African Continental Free Trade Area
African countries will implement a reporting, monitoring, and elimination mechanism for non-tariff barriers (NTBs).
Countries in Africa seek to increase intra-African trade through the implementation of the African Continental Free Trade Area (AfCFTA). The parties to that agreement are negotiating the specific timeframes in which they will reduce their tariffs for intra-African trade. Meanwhile, reducing the significant burden of onerous non-tariff barriers (NTBs) also remains a critical cost factor for any company operating on the African continent.
The Costs of NTBs
According to the ESCAP-World Bank project, the average cost of non-tariff measures in intra-ECOWAS (Economic Community of West African States) trade is 241% of the tariff cost of trade. The non-tariff measures cost includes transportation costs as well as costs associated with compliance with non-tariff requirements such as the time spent, and cost associated with, obtaining information about and complying with the required procedures. Wait times at borders are another a major factor. The Trade Law Center estimates that a 20% reduction in the costs associated with transit time delays at customs, terminals, and internal land transportation would bring economic benefits as great as the elimination of all tariffs on the African continent.
How the AfCFTA Defines NTBs
The AfCFTA agreement seeks to identify and eliminate NTBs and prevent new ones from being implemented. The agreement categorizes NTBs into the following areas: 1) government participation in trade and restrictive practices (for example, export or import bans or restrictions and licenses); 2) customs and administrative entry procedures; 3) technical barriers to trade such as labeling, standards and technical regulations; 4) sanitary and phytosanitary measures (such as residue levels, for example); and 5) charges on imports (domestic levies beyond tariffs).
How the AfCFTA Addresses NTBs
The AfCFTA agreement requires parties to notify new proposed measures and regulations to the AfCFTA Secretariat for transparency and circulation to other members. The AfCFTA agreement establishes several organizational structures to address NTBs: 1) a Sub-Committee on NTBs to monitor overall implementation and progress on reducing and eliminating NTBs; 2) a Unit for the Coordination of NTB Elimination in the AfCFTA Secretariat (located in Accra, Ghana); 3) National Monitoring Committees in each African state comprised of public and private stakeholders to identify and define processes for eliminating NTBs; and 4) National Focal Points within state governments of individual African countries.
New Feature – The NTB Reporting, Monitoring, and Elimination Mechanism
The agreement also creates an online NTB Reporting, Monitoring and Eliminating Mechanism at https://tradebarriers.africa/ State parties and economic operators in Africa can use this mechanism to report “an obstacle encountered when trading goods across intra-African borders, for example, excessive delays, ad hoc fees at the border, cumbersome document requirements or restrictive product standards and regulations.” Active complaints from any party can be viewed at https://tradebarriers.africa/active_complaints.
Complaints are initially referred to any Regional Economic Community (REC) if it relates to trade between two states within a REC. If the NTB issue identified is not between two REC states or is not resolved at the REC level, the complaint goes to the National Focal Points in individual African states for them to examine and respond regarding potential resolution. The responses can be found on the portal.
So far, the implementation of this mechanism has related to individual traders’ specific concerns; the solutions usually do not result in major policy changes. The NTB Mechanism is separate from the dispute resolution provisions of the AfCFTA. International companies that meet domestic establishment requirements in an AfCFTA country may have access to the NTB Mechanism to submit concerns related to the movement of goods into other AfCFTA countries’ markets. Concerns about NTBs in their country of operation, however, are not subject to the mechanism, and should be addressed through bilateral diplomacy or the local court system in the country of operation.
For more information about Africa’s regional integration and to formulate your strategy for doing business in this context, contact: U.S. Commercial Service Ghana at firstname.lastname@example.org, Tel: +233-(0)30-274-1870, www.trade.gov/ghana-contact-us.