Presentation on theme: "DISMANTLING BARRIERS TO REGIONAL INTEGRATION & MARKET ACCESS TO OPTIMIZE MARKET OPPORTUNITIES & FOOD SECURITY DISMANTLING BARRIERS TO REGIONAL INTEGRATION."— Presentation transcript:
DISMANTLING BARRIERS TO REGIONAL INTEGRATION & MARKET ACCESS TO OPTIMIZE MARKET OPPORTUNITIES & FOOD SECURITY DISMANTLING BARRIERS TO REGIONAL INTEGRATION & MARKET ACCESS TO OPTIMIZE MARKET OPPORTUNITIES & FOOD SECURITY
Barriers to Regional Integration and Market Access in Eastern and Southern Africa vs Food Security in the Region By Safina T.Kwekwe and Annastacia W.Kiio
INTRODUCTION Tariffs and Non Tariff Barriers( NTBs) are major issues to deal with while addressing regional integration, market access and food insecurity in the region. Over time particularly in the last two decades in COMESA and EAC tariffs have either been eliminated or reduced significantly aimed at improving market access. However, this hasn’t translated to equally improved market entry as the new frontier to deal with is the NTBs. Trade openness that enables actual market entry is key to regional integration and food security.
INTRODUCTION cont………….. Trade liberalization and customs co-operation are important specific undertakings by RTAs such as EAC and COMESA member countries An ideal immediate outcome of such undertakings would be reduced food insecurity amongst cooperating member countries Contrary to this, food commodities face higher average tariffs than non food commodities in the region
Intra-regional Protection in Agriculture and Food, Staple Foods and Non-agricultural Products – Table 1 Trade descriptionSimple Ave. Weigh ted Ave. Min Rate Max Rate No. of Int'l Peaks Imports Value ($'000) Dutiab le (%) specific duty (%) Agri- foods intra- regional 7.2610.4807520482,094,73539.6 4.41 Non- agricultural- intra regional 4.72.706089847,774,50825.1 0.03 Intra-region staple foods imports 7.4228.980.0075.0206549,366.764.0 0.01
Average tariffs charged on staple foods imports from the region in 2011 - Table 2 RankReporter Name Simple Averag e Weighted Average Min Rate Max Rate No. of Total Lines No. of Int’l Peaks Imports Value (US$’000) Dutiable Imports (%) Specific Duty Imports (%) 1Tanzania23.7019.040.0075.00975814,522.860.20.000 2Burundi20.772.210.0075.0045231,832.68.40.000 3Ethiopia15.9310.394.5030.0021123,666.4100.00.000 4Rwanda7.871.960.0075.002364433,748.83.70.000 5Kenya6.0646.270.0075.00658330,232.693.60.000 6Malawi4.251.070.0025.00129913,217.513.50.000 7Zambia2.700.340.0025.001702144,873.42.30.000 8Mozambi que 1.572.050.0020.00132246,291.632.50.000
Key tariff protection measures of the staple foods by the countries include High tariffs (tariff peaks), with the highest tariffs of 75% being charged by some EAC countries. Several countries had tariff peaks (tariffs above 15%). No specific duty- was applied within the year analysed However, in 2008 Tanzania and Uganda applied some specific duty on some staple food imports.
Tariff Escalation Tariff escalation exists in meat, wheat, maize and the wheat related products (Table 3). Average tariffs applied on live bovine animals are far less than those applied for the meat of bovine animals whether fresh, chilled or frozen. Imports of live animals are much larger than those of the bovine meat
Tariff escalation cont….- Table 3 Product Hs code Product NameS. AvW. AvMin Rate Max RateImports Value (Us $’000) Meat products 0102Live bovine animals.2.822.180.0025.0013,269.420 0202Meat of bovine animals, frozen. 9.4410.290.0025.001,113.545 0201Meat of bovine animals, fresh or chilled. 12.257.150.0030.012,182.796 Maize 100590Other (maize-other than seed) 9.7746.150.0050.00330,979.409 110220Maize (corn) flour10.4314.920.0050.002,606.122 Rice 100610Rice in the husk (paddy or rough) 6.540.00 75.0011,601.852 100620Husked (brown) rice13.330.030.0075.002,086.572 100640Broken rice17.371.620.0075.003,159.890 100630Semi-milled or wholly milled rice, whether or not 17.800.370.0075.0012,898.517
NTBs As a result of trade liberalization undertaken in the region the use of tariffs for protection in trade has reduced and NTBs have replaced them as major barriers to trade Today NTBs are more common and more difficult to deal with. Moreover, NTBs keep on changing in nature After the known ones are addressed new ones emerge where the old NTBs are replaced with more innovative ones
Common NTBs in the Region in details Noclassification of non-tariff barrier NTB identified by COMESA, EAC and SADC Tripartite Coordination Mechanism* 1Government participation in trade and restrictive practices tolerated by governments restrictive single channel marketing, varying trade regulations, non-acceptance of certificates and trade documentation, cumbersome visa requirements, national food security restrictions, transiting procedures, road blocks, business registration and licensing. “Buy National ” policy 2Customs and administrative entry procedures (licensing) Non-standard customs documentation and administrative procedures cumbersome licensing of export and import licensing/permit Clearance delays at the customs, lack of transparency and consistence at the customs, arbitrary processing and bureaucratic processes and documentation requirements for the consignments 3 Trade policy Misuse of rules of origin, export taxes or export subsidies import licenses, import quotas, import monopolies, production subsidies and state trading.
Common NTBs in the Region in details cont……. No.classification of non-tariff barrier NTB identified by COMESA, EAC and SADC Tripartite Coordination Mechanism* 4 Technical Barriers to Trade duplicated functions of agencies involved in quality, quantity of dutiable import or export. 5 Sanitary and Phyto sanitary Measures (SPS) quality inspection procedures 6 Specific limitations unnecessary import bans and quotas import and export quota temporally bans on selected products 7 Charges on Exports other restrictive charges which are non export or import duty, charges in roads and border tolls 8 Poor infrastructure Poor physical infrastructure (roads, railways, and inefficient existing ones), lack of capacity to handle large volumes and transit traffic, lack of adequate functional storage and warehouse facilities. 9 Other Incorrect tariff classifications
Some emerging NTBs Congestion, and delays especially in issuing bonds at the borders Requirement for transporters to have introductory letters Un-harmonized Standards in the EAC in spite the Standards, Quality Assurance, Metrology and Testing (SQMT) law in place Food safety issues In name of Food security- export bans Transit transport requirement Duplication of roles and responsibilities within institutions dealing with NTBs within the Partner States is a barrier itself
Some recent trade related measures in some EAC countries CountryMeasureProducts affected BurundiImport taxes waiver (May and December, 2012) Cassava flour, maize flour, wheat flour, beans, rice, potatoes, fish and palm oil KenyaGMO labelling requirement (regulations, 2012)* 1 Quota on imports from COMESA Maize Sugar Banning importation of GMO foods* 2 All GMO foods TanzaniaTemporally ban of exports in 2011 Maize 1 Kenya gazette supplement No. 17 of 2012, legal notice no. 40 * 2 Directive by Ministry of Public Health and Sanitation 10 Dec 2012 (Mbithi and Kiio,2012)
Conclusion NTBs often lead to price collapse in surplus areas during high production seasons and price hikes in food deficit areas during low periods leading to limited availability and access to food. To address food insecurity, there is need to encourage open cross-border trade by reducing and ultimately eliminating barriers to trade in the region. Dismantling trade barriers to achieve trade liberalization (including abolishment of both tariffs and NTBs) is one of the most sought solutions to the issue of food insecurity in this region.
Master Question How do we address the emerging, ever changing, smart, new NTBs and how do we ensure that no new ones emerge or at least minimize the emerging NTBs?