ECOWAS moves to strengthen common market, launches new tariff regime

In order to strengthen its common market, the Economic Community of West African States (ECOWAS) has formally launched the new regional common external tariff (CET) which will become fully operational January 1, 2015.

The CET was launched at the 46th ordinary session of the ECOWAS Authority of Heads of State and Government held in Abuja.

It was proposed as one of the instruments by ECOWAS member states to strengthen their common market, seek for the adoption of a common external tariff and a common trade policy to promote cooperation and integration, among member states.

The common external tariff is also a step towards creating a common market in the sub-region and a free trade zone and to also enter into negotiation with the European Union (EU) for the Economic Partnership Agreements (EPA).

With a view to enhancing the economic integration process in West Africa, ECOWAS in its extraordinary session in Dakar, Republic of Senegal in October 2013 had agreed on the creation of a 1.5 percent community integration levy, whose scope and operationalisation would be the subject of further regional reflection, as part of mechanisms to enable the region cope with the challenges of implementation of the new tariff regime.

Nigeria potentially could be the biggest beneficiary of the West Africa Customs Union expected to kick-off in January 2015 based on its landmass, population as well as its capacity and resources.

At the launch, the bulky document which was prepared in form of a book was handed to all the heads of states at the event.

The CET is expected to increase turnover due to a larger domestic market; enlargement of member states’ industrial sector through higher economics of scale; higher production and productivity; higher capital accumulation (economic growth) and strengthening of national institutions through peer learning among members.
Empirical studies of the European Union have found that integration leads to higher economic growth; productivity growth; less macroeconomic fluctuations; increased intra-regional exports, and higher foreign direct investment.

They attribute the shortcomings of CET to loss of national trade policy, sovereignty to regional institutional arrangements; loss of lobbying ability by the producers and workers; low level of tariff which can lead to dumping and de-industrialisation; loss of government revenue coming from tariff.

Meanwhile, the ECOWAS heads of state and government at the meeting reviewed the progress recorded in the West Africa sub-region in the outgoing year.
Two issues took the centre stage: security and the scourge of the Ebola virus disease (EVD).

The leaders also discussed the political stability of the region with particular attention on five countries that would be holding elections next year namely: Nigeria, Togo, Burkina Faso, Guinea and Cote d’Ivoire.
In his welcome remarks, President Goodluck Jonathan called on member-states, development partners and the international community to contribute generously to the ECOWAS Regional Solidarity Funds to fight Ebola.
Stating that the rising scourge of terrorism was worrisome and threatening the peace and security of the sub-region, President Jonathan called for stronger and more effective regional, continental and global alliance to rid the region of terrorism, piracy and violent extremism.