5 February 2013

Gambian Parliament Ratifies PRETAS Protocol

The Gambian lawmakers on Thursday ratified the protocol on the Trade Preferential Tariff Scheme for Trade Preferential System of Organisation of the Islamic Conference (PRETAS) along with the Trade Preferential System of OIC Rules of Origin (TPS-OIC).

"The Gambia as a small country and small market is to benefit immensely from any protocol", asserted Hon. Kebba Touray, Minister of Trade, Industry, Regional Integration and Employment.

Hon. Touray in his presentation told deputies that 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.

The Trade Minister disclosed 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. He said the Protocol on (PRETAS) seeks to achieve the objectives of the Framework Agreement by setting the mechanism for tariff reduction under the preferential scheme.

"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. The tariff reduction under the scheme would cover only 7 per cent of the total harmonised tariff lines", he disclosed.

Hon. Touray mentioned the special needs of the least-developed members in terms of bilateral and multilateral commitments. He revealed that the tariff reduction would cover only tariff lines that are above 10 percent. He revealed the provision for safeguard measures such as anti-dumping, subsidies, countervailing measures which are to be consistent with relevant WTO rules. Hon. Touray said the protocol 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.

"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", he told deputies.

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 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 further 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 which participating 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.

However, he said that 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). He added that 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 Illiasa 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. He showed concern about the tariff reduction as the country is a tax based economy.

Hon. Buba Ayi Sanneh, NAM for Kombo Central raised concern about the anti-dumping which he said should be stressed as it is hazardous to health. Hon. Sainey Mbye, NAM for Upper Niumi also supported the motion saying it would help the local market. He said it would probably help to reduce the price of commodities in the country.

"The issue of tariff, you will lose 5 percent rate but if you expand the market you will have increase in volume. By increasing the volume it will bring more revenue",said Minister Touray.

The Trade Minister explained that the reduction of tariff is expected to bring down the price of commodities. He said it would have a positive impact on the prices of commodities. He said it is different from the Value Added Tax (VAT).

"The issue of anti dumping, we are going to be very clear about the type of products to come to the country. We are going to inspect them",he pointed out.

Subsequently, the motion was adopted by the members unanimously and session was adjourned by the Speaker of the National Assembly.

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