Thursday, May 28, 2009

Zimbabwe: Road to Comesa Customs Union

by Sindiso Ngwenya, 20 May 2009 - The Herald [Published by the government of Zimbabwe]

THE launch of the Customs Union on June 7 2009 in Zimbabwe by heads of state and government will mark a significant milestone in the integration agenda of Comesa.

The ultimate goal of the Customs Union is to create a single economic space in which goods will circulate freely.

The Comesa Customs Union will have the following elements:

* Establishment of institutions for the management of the programme for the establishment of the Customs Union;

* Implementation of a programme to align national tariff rates to the agreed Comesa Common External Tariff rates;

* Programme to increase intra-Comesa trade;

* Simplification and harmonisation of customs legislation and procedures;

* Development of regional standards for traded goods; and

* Building of capacity for the implementation and management of the Comesa Customs Union.

In preparation for the launch of the Customs Union, the Comesa Council of Ministers adopted a roadmap which specifies activities and expected outputs which should be achieved within specific time frames.

In addition, the roadmap also outlines the various roles which should be performed by the Secretariat and the member states.

Several activities contained in the roadmap have been successfully implemented, namely:

* Structure of the Common External Tariff

* Principles for a Common Trade Policy which will guide the region's trade relations with the rest of the world

* Common Tariff Nomenclature based on the 2007 version of the Harmonised System

* Common customs valuation system and Competition Rules

* Council Regulations for the Comesa Customs Union

* Customs Management Regulations

Regional sensitive products and tariff alignment schedules

The 25th Council of Ministers meeting held in December 2008 adopted the Comesa Tariff in its allocation of rates to Chapters 1-97 including the splits.

The allocation of rates was been based on policy guidance aiming to promote industrial development based on value addition, diversification and innovation as directed by the heads of state summit held in Djibouti in 2006; and ensuring that producers in the region as far as possible obtain raw materials and intermediate goods competitively, and environmental protection as well as creation of employment and wealth.

The full Common External Tariff has now been subjected to expert scrutiny and refinement by the World Customs Organisation in collaboration with the Secretariat and regional experts.

The refined Comesa Tariff is being used for the production of national sensitive products and tariff alignment schedules indicating over what period and how the national tariffs would be aligned to the CET agreed rates, while taking into account flexibility and policy space due to national specifications and levels of development.

The regional strategy for achieving the above goal is through the establishment of National Task Teams in all the Comesa countries made up of officials from the Comesa Co-ordinating Ministries, the Ministries of Finance and the Revenue Authorities. Comesa has convened two regional meetings for all the National Task Teams.

The main objective of the National Task Teams is to steer the national and regional process leading to the finalisation and submission of the national sensitive products lists and tariff alignment schedules.

Regarding the methodology of developing schedules of tariff alignment to the Comesa CET, each Comesa country should produce three schedules based on the following structure;

* Schedule I: consisting of tariff lines with rates aligned to the CET;

* Schedule II: consisting of tariff lines with rates not aligned to the CET but align able within a specified timeframe (short to medium term;

* Schedule III: consisting of tariff lines with rates not aligned to the CET and alignment only possible in the long term or deferred indefinitely;

The National Task Teams are, therefore, expected to: ensure national tariff structures are based on the Comesa CTN; validate Schedule I and extend it to include all tariffs at the eight-digit level; and to generate Schedule II including proposed measures for eliminating sensitivity in the short to medium term.

The National Task Teams are also expected to generate Schedule III and, wherever possible, propose measures that will contribute to making the tariff lines on the schedule to be aligned to the CET; and to propose measures and means of domesticating the provisions of Comesa's Regional Trade Policy and those of the relevant legislation related to the Customs Union.

The generation of Schedules II and III must be done in close consultation with all relevant stakeholders in the country.

The 23rd Trade and Customs Committee meeting held on May 4-6, 2009, recommended that Schedule I (containing products aligned to the CET) should be adopted; all the member states submit their lists of sensitive products and tariff alignment schedules by May 20 2009 for attachment as Schedule II and that all member states shall be allowed a transitional period from the launch of the Customs Union to align their national tariffs with the Comesa CET and the IC is invited to decide on the duration of the transitional period.

The meeting further recommended that the CET should be based on the CTN and member states should implement the Comesa CTN in the national tariff.

In addition, the committee recommended the establishment of a standing Committee on Regional Trade Policy, which will carry tasks necessary for the effective establishment and operation of the customs union.

These recommendations mean that the Comesa region has finally completed the preparatory process for the launch of the Customs Union.

What remains now is the continuous process of refining and strengthening the Customs Union, and ensuring that the union benefits all countries and stakeholders.

Dr Sindiso Ngwenya is the secretary-general of Comesa.