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New edition of the WTO tariff profiles still shows substantial duty rate differences among African countries

The World Tariff Profiles is an annual publication that the World Trade Organization (WTO) prepares in collaboration with ITC and UNCTAD to describe the tariff and non-tariff measures imposed by more than 170 countries and customs territories in the world. Data referred to Most-Favored Nation (MFN) average tariffs in Africa shows a lack of homogeneity in such tariffs, since they vary widely among 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. The country with the most favorable customs duty rates in Africa (less than 1 percent average) remains Mauritius, followed by Seychelles (2.6 percent), in line with the previous editions of the WTO tariff profiles. Conversely, African States that have the highest MFN tariff duties in the continent are two North African countries: Tunisia and Algeria. However, the new edition of the WTO tariff profiles does not show the MFN tariffs currently applied by Sudan - a non-WTO member - which was indicated in the previous edition of the report (2023) as the country with the highest average customs MFN duties (21.6 percent) in Africa, followed by Tunisia, and Algeria (another non-WTO member). Also, Ethiopia was indicated in the 2023 edition as having an average MFN duty tariff of 17 percent, while the new edition does not show any data in reference to this country.

In terms of Regional Economic Communities (RECs), the ones with the lower MFN tariff rates are SACU (7.5 percent, except South Africa, where the average MFN tariff is 7.6 percent), SADC (12 percent) and ECOWAS (12 percent), while the one with the highest rates is the Central African Economic and Monetary Community (CEMAC), where its members reach a 18 percent average. A mistery, remains the wide differencials in MFN tariffs among EAC member States, which as a customs union should apply a common tariff towards non-EAC members. This is probably an indicator that the EAC CET has many exceptions, as its members apply different customs duties on imports from third-countries on a group of products that is larger compared to other African RECs. Among EAC member states, the average MFN tariffs dropped (compared to the previous edition) from 18.4 to 15.6 percent in Uganda, reaching the same average as Somalia. Surprisingly, the country in the EAC which is indicated as the one having the lowest MFN duty rates is South Sudan (10.2 percent), while Burundi, Kenya, Rwanda and Tanzania have average rates respectively of 14%, 13.8%, 13.3% and 14.1%.

Looking at the above data, disparities in duty rates cast a doubt on how practical is the project of establishment of a Customs Union at continental level, according to the roadmap set forth in the Treaty of Abuja. With such differences, negotiations to establish a Common External Tariff (CET) are expected to take long. Moreover, there is another aspect that complicates this scenario. African nations that are members to the WTO are subject to art. XXIV.5, a) and b) of GATT (1994). Such provisions require WTO members who are willing to move to a Customs Union to adopt common tariff rates that are no higher than the average of the pre-Union rates. However, non-WTO member African countries, which are 9 in total, are not bound by this rule. They could therefore refuse to accept the principle of the arithmetical average of pre-Union rates, that would oblige them to reduce significantly their tariff rates, which among others represent a substantial source of funding of their State burgets. They are: Algeria, Eritrea, Ethiopia, Equatorial Guinea, Libya, São Tomé and Príncipe, Somalia, Sudan and South Sudan.

Comoros became a WTO member only a few months ago, during the 13th WTO Ministerial Conference (MC13) in Abu Dhabi on 26 February 2024.

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