To qualify for tariff preferences under the provisions of the African Continental Free Trade Area, value addition has to happen in state parties to a certain extent.
This is according to the African Continental Free Trade Area (AfCFTA) Rules of Origin, as summarised by the Secretariat.
Simple packaging, assembling, ironing, sorting, peeling, sharpening, simple mixing, printing and other simple additions that barely change the product classification in the Harmonised System will not qualify for tariff preferences.
Africa continues to be a net exporter of raw materials (minerals, forestry and marine) to western and Asian countries, while they it imports finished products.
The composition of Namibia’s export basket has been mainly composed of minerals such as precious stones (diamonds), uranium, non-monetary gold and copper ores and concentrates.
Fish continued to be the only non-mineral commodity within the top five products exported.
On the other hand, the import basket mainly consisted of manufactured goods and equipment.
However, the trend and practice could change if state parties commit to making the AfCFTA provisions to increase intra-Africa trade which will require the trading of continental manufactured goods to get tariff preferences.
More importantly, African countries are allowed to use manufacturing inputs and intermediate inputs within the continents to manufacture/add value to their final products.
Article 8(2) of the AfCFTA provides cumulation among state parties, by allowing producers in the state parties to use raw materials or semi-finished goods originating in any state party and undergoing working or processing in another member country, and the product shall be deemed to have originated in the state party where the final processing or manufacturing takes place.
As originating in the AfCFTA state party, and if the product to be traded needs to be exported temporarily outside the Free Trade Area, for it to retain the AfCFTA origin the product should meet certain criteria.
The product should not undergo further production or any other operation outside the territories of the member country, other than unloading, reloading, or any other operation necessary to preserve it in good condition, or to transport the product to the territory of a state party; and remains under customs control while outside the territories of the state parties.
The same provisions regulate a return of an originating product that was exported from a state party to a third party.
It shall be considered as non-originating unless it can be proven to the satisfaction of the customs authorities that the returning product is the same as that which was exported; and has not undergone any operation beyond that which was necessary to preserve it in good condition.
In terms of paragraph 2 of Article 23 of the Protocol on Trade in Goods as read with Paragraph 1 of Article 9, products produced in Special Economic Arrangement / Zone (SEZ) qualify for preferential tariff treatment if they meet the rules of origin requirements specified in Annex 2.
This means if Namibia expedites the regulatory framework of its Sustainable Special Economic Zones, and operationalises its own time- it could aid the country’s competitiveness.
CRITERIA FOR AFCFTA PREFERENTIAL TARIFFS
AfCFTA products originating in a state party shall, on importation into another State Party, benefit from the AFCTA preferential treatment upon submission of certain proof of origin.
A Certificate of Origin, whether in hard or electronic copy, issuance and acceptance of electronic Certificate of Origin shall be per each State Party’s national legislation.
Or the Origin Declaration given by the exporter on an invoice, a delivery note or any other commercial document which describes the products concerned in sufficient detail to enable them to be identified.
Proof of origin shall be prepared and submitted to the Customs Authorities of the importing State Party in any of the AU official languages and in accordance with the procedures applicable in that State Party.
They said authorities may require a translation of such proof of origin.
A Certificate of Origin shall be issued by the Designated Competent Authority of the exporting State Party on application having been made in writing by the exporter or, under the exporter’s responsibility, by the authorised representative.
The secretariat has also noted that the effective implementation of the AfCFTA Rules of Origin by the States Parties requires the issuing of Certificates of Origin and the verification of these Certificates. Email: firstname.lastname@example.org