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 2010 Nairobi, Kenya

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.

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.

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.

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

Top Four NTBs by Category Restrictive trade practices 1Corruption 2Permits and licenses 3Exchange controls 4Non-automatic licensing COMESA and EAC RoO 1Corruption 2Arbitrary tariff application 3Arbitrary product classification 4Non-acceptance of CoO Clearance of goods documentation 1Lengthy clearance processes 2Lengthy classification and valuation of imports processes 3Arbitrary documentation requirements 4Corruption Transit traffic/trucking issues 1Variable documentation requirements 2Inefficient port operations 3Variable weighbridge checks 4Corruption

Study findings  52% indicated that intra-COMESA trading conditions had got better over last 5 years  But NTBs still added >5% to landed cost of goods for >50% of respondents and for some >20%.  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 US$3,500 – 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 US$145,000 per month on employees time and accommodation costs due to NTBs and delays.

Efforts for elimination of NTBS Efforts for the elimination of NTBS can be categorized into four main thematic areas; 1) Policy 2) Institutional arrangements / Mechanisms 3) Modalities 4) Monitoring and evaluation

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)

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

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;

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

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

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