1601 Working Group News on Trade – January 2016

Working Group News on Trade – January 2016

      1.       Ghana Refuses ECOWAS Common Tariff

Ghana has refused to implement the Common External Tariff (CET) agreed by West African states. The Economic Community of West African States (ECOWAS) began the implementation of the CET in June, 2015. The major thrusts of the new tariff regime include, among others, easy movement of goods and persons across borders, removal of major trade barriers, and establishment of a common market in West Africa in order to make goods from ECOWAS countries affordable. Despite that many ECOWAS members, including Nigeria, have kicked off the CET regime, Ghana, a major economic player in the region, is yet to key into it. The CET regime is expected to raise trade among West African countries, create many jobs and boost individual economies of West Africa. It has the capacity to present West Africa as a strong economic and negotiating region in the world.


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      2.       Madagascar: Trade with Europe - Zero customs duty on second-hand clothes


The second-hand clothes from Europe will now be exempt from customs duties in Madagascar, which raises the fear of small garment enterprises. No tariff barrier. The articles in thrift stores can now come to Madagascar without paying any customs duties. They are among the 1,551 product lines whose tariffs are changed by law in 2016 under the interim Economic Partnership Agreement (EPA) with the EU. If the majority of textiles articles still pay 15% from customs duties, the articles of used clothes imported from Europe will no longer be subject to VAT. In 2015 the customs value of thrift items had risen to nearly 85 milliards ariary, and having generated nearly 17 milliards ariary tariffs. With this exemption, the shortfall should therefore be 3 milliards ariary.


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      3.      East Africa: EAC Goods to Gain Better Access to Larger Markets in Africa


East African countries will gain better market access in Africa under the Tripartite Free Trade Area (TFTA). The 26 countries under the TFTA are expected to start implementing the trade framework to help countries exchange tariff concessions. The TFTA agreement will, therefore, serve as the basis for the completion of a Continental Free Trade Area by 2017, with the aim of boosting trade within Africa by up to 30 per cent in the next decade. A total of 16 countries, including the EAC partner states, have signed the TFTA agreement. 2016 will also see African countries access a larger market in both the developed and developing countries following a surprise deal at the World Trade Organisation meeting in Nairobi in December. The five East African countries and the EU Commission are expected to sign the Economic Partnership Agreement in early 2016 and ratify it by October.


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