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 - PowerPoint PPT Presentation

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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

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... of CoO Clearance ... 100%. Average direct additional cost of NTBs per shipment was US$3,500 excluding bribes! It was often taking an average of 6 days ... – PowerPoint PPT presentation

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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
2
Introduction
  • 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.

3
Guiding 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.

4
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5
Background 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.

6
Focus 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

7
Top 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
8
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9
Study 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.

10
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11
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12
Efforts 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

13
Efforts 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)

14
On 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

15
Inter 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

16
Focal 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

17
Challenges
  • 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

18
  • The end
  • Thank you
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