Title: Over view of Non Tariff Barriers elimination process in COMESA Workshop for the African Group Countries on: WTO NAMA Negotiations on Non-Tariff Barriers (NTBs) 12
1 Over view of Non Tariff Barriers
elimination process in COMESA Workshop for the
African Group Countries on WTO NAMA Negotiations
on Non-Tariff Barriers (NTBs) 12 14 April
2010Nairobi, Kenya
2Introduction
- NTBs have become an important trade policy issue
- today because
- They are capable of restricting trade,
- They are unpredictable and persistent
- Influencing trade patterns and the free movement
of goods and services within and across
countries. - Regional experience in COMESA is suggestive of
the fact - that as tariffs have been lowered through PTA,
FTA and - now Customs Union demands for protectionism have
- induced new NTBS. This is evidenced through the
- number of tariff lines affected by NTBS since
October, - 2000.
3Guiding Principles for removal of Non-Tariff
Barriers
- The FTA and CU calls for removal of NTBs
- But some NTMs exist for legitimate reasons such
as - consumer protection,
- public safety,
- Revenue loss, Competitiveness issues
- They become genuine NTBs when (not notified),
implemented in such a manner as to - unnecessarily add to costs or
- inhibit trade,
- are discriminatory or
- are applied in an illegitimate manner.
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5Background to NTBs in COMESA
- Recent impact study within COMESA on NTBs.
- Aim was to survey and document the real impact of
NTBs on intra-COMESA trade. Such impact can be
measured by actual expenses and time loss to the
business community. - We found
- NTBs have become considerably less identifiable
as trade liberalisation and tariff reform have
been implemented over the last decade. - In the past, state intervention through price
controls, foreign currency controls, import
licensing and state marketing meant that such
barriers to trade were obvious to all . - Today most of these controls have been lifted
with the result that the NTBs tend to be more
arbitrary, qualitative and non-transparent and
lead to a reduction in intra-regional trade.
6Focus of Impact Study
- The study focused on 4 main NTB areas
- Restrictive trading practices
- Application of the Rules of Origin
- Clearance of goods documentation
- Transit traffic/ trucking issues
7Top Four NTBs by Category Top Four NTBs by Category
Restrictive trade practices Restrictive trade practices
1 Corruption
2 Permits and licenses
3 Exchange controls
4 Non-automatic licensing
COMESA and EAC RoO COMESA and EAC RoO
1 Corruption
2 Arbitrary tariff application
3 Arbitrary product classification
4 Non-acceptance of CoO
Clearance of goods documentation Clearance of goods documentation
1 Lengthy clearance processes
2 Lengthy classification and valuation of imports processes
3 Arbitrary documentation requirements
4 Corruption
Transit traffic/trucking issues Transit traffic/trucking issues
1 Variable documentation requirements
2 Inefficient port operations
3 Variable weighbridge checks
4 Corruption
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9Study findings
- 52 indicated that intra-COMESA trading
conditions had got better over last 5 years - But NTBs still added gt5 to landed cost of goods
for gt50 of respondents and for some gt20. - On average 20 of annual shipments faced some
form of NTBs. For some companies it was 100. - Average direct additional cost of NTBs per
shipment was US3,500 excluding bribes! - It was often taking an average of 6 days to clear
goods through Customs. - Average cost of border delays (where experienced)
was 11 of landed cost - Companies spend approx US145,000 per month on
employees time and accommodation costs due to
NTBs and delays.
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12Efforts for elimination of NTBS
- Efforts for the elimination of NTBS can be
categorized - into four main thematic areas
- Policy
- Institutional arrangements / Mechanisms
- Modalities
- Monitoring and evaluation
13Efforts for elimination of NTBS
- Efforts for the elimination of NTBs can be
categorized into - Four main thematic areas
- Policy
- (Treaty, Protocols, Council)
- Institutional arrangements / Mechanisms
- (NTBs Enquiry Points, National Monitoring
committees, - Regional level, Bilateral initiatives)
- Modalities
- (Information on technical regulations, STDS, SPS,
clear - guidelines to businesses, common form, Road Map-
- elimination matrix, Online reporting system,
country - missions)
- Monitoring and evaluation
- (TCM, NEP, NMC)
14On line NTBS reporting mechanism
- The online NTBS reporting system is an internet
- based tool developed by COMESA Secretariat
- through support of RTFP for use by stakeholders
in - the member states to report NTBS as well as
- monitor the processes of elimination
- website ntb.africonnect.com.
- The system also serves as a repository of all the
- reported NTBS as well as the plethora of national
- NTBS, which are impeding businesses from
- capturing the benefits of regional integration
- It has been adopted by all SADC and EAC
15Inter regional strategy for NTBS
- NTBS have had a negative impact on the trade
- expansion efforts of the regional groupings
(SADC, - EAC and COMESA), Modalities for a common,
- comprehensive and holistic approach for the
elimination - of NTBs in COMESA, SADC and EAC is appropriate.
- Towards this end the tripartite meetings of
- SADC/COMESA/EAC are working towards the
- harmonization of their NTB strategies through a
unified - approach involving cooperation activities in
respect to
16Focal areas (Tripartite NTBS harmonization)
- Definition of NTBS
- Operational modalities for National focal Points
(NEPS) TORS and responsibilities. - Reporting and elimination process.
- Structure of the National Monitoring Committees
(Stakeholders and responsibilities) - NTBS reporting format.
- Elimination and reduction process and procedures
( regional and national levels) - Steps to be taken in the elimination process (
Programme for NTBS elimination) - Online reporting system.
- Structure for future collaboration
17Challenges
- Timely response to NTB complaints from member
states (Administrative lags) - Imposition of new trade requirements (Smart
NTBS-pre shipment inspections) outside the treaty
and relevant protocols - Delayed establishment of NEPs and or NMCs
Insufficient budgetary allocation for
implementation of work programmes and action
plans. - Implementation of the NTBS elimination plan for
the removal and relaxation of NTBs. - Utilization of reporting tool for NTBs including
the On line reporting system - Establishment of a sustainable inter-regional
(EAC, COMESA, SADC) structure for effective
co-operation and harmonization of efforts for
addressing NTBs - Delayed submission and circulation of
notification of resolved NTBS by member states. - Development of an Penalty system
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