Operational Working Group 3 – Nkafu Open Trade Initiative

//Operational Working Group 3 – Nkafu Open Trade Initiative

Operational Working Group 3 – Nkafu Open Trade Initiative

Free trade between Cameroon and Nigeria would boost local production in both countries and create opportunities that will promote industrialization and the development of national value chains. To give domestic firms a competitive advantage, it is essential to remove tariffs and import quotas. That notwithstanding, these measures can only be effective if the free trade agreement between the two countries respects the rules of origin. These rules which determine the country of origin of a product, are therefore essential for selecting products eligible for preferential treatment in the bilateral trade undertaken between both countries. Also, they are essential for promoting the national know-how of each country. The working session illustrated that while Rules of Origin exist, they are not currently implemented in Cameroon, whose origin rules draw from the Economic Community of Central African States (CEMAC). The deliberations illustrate that the AfCFTA currently has clear and logical origin rules that can be applied by both Cameroon and Nigeria. 

The participants outlined that Cameroon does not have rules of origin for non-preferential purposes. However, as a member of the CEMAC Customs Union, it does have the Community’s rules of origin for preferential purposes. These rules can, in principle, also be applied for non-preferential purposes. Cameroon has not notified the WTO of any rules of origin, whether preferential or non-preferential. Community origin status is based on goods that are obtained wholly from the CEMAC region, where manufactured products must be made from raw materials of community origin whose value is at least 50% of the total of all raw materials or 40% domestic added value. 

Recommendations.

  • Cameroon and Nigeria belong to separate regional economic zones (RECs). The findings from the working session illustrated that it is necessary to begin implementing the rules of origin that are currently prescribed by the AfCFTA. This will ensure that Origin rules are standardized in both countries and support traders in both countries. 

  • Secondly, the rules of origin application should be digitized as the forms are currently available on the AfCFTA website. In so doing, traders will understand exactly what information is required to better illustrate the origins of products or services. This will equally facilitate the implementation of the AfCFTA and ensure that the terms of trade in both countries benefit over the long run.

  • Finally, the findings equally stressed the need to properly measure how to account for the labor and manufacturing processes. A great portion of Cameron and Nigeria’s trade flows are in agro-processed foods ranging from beverages to household equipment. Consequently, Cameroon and Nigeria should agree on whether to use changes in tariff lines or “the content of domestic raw materials” to determine the contribution of each country.

2022-02-18T08:19:01+01:00February 18th, 2022|actions|