ECOWAS’ Common External Tariff
The measure is intended to facilitate free trade and advance greater integration. The adoption of a uniform regime of customs and related charges will hopefully help address the problem of cross-border smuggling, combat dumping and also bring economic benefits to the people of the sub-region.To facilitate the new policy, ECOWAS also adopted the Regulation on […]
The measure is intended to facilitate free trade and advance greater integration. The adoption of a uniform regime of customs and related charges will hopefully help address the problem of cross-border smuggling, combat dumping and also bring economic benefits to the people of the sub-region.
To facilitate the new policy, ECOWAS also adopted the Regulation on Supplementary Protection measures, which comprise the Import Adjustment Tax, and the Supplementary Protection Tax, and hiked the Community Levy by 150 per cent, from 0.5 to 1.5 per cent. The levy is to finance activities related to the Community’s integration drive. It further directed that member-states take ‘all necessary measures’ to improve the implementation of the ECOWAS Trade Liberalisation Scheme (ETLS) which should be evaluated annually.
While these measures to promote regional integration are welcome, it is worth remembering that custom duties and levies not only provide states with revenue but are also used to protect local industries and farming activities. Therefore any setting up of one uniform regime for the entire ECOWAS must be handled carefully. Much work still needs to be done before these measures can be actualised to be of benefit to the sub-region.
Low or near-zero customs charges may lead to cheaper imported goods. However, these tend to cripple local industrial and agricultural production, discourage new investments and create very little local employment. Countries in the sub-region are at different stages of industrial development as well as different agricultural and mineral potentials. If for example Nigeria increases import duties on rice to protect its farmers, nothing stops Benin or Cameroon from charging much lower for supporting Nigerian farmers, not to mention ensuring food security. Some countries may seek to ban the importation of second-hand clothing, so as to encourage the local textiles industry. Others may decide that they do not have any industry to protect, so why should they be made to pay higher? This shows that countries with different economic goals and different industrial and demographic bases may have different preferences. Thus, even though the CET is a product of long and protracted negotiations, it is clear that a lot still is a long way to go to harmonise the regional vision. Research, consultation and negotiations would have to continue to ensure that member nations’ respective interests are considered in this collective drive to regional integration. CET must be handled in such a way that local manufacturing and agricultural activities are not crippled, and that all nations, big and small, benefit.
The governments in the ECOWAS bloc also need to do more to sell the ECOWAS vision, programmes and conventions to the people. Too often, decisions are taken without broad consultation with the citizenry. While the benefits of integration could indeed be great, it is imperative to pay attention to the potentials for conflicts and pre-empt them.
More importantly, too many things are being proposed at the same time, including free trade area, common regional currency, and so on, and a need to move carefully in all these become very crucial, after examining all the implications. The ideals are commendable and worth pursuing, but a lot of work still remains for the desired goals to be achieved.
Ultimately however, we must be consistent and abide by agreements and conventions we sign up to. This is where the issue of waivers come in. Nothing will ever work if individual governments are in the habit of giving waivers to their friends and business partners to contravene laid down rules and regulations.