Fifteen COMESA Member States are ready to start piloting the COMESA Electronic Certificate of Origin (eCO) System. The eCO is one of the latest tools developed under the COMESA Digital Free Trade Area (DFTA) initiative.
Burundi, DR Congo, Egypt, Eswatini, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Tunisia, Zambia and Zimbabwe have indicated their readiness to pilot the COMESA eCO system.
The need to start implementing the eCo system has gained urgency given the challenges that the movement of goods across borders is facing as a result of restrictive measures put in place in response to the Coronavirus pandemic. The eCO will replace the manual certificates and help to circumvent the onerous manual process.
Certificates of Origin are issued to exporters within the COMESA Free Trade Area (FTA) to confer preferential treatment to goods originating from an FTA member State.
The uptake of the electronic certificate has not gained traction among the Member States in the past for lack of the necessary regulations under the COMESA Rules of Origin (RoO).
The decision to adopt the eCo was made by the Council of Ministers in 2014 to replace the manual certificate. The objective was to facilitate intra-regional trade through a reduction in the costs and time required in registration, application and submission of certificates and the post-verification of originating goods. In November last year, the 40th Meeting of the Council of Ministers adopted the draft regulations to implement the COMESA eCO system.
Subsequently, a Technical Working Group (TWG) on Rules of Origin was tasked to review the Rules to facilitate the implementation of the COMESA eCO and other trade facilitation instruments.
Recently, during the 14th meeting of the TWG, COMESA Secretariat undertook to collaborate with the Member States that are ready to pilot the system to develop national piloting plans to ensure that electronic certificates are implemented sooner rather than later.
“The emergence of the COVID-19 pandemic calls for speedy implementation of the COMESA eCo by all Member States,” said the COMESA Director of Trade and Customs, Dr Christopher Onyango.
“This together with the improvement of customs cooperation and trade facilitation, will no doubt enhance intra-regional trade and attract more investments into the region.”
He noted that the region was currently facing two critical challenges: firstly, the COVID-19 pandemic, which has changed ways of conducting businesses across the world threatening to reverse the gains already made in fostering a liberalized trade regime.
Secondly, the value of intra-COMESA trade has remained stagnant and does not mirror the instruments put in place, especially under the FTA trade regime adopted way back in 2000.
“It is rather disheartening that despite the preferences offered under the FTA, Intra-COMESA is at 8% of total trade, compared to Africa’s 15%, America’s 47%, Asia’s 61% and Europe’s 67%,” Dr Onyango noted. “We hope the recently adopted COMESA response guidelines will help restore order and safeguard existing trading arrangements.”
As the TWG reviews the Protocols on RoO to incorporate the eCO, the Director urged the team to consider rules that are simple, transparent, predictable and trade-facilitating for businesses and trade operators.
“It is important to remember that RoO have a direct impact on the uptake of preferences and the rate of preference utilization. They are not just the passport for circulating goods under preferential tariffs but are as well the cornerstone behind effective application of preferences towards Member States.”
He observed that when the RoO are too costly to be implemented by firms relative to the expected benefits, exporters would rather pay tariffs than comply with strict rules of origin, leading to low utilization.
The meeting was attended by participants from Burundi, Comoros, Egypt, Eswatini, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Somalia, Sudan, Tunisia, Zambia and Zimbabwe.