By Sharon Atieno
According to a report released by the World Trade Organization (WTO) Secretariat, there has been low use of tariff preferences (lower rates or other advantages) for agricultural exports compared to manufactured goods for least developed countries (LDC) of which out of the 36 who are WTO members, 26 are African countries.
Despite the fruits, vegetables and plants category being the single most important agricultural category by value of imports eligible for preference, only 18 percent of imports from LDCs in the category received tariff preferences, the Secretariat report notes.
Agricultural products are often very simple products such as fresh fruits and vegetables subject to simple rules of origin, so it could be expected that LDC producers would face no difficulties in complying with such rules to enjoy preferential treatment, the Secretariat remarks.
Through examining some product-specific cases such as exports of beans from Senegal to the European Union, Switzerland and Norway; exports of cut plants from Tanzania to the EU, Norway, Korea, the United States and Chile; exports of spices from Nepal to India, Switzerland and the United States; and exports of rice from Cambodia to the EU, the US and Switzerland, the Secretariat cites origin certification or direct transportation requirements (the goods must be shipped directly from the beneficiary country to the preference-granting country) as the possible explanation for underutilization.
The cases indicate that direct transportation and certification requirements have a direct impact on utilization. Moreover, there does not seem to be a strong relationship between preferential tariff margins and utilization rates.
“It is difficult to draw clear-cut conclusions from these specific examples and further work is needed on the issue,” the Secretariat said.
In a recent meeting of the Committee on Rules of Origin where members of the WTO were discussing the Secretariat Report, Cambodia, an LDC member said, “direct transportation and certification requirements certainly may have an impact and given the importance of agriculture to LDCs, further examination is needed.”
Speaking for the LDC Group, Chad said it was important to study further what the exact nature of problems related to certification requirements are.
For the African Group, Tanzania agreed that further work was needed, especially since agriculture was the most important export sector for LDCs; it called for more analysis of the problems related to direct shipment requirements, where big gains could be made, and a possible outcome by the next Ministerial Conference in June 2020.
Mali cited the barriers caused by direct shipment requirements for landlocked countries like itself, a view shared by Laos, while Gambia urged all preference-granting members to review their rules of origin and look at areas where these rules could be simplified.
Thailand noted that it was reviewing its duty free/quota free regime for LDC goods in order to enhance its utilization by LDCs while European Union said it needed more time to examine the Secretariat report in detail though it supported continued work in this area.