by Laila Ibrahim
The Economic Community of West of Africa States (ECOWAS) have formally launched the new regional Common External Tariff (CET) at the 46th Ordinary Session of the ECOWAS Authority of Heads of State and Government.
The CET, which was launched at the session in Transcorp Hilton Abuja, will become fully operational on January 1, 2015.
The common external tariff 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 co-operation and integration among member states.
The new 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 the view to enhancing the economic integration process in West Africa, the ECOWAS in its Extraordinary Session in Dakar, Republic of Senegal in October 2013 had agreed on the creation of a 1.5 per cent community integration levy, whose scope and operationalisation would be the subjects of further regional reflection, as part of the mechanisms to enable the regions cope with the challenges of implementation of the new tariff regime.
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.
It however has its own downside as 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 the 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.
