Members of the National Assembly Thursday unanimously ratified the Protocol on the Trade Preferential Tariff Scheme for Trade Preferential System of the Organisation of the Islamic Conference (PRETAS) and the Trade Preferential System of OIC Rules of Origin (TPS-OIC) respectively.
Laying the motion before deputies, Kebba Touray, the minister of Trade, Industry, Regional Integration and Employment, said the two conventions were formulated to implement the Framework Agreement on Trade Preferential System, which was signed by The Gambia on 5th of September 1993 and ratified in August 2009.
He explained that the Framework Agreement on Trade Preferential System of OIC seeks mainly to promote trade among OIC Member States through the exchange of trade preferences while the Protocol on the Preferential Tariff Scheme (PRETAS) seeks to achieve the objectives of the Framework Agreement by setting the mechanism for tariff reduction under the preferential scheme.
He added: "It recognises the special needs of the least-developed members and gives due regard to the bilateral and multilateral commitments of individual member countries. The specific objective is to promote intra-OIC trade through the exchange of trade preferences among Member States of OIC."
Minister Touray further explained that the Protocol also calls for the reduction or elimination of Para-tariff and non-tariff barriers whilst the Para-tariff includes the border charges and fees, other than tariffs, on foreign trade transactions which are levied on imports. He said the tariff reduction under the scheme would cover only 7 per cent of the total harmonised tariff lines.
"The tariff reduction would cover only tariff lines that are above 10 per cent with the following reduction modalities such as tariff lines that are above 25 per cent to be reduced to 25 per cent; tariff lines between 15-25 per cent to be reduced to 15 per cent; and tariff lines between 10-15 per cent to be reduced to 10 per cent," he told the deputies.
The Trade minister revealed that the tariff reduction would be implemented over a period of four years for developing countries and six years for Least Developed Countries, to which The Gambia belongs.
"The transition period for implementation of the protocol is three years of LDCs to allow them eliminate their Para-tariffs and non-tariff barriers. It also makes provision for safeguard measures such as anti-dumping, subsidies, countervailing measures which are to be consistent with relevant WTO rules. The protocol also establishes harmonised set of rules of origin as agreed under the Framework Agreement for the granting of concessions until the new set of rules of origin are adopted by Trade Negotiation Committee," he further stated.
Minister Touray also informed the gathering that Trade Preferential System would be operationalised after the Protocol on the Preferential Tariff Scheme (PRETAS), and that the TPS-OIC Rules of Origin are ratified by at least 10 OIC member states. He said that currently, 26 OIC member states have signed the protocol and eleven out of the 27 OIC African member states have signed (including Burkina Faso, Guinea, Guinea Bissau, and Nigeria, in ECOWAS). He noted that thirteen OIC member states have already ratified the PRETAS and thus, it came into force on the 5th February 2010.
TPS-OIC Rules of Origin
The Trade minister stated that the Trade Preferential System of OIC Rules of Origin establishes the rules for determining the origin of products eligible for preferential concessions under the Framework Agreement on Trade Preferential System among the OIC Member States and the Protocol on Preferential Tariff Scheme.
"Under this agreement, products from member states that are eligible for preferential concessions would have to meet one of the following conditions such as products wholly produced in the exporting participating states; materials from non-originating used in the manufacture of the products obtained in a participating state shall be regarded as sufficiently processed provided that the value of such materials does not exceed 60 per cent of the ex-works price of the product," he said.
He revealed that the agreement also outlines certain operations and processes that would not lead to originating status e.g. packaging, simple mixing, simple assembly, etc. He added that the OIC Rules of Origin also make provision for the prohibition of importation of products containing any inputs originating from non- participating states with whichParticipating states do not want to have economic and commercial relations.
According to Minister Touray, the protocol also highlights how originating products sent for exhibitions may benefit from the provisions of the Framework Agreement and how disputes arising from the implementation or interpretation of the provisions of the TPS-OIC Rules of Origin should be settled. Penalties for the breach of the TPS-OIC Rules of Origin would be based in accordance with national legislation.
He said the TPS-OIC Rules of Origin shall enter into force after the ratification of at least ten OIC member states and it shall be applied for determining the origin of products eligible for preferential concessions under the TPS-OIC and PRETAS.
So far, he continued, 24 OIC member states have signed the TPS-OIC Rules of Origin of which ten are OIC African countries (Burkina Faso, Guinea, Guinea Bissau, and Nigeria in the ECOWAS region). "Bangladesh ratified the TPS-OIC Rules of Origin in 2011 bringing the total number of ratifications to ten OIC member states. The other member states that have ratified the Rules of Origin are Malaysia, Jordan, Oman, Qatar, Turkey, the UAE, Saudi Arabia, Somalia and Syria," he added.
He also revealed that the TPS-OIC Rules of Origin entered into force since 2011 adding that the Twenty-Eighth Session of Standing Committee for Economic and Commercial Cooperation of the OIC (COMECE) held October 2012 in Istanbul, Turkey, called the OIC Secretariat to initiate the process for implementing the PRETAS.
Hon. Lamin KT Jammeh, NAM for Illiassa who seconded the motion, said the minister has done justice to the two motions, noting that it is essentially meant to protect the local industries and the markets particularly the rules of origins.
Foday A. Jallow, NAM for Niamina East, described the document as very important
Hon. Sainey Mbye, NAM for Upper Saloum, said it is very important for The Gambia to collaborate with other sister countries to make this move ahead. He said such protocol and agreement would help protect the local market citing the increase in prices of certain commodities on no grounds.
Hon. Ousman Njie, NAM for Sami, said the protocols would increase intra-trade, enhance industrialisation to ensure economic growth and development, create employment and encourage domestic production thereby reducing poverty.
Hon. Buba Ayi Sanneh, NAM for Kombo Central, also contributed to the adoption of the motions.