Article 3 of the ECOWAS revised treaty highlights one of the main objectives of ECOWAS as promoting economic integration in the region by, among others, creating a common market. One essential step towards realising this objective was the setting up of the ECOWAS Trade Liberalization Scheme (ETLS).
The ETLS is a tool to facilitate the working of a Free Trade Area. It ensures that goods can be circulated freely without the payment of customs duties and tariffs. Aside from this, it also includes putting in place measures aimed at facilitating trade by reducing red tape and paperwork at borders.
The ETLS came into existence first in 1979 but only covered agricultural goods, livestock, unprocessed goods and artisan handcrafted products at that point. However, it expanded in 1990 to also include industrial goods. This created the need for rules which determine whether industrial goods originate within the region or meet other criteria conferring origin. The “Rules of Origin” were therefore spelt out (see page 5). An industrial good which complies with these Rules of Origin is eligible to benefit from ETLS.
The Scheme has undergone a series of transformation in respect of the categories of goods that are covered.
The first category was defined when the scheme first came into existence in 1979. At that time, agreement was reached on only agricultural, artisanal handicrafts and unprocessed products to benefit from the scheme. Following this, in 1990, further agreement was reached and industrial products could be approved to take part in the scheme.
With industrial products being accepted, it became imperative to define what products were “originating” from the ETLS region. The rules of origin which guide this concept are defined in the ECOWAS protocol A/P1/1/03 of 31st January 2003. It defines out originating products as follows:
- Wholly produced goods; goods whose raw materials completely originate from the region.
- Goods which are not wholly produced but their production requires the exclusive use of materials which are to be classified under a different tariff sub-heading from that of the product.
- Goods which are not wholly produced but their production requires the use of materials which have received a value added of at least 30% of the ex-factory price of the finished goods.
It must be noted that goods manufactured in free zones or special economic schemes involving suspension or partial or total exemption of entrance fees do not qualify for originating products status.