The COMESA Customs Union was launched by the Heads of State and Government on 7 June 2009 in Victoria Falls , Zimbabwe
The Common External Tariff structure which is meant to promote value addition in the COMESA region and is such that the tariff rate for raw materials and capital goods is 0%; that of intermediate goods is 10%; and that of finished goods is 25%. The COMESA Council of Ministers adopted the structure of the CET in May 2007 and provided for flexibilities according to which Member States can designate some products to be sensitive. Sensitive products will be given differential treatment in terms of application of the CET.
The three-year transitional period which started from June 2009 when the Customs Union was launched, was granted to allow Member States to identify and submit their sensitive products and tariff alignment schedules. In addition, the transitional period was granted to allow for countries to align their national tariffs with the COMESA Common Tariff Nomenclature (CTN) and the COMESA CET.
The COMESA Customs Union builds on the Free Trade Area which COMESA successfully launched in 2000.
The benefits of COMESA Customs Union to the region include the following:
a) Producers will get a large and wider market and can thus produce more goods;
b) A large single market will encourage mass production of goods and services thereby lowering the cost of production by taking advantage of economies of scale.
c) The COMESA Customs Union, through the CET, offers equal protection to all manufacturers against third country imports and minimises the possibility of transhipment or trade deflection.
d) Through the CET, COMESA Customs Union will level the economic environment and promotes fair competition by reducing disparities in production costs for manufacturers in the various countries with regard to taxes on imported raw materials and intermediate goods from third countries.
e) By offering a large market with harmonised trade policy, COMESA Customs Union has the potential to attract foreign investment seeking to exploit a large market.
f) Traders will get wider choice of goods from the countries in the COMESA Customs Union;
g) Traders will experience lower transactions costs and fewer delays at the borders due to the harmonised customs and other procedures.
h) The countries by joining forces and having harmonised trade policy with a COMESA Customs Union against third parties will have a stronger voice in international forums.
1 comment:
Smooth functioning of the customs union, including the complete elimination of all tariff and non-tariff trade barriers, coupled with a common external tariff, free movement of persons, labor, services, and the right of establishment and residence, the free movement of capital within the community.
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