Tuesday, November 28, 2023
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WTO publishes 2023 version of world tariff profiles

World tariff profiles is the publication that the World Trade Organization (WTO) makes in collaboration with ITC and UNCTAD to give an overview of the tariffs and non-tariff measures imposed by various countries and customs territories in the world (170 in total). In analyzing data referred to Africa, it is interesting to note how the Most-Favored Nation (MFN) average tariffs vary widely among its nations. MFN tariffs are the tariff rates that a country applies to imports from all its trading partners which are not part of a preferential trade agreement (such as a free trade area or customs union). In practice, MFN rates are the highest (most restrictive) tariffs that a country can charge on imports (see the table below). The WTO data shows that in Africa, the higher tariffs are applied by Sudan (21.6%), Tunisia (19.5%) and Algeria (18.9%). To be noted that the first and the last country (Sudan and Algeria) are non-WTO members. On the other hand, the lowest tariffs are applied by Mauritius (0.8%) and Seychelles (2.5%). In terms of Regional Economic Communities (RECs), the ones with the lower MFN tariff rates are SACU (7.6%) and ECOWAS (12%), while the one with the highest is CEMAC (18%). A mistery, instead, remains the huge difference in MFN tariffs between EAC member States, that as a customs union should apply a common tariff towards non-EAC members.

With these disparities in tariff rates between African nations, one wonders if the conditions are ready for Africa to evolve in a short-medium future towards a Customs Union, as envisioned by the Abuja Treaty.

Looking at the data, these disparities raise serious doubts. It looks like it is still early to think to this project, as on this basis, any negotiations to establish a Common External Tariff (CET) would take long. Moreover, there is another aspect that can make things even more complicated. African nations that are members to the WTO are subject to art. XXIV.5, a) and b) of GATT (1994), which requires them to adopt (in moving to a Customs Union), common tariff rates that are no higher than the average of the pre-Union rates. The same rule, however, is not binding on non-WTO member African countries, which are 10 in total: Algeria, Eritrea, Ethiopia, Equatorial Guinea, Comoros, Libya, São Tomé and Príncipe, Somalia, Sudan and South Sudan. This creates a risk of division between the two groups, as the latter could refuse to accept the average tariffs that will be decided by the group of African WTO member countries. Something to think about before moving to the Continental Customs Union…

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