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Panel 4 : Review the implementation of the protocols governing regional trade

BORDERLESS ALLIANCE 2018 CONFERENCE May 9 – 11, 2018 , Azalai Salam Hotel, Bamako, Mali. Panel 4 : Review the implementation of the protocols governing regional trade CONTRIBUTION FROM THE ECOWAS COMMISSION. Salifou TIEMTORE Director of Customs ECOWAS Commission. CONTENTS.

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Panel 4 : Review the implementation of the protocols governing regional trade

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  1. BORDERLESS ALLIANCE 2018 CONFERENCE May 9 – 11, 2018, Azalai Salam Hotel, Bamako, Mali Panel 4 : Review the implementation of the protocols governing regional trade CONTRIBUTION FROM THE ECOWAS COMMISSION Salifou TIEMTORE Director of Customs ECOWAS Commission

  2. CONTENTS • Introduction • Intracommunity trade liberalization • ECOWAS Trade Liberalization Scheme (ETLS) • Inter State Road Transit of Goods (ISRT) • Juxtaposed Inspection Posts (JIP) • Trade with third party countries • Common External Tariff (CET) • CET accompanying and trade defense measures • Trade facilitation and harmonization and simplification of Customs procedures and regulations • ECOWAS Customs regulations

  3. BACKGROUND AND JUSTIFICATION (1/2) • The objective of ECOWAS is to promote cooperation and regional integration, leading to the establishment of an Economic Union in West Africa (Article 3 of the ECOWAS Revised Treaty) • Therefore, ECOWAS must consecutively implement a Free Trade Area, a Customs Union and then a Common Market. • At the current stage, ECOWAS is on the threshold of the Customs Union with the adoption of the Common External Tariff (CET), the Customs Regulations and the harmonization of internal taxation systems. • Although the Customs Union is still underway, ECOWAS is currently working on the establishment of the Common Market with the preparation and adoption of the Common Trade Policy vis-à-vis third parties.

  4. BACKGROUND AND JUSTIFICATION (2/2) • Opportunity given by the 2018 Borderless Conference to review the Community texts governing regional trade through the following three (3) perspectives: • Liberalization of intra community trade • Trade with third countries • Trade facilitation and harmonization and simplification of Customs procedures and systems • Under each of these three perspectives, economic integration programs will be presented under the following headings: • List of adopted regulations • State of implementation • Benefits for the Private Sector • Reforms expected from Member States • Challenges of the Private Sector

  5. Liberalization of intra-Community trade (1/11) • ECOWAS Trade Liberalization Scheme (TLS) (1/4) • Legal basis • Protocol A/P1/1/03 of 31 January 2003, relating to the definition of the concept of products originating Member States of the Economic Community of West Africa and its implementation regulations • Objectives • The TLS is a tool aiming at the operationalization of the Free Trade Area (FTA) through the elimination of customs duties and taxes having equivalent effect to the importation of products recognized as originating in ECOWAS Member States. • Thus, agricultural, stockbreeding and traditional craftsmanship products are moved without justification of their origin.Original industrial products enjoy the benefits of TLS. An industrial product is said to be "originating" if it complies with one of the "Rules of Origin of ECOWAS" set out for this purpose; it circulates freely if accompanied by a Certificate of Origin. • State of implementation • All Member States have TLS-approved companies and products • From 1988 to 2017, ECOWAS approved a total of …. companies and …. products

  6. Liberalization of intra-Community trade (2/11) • ECOWAS Trade Liberalization Scheme (TLS)(2/4) • Benefits for the Private Sector • Access to a market of over 320 million consumers • Tariff preference for "originating" products of the ECOWAS region without payment of customs duties and other charges having equivalent effect on imports originating in the Community • Free movement of originating products in the 15 Member States • Improved competitiveness of national economies and thus of the entire region • Business opportunities • Attracting foreign direct investment: the ranking of ECOWAS Member States in Doing Business is visibly improving every year (Nigeria, Ghana, Senegal, Côte d’Ivoire, etc.) • Job Creation for Youth and Women

  7. Liberalization of intra-Community trade (3/11) • ECOWAS Trade Liberalization Scheme (TLS)(3/4) • Benefits for the Private Sector (continued and end) • Benefit from the simplest Preferential Trade Agreement (PTA) as no prerequisites for market access are required unlike other PTAs such as the US Growth and Opportunity Act (AGOA) and EU Everything But Arms (EBA) and Generalized System of Preferences (GSP) of the EU, etc. • Reforms expected from Member States • Taking appropriate measures to implement the Community provisions applicable to the TLS in an even and coherent manner • Compliancewith commitments made when adopting Community texts • Strengthen the functioning of the National Approvals Committee (NAC)

  8. Liberalization of intra-Community trade (4/11) • ECOWAS Trade Liberalization Scheme (TLS)(4/4) • Challenges of the Private Sector • Protection against illegal trade • Creation of conditions for the promotion of regional products • Finding investments to modernize production tools • High costs of means of production • AttractingForeign Direct Investment (FDI) to transform local raw materials through joint ventures, for example.

  9. Liberalization of intra-Community trade (5/11) • Inter State Road Transit of Goods (ISRT) (1/4) • Legal basis • Convention A/P4/5/82 of May 29, 1982 • Supplementary Convention A / SP.1 / 5/90 of 30 May 1990 establishing a Community guarantee mechanism for Inter-State transit of goods (ISRT) • Objectives • Convention A/P4/5/82 of May 29, 1982 • ISRT is defined as a regime that permits the transport by road from a Customs Office of a given Member State, to a Customs Office of another Member State, of goods in suspension of duties, taxes and prohibition. It is carried out under the cover of a single document (ISRT Log book) without cargo breakdown • Goods admitted to ISRT: Goods in transit • Goods excluded from ISRT: goods excluded as a general rule from the benefit of transit (Annex A) : (i) Weapons, explosives, narcotics and psychotropic substances, etc. (ii) Goods shipped under the Inter Border Transport (IBT) plan or through the Office Post • ISRT observes certain procedures and comply with specific obligations • ISRT indicates rules for transporters

  10. Liberalization of intra-Community trade (6/11) • Inter State Road Transit of Goods (ISRT) (1/4) • Supplementary Convention A/SP.1/05/90 of May 29, 1990 • Made of a chain of national guarantees to secure the potential duties, taxes and penalties incurred in the territory of Member States crossed during the Inter-State Road goods transit. • National guarantor is the institution or legal entity designated by each Member State to provide to the customs tenderers the guarantee required for the ECOWAS ISRT booklets; defined as the regime that allows the transport by road of a customs office of a given MS, to a customs office of another MS, goods suspended duty, taxes and prohibition. It takes place under the cover of a single document (ISRT booklet) without breaking the load • The guarantee is unique and covers transit operation from the Customs Office of Departure to the Customs Office of Destination • State of implementation • ISRT is not fully functional • The guarantee mechanism as provided for in the Convention could not be operational

  11. Liberalization of intra-Community trade (7/11) • Inter State Road Transit of Goods (ISRT) (2/4) • Benefits for the Private Sector • Transport smoothness: simplified transit procedures • Single guarantee provided for the entire transit operation • Reduction of border and road controls • Reformsexpected from Member States • Accompanying the private sector for the renewal of its fleet • Modernization of road infrastructures • Reform and modernization of customs administrations

  12. Liberalization of intra-Community trade (8/11) • Inter State Road Transit of Goods (ISRT)(3/4) • Challenges of the Private Sector • Renewal of vehicles fleet • Compliance with the criterion of approval of means of transport

  13. Liberalization of intra-Community trade (9/11) • Juxtaposed Inspection Posts (JIP) (1/4) • Legal basis • Supplementary Act A/SA.1/07/13 • Objectives • Improving trade through better movement of persons, goods and services in the Community and with the surrounding regions • State of implementation • JIP built and fonctional • Cinkansé (Burkina/Togo) • JIP completed • Seme (Nigeria/Benin) • Noepe (Togo/Ghana) • Malanville (Benin/Niger)

  14. Liberalization of intra-Community trade (10/11) • Juxtaposed Inspection Posts (JIP) (2/4) • Benefits for the private sector • Simultaneous border controls • Harmonization of opening and closing hours at borders • Reduced cost and time of border crossing • Simplification of procedures and reduction of documents and formalities • Reforms expected from Member States • Modernization of road infrastructures • Construction and equipment of JIPs • Providing adequate staff for JIPs • Functioning of JIPs

  15. Liberalization of intra-Community trade (11/11) • Juxtaposed Inspection Posts (JIP) (3/4) • Challenges of the Private Sector • None

  16. RELATIONS WITH THIRD COUNTRIES(1/11) • Common External Tariff (CET) (1/5) • Legal basis • Decision A/DEC.17/01/06 of 12 January 2006 • Objectives • Instrument that subjects goods from third countries to ECOWAS to payment of duties and taxes, regardless of their point of entry into ECOWAS. • Products structured into 5 catégories : 0%, 5%, 10%. 20% and 35% • The harmonization of customs duties and charges having equivalent effect at the borders of ECOWAS Member States has major positive objectives: • Deepen economic integration: customs union; platform for building the common trade policy and regional trade negotiations such as the TFA • Boost regional production capacity and investment • Strengthen the regional market

  17. RELATIONS WITH THIRD COUNTRIES(2/11) • Common External Tariff (CET) (2/5) • State of implementation • The CET entered into force in the member States as of January 1st 2015. • 13 membersstates currently implement the ECOWAS CET (Benin, Burkina Faso, Côte d'Ivoire, The Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Senegal and Togo) • Only Cape Verde and Sierra Leone have not begun the implementation of CET • Côte d’Ivoire, Nigeria, Ghana, Senegal and Burkina Faso implement additional protection measures; • Among these thirteen (13) Member states implementing the ECOWAS CET (version SH 2012), only four (4) implement the ECOWAS CET version SH 2017 : Benin, Burkina Faso, Guinea and Togo

  18. RELATIONS WITH THIRD COUNTRIES (3/11) • Common External Tariff (CET)(3/5) • Benefits for the Private Sector • The CET has been established to serve as a means of protecting companies with export potential by: • strengthening them to cope with foreign competition; • securing their access to cheaper raw materials and inputs for production in the region • Some sectors are protected under the CET • A rate of 35% has been applied to protect companies in the agribusiness sector, the textile sector, etc. (130 tariff lines); • A rate of 20% has been applied to finished agri-food products (2,165 tariff lines) - For example: juice • Although free practice is not yet established, a single tariff is applied throughout the West African region • Giving a better visibility of the market • The TEC is « PRO INDUSTRY» • Low rate for imported raw materials • High tax for imported finished products

  19. RELATIONS WITH THIRD COUNTRIES (4/11) • Common External Tariff (CET)(4/5) • Benefits for the Private Sector • Increased production capacity in the Community • With the CET and the Customs Regulations, ECOWAS has the necessary instruments to enter into Free Trade Agreements with any country in the world • Reforms expected from member states • Take appropriate measures to implement the CET with the latest version of the HS • Comply with commitments made by adopting Community texts

  20. RELATIONS WITH THIRD COUNTRIES (5/11) • Common External Tariff (CET)(5/5) • Challenges of the Private Sector • Implementing programs to improve business competitiveness • Improving the quality of companies' products by taking them up to standard • Protection against illegal trade • Creation of conditions for the promotion of products of the region • Find investments to modernize production tools • High costs of production factors

  21. TRADE WITH THIRD COUNTRIES (6/11) • CET accompanying and trade defense measures (1/6) • Legal basis • Regulation C/REG.2/06/13 of 21 June2013 determining the customs value of goods within ECOWAS • Regulation C / REG.3 / 06/13 of 21 June 2013 defining the procedure for inputs subject to higher taxes than finished products • Regulation C/REG.4/06/13 of 21 June 2013 on safeguard measures • Regulation C/REG.5/06/13 of 21 June 2013 on the imposition of compensating duties • Regulation C/REG.6/06/13 of 21 June 2013 on antidumping measures • Regulation C/REG.1/09/13 of 30 September 2013 on complementary protection measures • Regulation C/REG.16/12/16 of 16 December 2016, amending Articles 1, 2, 3. 4, 5 and 6 of Regulation C/REG.1/09/13 of 30 September 2013 • Regulation C/REG.18/12/16 of 16 December 2016 amending Regulation C/REG.1/06/13 of 21 June 2013 defining the list of goods in the ECOWAS TSN

  22. TRADE WITH THIRD COUNTRIES (7/11) • CET accompanying and trade defense measures(2/6) • Objectives • Customs Value • is to ensure the implementation of a uniform and identical assessment system in all Member States in relation to the ad valorem nature of the ECOWAS CET. It is based on the WCO Customs Valuation Agreement. • Inputs subject to higher taxes than finished products • Describes the procedure to be followed to prevent inputs in zero category goods from being taxed more heavily than finished products • Safeguard measures • The purpose of the measures is to remedy a damage or a threat to a production sector in the Community resulting from a massive and uncontrolled increase in imports • Imposition of compensating duties • Aims at curing the damage or risk of damage to an industry in the Community resulting from imports of subsidized products

  23. TRADE WITH THIRD COUNTRIES (8/11) • CET accompanying and trade defense measures(3/6) • Objectives • Antidumping measures • The objective is to remedy any damage or threat to production sectors in the Community resulting from dumped imports. It is intended to mitigate the effects of a dumped product released for consumption in the Community which causes or threatens to cause injury to an industry or which delays its establishment in the Community • Complementary protection measures • Regulation C / REG.1 / 09/13 introduces some flexibility and provides complementary protection to Community industries in the initial phase of application of the CET. These measures are intended to prepare, for a period of five (5) years, the transition to the uniform ECOWAS CET. • Regulation C / REG.16 / 12/16 was taken to (i) correct the differences of interpretation of certain aspects of Regulation C / REG.1 / 09/13 as well as the deficiencies and gaps, and (ii) improve the wording of some provisions

  24. TRADE WITH THIRD COUNTRIES (9/11) • CET accompanying and trade defense measures (4/6) • Objectives • Composition of the categories of goods comprising the ECOWAS TSN • Adopting amendments of thr 2017 version 2017 of the Harmonized System of Description and Coding of goods. • State of implementation • Côte d’Ivoire, Nigeria, Ghana, Senegal and Burkina Faso implement additional protection measures • Among the thirteen (13) Member states implementing the ECOWAS CET (version HS 2012), only four (4) implement the ECOWAS CET Version HS 2017 : Benin, Burkina Faso, Guinea and Togo

  25. TRADE WITH THIRD COUNTRIES (10/11) • CET accompanying and trade defense measures (5/6) • Benefits for the Private Sector • Possibility of correcting trade distortions that could jeopardize the production of certain goods in the region when tariffs as they appear in the CET are not always sufficient to ensure optimal protection for production sectors

  26. TRADE WITH THIRD COUNTRIES (11/11) • CET accompanying and trade defense measures (6/6) • Reforms expected from member states • Capacity building of relevant technical administrative structures • Strengthening the national statistical system • Challenges of the Private Sector • Taking appropriate measures to implement the Community provisions applicable to the TLS in an even and coherent manner • Compliance with commitments made with the adoption of Community texts • Collaboration with relevant technical administrative structures

  27. Trade facilitation and harmonization and simplification of Customs procedures and regulations (1/7) • ECOWAS Customs regulations (1/8) • Legal basis • Supplementary Act A/SA.2/12/17 of 16 December 2017 adopting Customs Regulations • Objectives • Covers the general rules and procedures for the implementation of tariff measures and other common policy measures provided for at Community level in the context of trade in goods and movements of persons between the Community and third countries, taking into account the requirements of said common policies • Sets the pace for harmonized and coordinated border management • Ensures uniform and consistent implementation of regional rules throughout the Community customs area

  28. Trade facilitation and harmonization and simplification of Customs procedures and regulations (2/7) • ECOWAS Customs regulations(2/8) • Objectives • Takes into account the new requirements of international trade and the evolution of customs technology • Inspired by the Revised Kyoto Convention (RKC) and the WTO Agreement on Trade Facilitation (TFA) • The tables of compliance established show a compliance rate of 95% with the provisions of the RKC (General Annex) and 90% with the measures of the TFA • State of implementation • Is binding on all member states • Benefits for the Private Sector • Creation of an environment favorable to the competitiveness of companies, supporting their economic and commercial expansion

  29. Trade facilitation and harmonization and simplification of Customs procedures and regulations (3/7) • ECOWAS Customs regulations (3/8) • Benefits for the private sector • Provides economic and commercial players with optimal conditions for fulfilling their regulatory customs obligations by speeding up and facilitating formalities and procedures • Granting of the status of approved economic operators in: • Comprehensive use of simplification • Benefit from facilitation in security and safety and a reduction of physical and documentary controls • Benefit from the mutual recognition at Community level of the status of approved economic operator • Predictability - Provision of advance rulings by Customs Administrations, at the request of interested person, on specific aspects of goods or customs legislation, in preparation for import or export

  30. Trade facilitation and harmonization and simplification of Customs procedures and regulations (4/7) • ECOWAS Customs regulations (4/8) • Benefits for the private sector • Customs administrations to publish customs regulations by all means • obligation to consult partners on draft amendments as well as to provide binding information upon request • Facilitation of legal trade and the fight against fraud that require simple, fast and standardized customs procedures and formalities • Increased use of information and communication technologies, which should be accompanied by a harmonized and consistent application of customs controls by the Member States, in order to ensure the same level throughout the Community

  31. Trade facilitation and harmonization and simplification of Customs procedures and regulations (5/7) • ECOWAS Customs regulations (5/8) • Benefits for the private sector • Benefit from customs procedures designed to promote the development of certain economic activities and strengthen the competitive capacity of companies in the regional market, especially with a view to opening up within the framework of the TFA, by bringing into play variable mechanisms depending on the activity considered • Facilitating trade and thus improving the business climate in the Region to attract more direct foreign investments

  32. Trade facilitation and harmonization and simplification of Customs procedures and regulations (6/7) • ECOWAS Customs regulations (6/8) • Benefits for the private sector • At the same point of crossing a common border the relevant customs administrations: • Harmonize the hours of operation as well as the competence of these offices; • Wherever possible, perform joint or single controls; • Collaborate whenever possible, to establish a juxtaposed inspection post to facilitate common controls

  33. Trade facilitation and harmonization and simplification of Customs procedures and regulations (7/7) • ECOWAS Customs regulations (7/8) • Reforms expected from member states • Strengthening the partnership between the Customs Administration and the private sector • Taking appropriate measures to implement the Community texts applicable to trade, in an even and coherent manner • Compliance with commitments made when adopting Community texts

  34. Trade facilitation and harmonization and simplification of Customs procedures and regulations (7/7) • ECOWAS Customs regulations (8/8) • Challenges of the Private sector • Appropriation of the ECOWAS Customs regulations • Implementation of a strategy to enjoy the status of approved economic operator • Partnership, Service Charter between Customs Administrations and the Private Sector

  35. Merci! Thank you! Obrigado!

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