Cameroon signs an Interim Economic Partnership Agreement with the United Kingdom
On the 9 March 2021 in London, the High Commissioner of Cameroon to the United Kingdom (UK) His Excellency Albert Fotabong Njoteh and the UK International Trade Minister Ranil Jayawardena signed an Interim Economic Partnership Agreement (IEPA) between the Republic of Cameroon and the United Kingdom of Great Britain and Northern Ireland.
After close to 45 years in the European Union (EU), the United Kingdom’s Brexit decision in 2016, is having far-reaching economic implications for the UK economy and its trade relations both with the EU and its global trade partners. This is also true for Cameroon.
The UK – Cameroon EPA replicates most of the provisions of the EU-Cameroon Economic Partnership Agreement which was concluded on 17 December 2007. Effective implementation began on 4 August 2014 after Cameroon had ratified the agreement in July 2014. The European Parliament had approved the iEPA in June 2013. The EU-Cameroon EPA guarantees continued duty-free market access to the EU for Cameroon’s exports of products such as bananas, aluminum, processed cocoa products, plywood and other fresh and transformed agricultural products into the EU post Cotonou which expired on 31 December 2007. On its part, European Union is enjoying progressive liberalization for an agreed 80 per cent of it trade over 13 years with Cameroon. Major EU exports to Cameroon by value according to 2018 data as reported in an EU fact sheet are clinker (28%) chemical industries (24%), electrical machinery and equipment (17%), vehicles and transport equipment (16%), paper and cardboard (7.5%) and fertilizers (5%). Reflecting specific industrial development priorities, Cameroon has ensured that certain agricultural and non-agricultural processed imports from the EU are still subject to tariffs; these products include most meat products with 20 per cent tariffs, wines and spirit 30%, malt 10%, milk products 5%, flour 30%, certain vegetables 30%, wood and wood products 30%, used clothes and textiles 30%, paintings 30%. Under the EPA, Cameroon is removing import duties for 3 groups of goods. It began with group 1 (1727 tariff lines) in 2016 and group 2 (985 tariff lines) in 2017. To date, it has removed import duties for 100% of group 1 and 45% of group 2 products according to an EU report in October 2020. The report further indicates that, group 1 and group 2 products are regarded as essential inputs for industrial processes in Cameroon or consumer products which are not found on the local market.
The UK, being part of the EU, therefore enjoyed progressive market liberalization offered by Cameroon under this preferential trade arrangement. Brexit implied losing its market access privileges negotiated under the EU.
It is against this backdrop that the UK government in its post-Brexit strategy embarked on negotiating trade deals with its trade partners, including Cameroon. This process which began in February 2018 with Cameroon leading to the signing of a MOU on the 28 December 2020 to ensure a transition period of six months to provide negotiators of both countries adequate time to finalize a trade agreement. According to UNCOMTRADE data for 2019, bilateral trade between Cameroon and UK under EU-Cameroon EPA reveals that Cameroon imported goods worth a total of US $60,669,641 and exported goods worth total US $55,993,754 to UK. That same year, Cameroon re-exported goods worth US $156,113 to UK. It is clear that significant trade is taking place between UK and Cameroon.
Although the UK – Cameroon EPA has been signed, its implementation still requires domestic processes in both countries before it can enter into force. In Cameroon, a draft bill will be tabled by government before the lower House of Parliament for approval, after which the agreement will go through a similar exercise at the upper House which will grant the final authorization to the President of the Republic to ratify through an Executive Order in line with article 98 (1) of the interim agreement. The Agreement further designates the Ministries of Foreign Affairs of both countries in article 99 (4a) as depositaries.
What market access has been offered by the United Kingdom of Great Britain and Northern Ireland to the Republic of Cameroon?
Tariff liberalization according to article 20 (1) states that “Products ORIGINATING from Cameroon shall be imported into the UK free of customs duties with the exception of the products indicated and under the conditions set out in Annex II”. Annex II paragraph 1 provides clarification on the exception raised by article 20 by indicating that products originating in the territory of Cameroon which fall within Chapters 1 to 97 of the Harmonized System, excluding Chapter 93 (military weapons and ammunitions) which the UK shall continue to impose the duties applied on the basis of its WTO applied MFN rates).
Figure 1: The tariff reduction percentages in the table as set out in Annex III for customs duties on products originating in the UK.
The products in the five groups above, are as follows:
Live horses, asses, poultry, mammals, reptiles, cereals, oil seeds, clay, coal, photographic plates and films, newspapers, journals and periodicals.
Nuts, edible, fruits, granite, cement clinkers, mica, lubricating oils additives, hides and skins, leather, paper and paperboard, sewing thread, yarn synthetic, engines for marine propulsion.
Soya beans, dog or cat food, Portland Cement, petroleum spirit for motor vehicles, modelling paste, hydraulic fluids, plastics, wood, flax, waste and scrap of previous metals, reception apparatus for television.
Malt, flours and meals of oil seeds or oleaginous, gum Arabica, vegetable oils, meat preparations, fish preparations, chocolate, juice, petroleum jelly, fireboard, plywood, cotton, yarn, fabrics, stones; precious or semi-precious stones.
Furthermore, Annex II paragraph 2(a) provides for safeguard measures if the market price of tariff heading 1701 (Sugar and sugar products) falls below 80% for a consecutive period of 2 months compared to the previous marketing year. Cameroon has been granted full access to the UK market, and parties have adopted the MFN principle in Article 19(2) IEPA which states that “with regard to the areas covered by this Chapter, Cameroon shall grant the UK any more favorable treatment which could result from Cameroon becoming party to an economic integration agreement with a major trading partner after this”. The UK, for its part will do the same when it becomes party to an economic integration agreement with third parties. For the purposes of this Article, a major trading partner is any developed country or any other country that accounts for more than 1% of world trade in the year before entry into force of the agreement, or any group of countries accounting individually, or collectively for more than 1.5% of world trade in the year prior to the entry into force of the agreement referred to in this paragraph of Article 2.
For Rules of Origin (RoO), Protocol 2A provides that wholly obtained products comprising mostly minerals, agricultural products, animal products like meat and fisheries have duty free access to the UK market. Requirements to qualify as ‘sufficiently worked or processed products’ are defined on a case by case (by HS Code headings) in Appendix 2 and 2A of the agreement.
However, Appendix 2 and 2A provide details for manufactured products origin, in particular that the total value of non-originating inputs cannot not exceed 15 % of the ex-works price of the product. An exception is made in that; the 15% of the ex-works requirement shall not apply to products falling within Chapters 50 to 63 of the Harmonized System which comprise silk, woven fabrics, wool, yarn, thread of cotton, carpet, textile fabrics and apparel products etc.
With regards to cumulation, materials from member states of the EU and Overseas Countries and Territories, Africa Caribbean Pacific (APC) eligible group of states, established by the Georgetown Agreement 1975 and the UK are considered originating for the purposes of preferential market access for exports from Cameroon. The agreement therefore provides for bilateral cumulation, diagonal cumulation and full cumulation products to be considered originating from Cameroon. However, in terms of article 1B of the Interim Protocol 2A on originating products and methods of administrative cooperation with respect to products imported to the UK from Cameroon, the UK has reserved the right to remove a state from the list of eligible ACP states where;
the state concerned has ceased to be a member of the ACP group of states, established by the Georgetown Agreement 1975.
the state concerned has failed to ratify a preferential trade agreement with the UK within a reasonable period of time; or
the United Kingdom has concerns regarding the existence of appropriate conditions for the application of cumulation.
On Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary (SPS) Measures, article 41(1) states that “The Parties reaffirm their rights and obligations under the WTO Agreement, and in particular the WTO Agreements on the Application of Sanitary and Phytosanitary Measures (ʻSPS Agreementʼ) and on Technical Barriers to Trade (ʻTBT Agreementʼ)…..” However, the parties commit to improve public health in the territory of Cameroon, in particular by strengthening its capacity to identify unsafe products, pursuant to Article 47 which addresses issues of capacity building and technical assistance.
Annex I contains a development cooperation framework under which the UK will assist on mutually agreed development priority areas in Cameroon. These areas of assistance are identified under Annex I (B) paragraph 1 which states “The key areas of action that the UK may consider for assistance are set out …….” The use of “MAY” in this context leaves the UK with the latitude to decide whether or not to provide assistance at the request of Cameroon. UK’s assistance in the realization of these development aspects is further conditioned by the alignment of development assistance initiatives to key area 3 on Industry, diversification and competitiveness of economies in conjunction with regional development and key area 4 on strengthening of regional integration. The key areas of development assistance are as follows; 1-Development of basic infrastructure, 2-Agriculture and food safety at regional level, 3-Industry, diversification and competitiveness of economies in conjunction with regional development, 4- Strengthening of regional integration, 5-Improvement of the business environment and support for businesses and 6-Facilitation of the establishment of EPA institutions. The agreement highlights the readiness of parties to draw up a calendar for the implementation of measures selected for capacity building and for modernization under the development assistance framework.
In conclusion, the Cameroon-UK iEPA will enter into force in the coming months, offering new opportunities alongside those offered within a similar agreement signed by Cameroon with the EU. The agreement provides Cameroon and the UK an opportunity to increase trade, promote development and regional integration in Africa. Since International agreements are not self-executing, there is need for Cameroon to align national policies contained in the National Development Strategy 2020-2030 with new engagements that embodies vast domains of national priority areas like that of the iEPA. The institutional arrangement provides for an EPA committee which will be responsible for monitoring the implementation of the Agreement.
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