles on the way to its fruition.”
The president also described the CET as “evidence of the desire of member states to compromise and “subordinate national interest to the regional interest”, and assured them that the Commission would take ” all necessary steps to enable them overcome the associated challenges.”
He said “without an ECOWAS CET, it would be difficult for the region to finalise its market access offer to the European Union” and assured that the region’s technical team will work “ceaselessly on the impact of the CET on the economies of member states so that the region can take necessary steps to mitigate its impact.”
He commended the experts who worked in developing the CET which constitutes an important step towards the establishment of a customs union for the region as well as Nigeria, the regions biggest and most diversified economy which has reduced its tariff to align it with the new customs rates in the CET.
Also commenting on the new CET, Ambassador Ouedraogo’s counterpart for the UEMOA, Hadjibou Soumare, who was represented by the organisations Commissioner for Trade, Mr Christophe Dabire, thanked the ECOWAS Commission for associating the UEMOA in the process of developing the new tariff regime.
He stressed the imperative of unity as the only ingredient for realising the objective of a common market as soon as possible, considering the limitations of the size and weight of their individual economies.