HIGHLIGHTS

Central African Countries To Harmonize Trade Cooperation Instruments

The harmonization of trade cooperation instruments is one the major challenges facing economic integration in central Africa. Because countries in the sub-region cover both Economic Community of Central African States (ECCAS) or the Economic and Monetary Community for Central Africa (CEMAC), the rules of trade are often conflicting. The two RECs have different rules of origin, certificates of origin, compensation mechanisms and the treatment of re-exports. This mismatch is still hampering free movement of persons and goods between the two entities belonging to the same sub-region. Mr. Abdoul Kane, senior economist at the Economic Commission for Africa's (ECA's) sub regional office in central Africa, said: "A customs officer at the border between Cameroon and Chad can either apply the ECCAS or the CEMAC rules of origin," which could make the difference between profit and loss for a trader.

In an effort to harmonize the instruments, ECA in collaboration with CEMAC and ECCAS, organized an expert group meeting in January 2007 in Douala, Cameroon, to elicit concrete proposals for harmonizing trade instruments in the sub region.

Experts agreed on the definition of common rules of origins for CEMAC and ECCAS. For a good to be considered as originating from CEMAC and ECCAS, its processing should reflect 40% of local raw material and 35% of value-added transformation.

Participants to the Douala ad'hoc experts group meeting also recommended the adoption of a single CEMAC/ECCAS certificate of origin aligned on the current ECCAS model.

Experts also urged CEMAC and ECCAS to start designing budgets that take into account the need to generate compensation funds to back the implementation of preferential tariffs.

It was also suggested that the Central African inter-States Transport Programme should become a joint CEMAC/ECCAS project. This transport programme facilitates trade exchanges by reducing the number of checkpoints as well as fraudulent treatment of goods in transit.

However, the issue of treatment of re-exports and compensation funds still requires further analysis, and the RECs have requested ECA to undertake further studies and advise on this, including how to avoid abuse of preferential tariffs.

The harmonization process of trade cooperation instruments in Central Africa must be completed by January 2008.