The admission of the two North African countries into the West African economic bloc would negatively affect trade and customs revenue of ECOWAS countries, a preliminary report by the UN Economic Commission of Africa (UNECA) has stated.
Preliminary findings of the study by the West Africa office of UNECA revealed that admitting Morocco and Tunisia would lead to deterioration of trade and a decline in customs revenues for ECOWAS countries.
On the request of the ECOWAS Commission, the ECA, as a think-tank, has undertaken a thorough analysis of the potential implications on trade flows of the expansion of ECOWAS with the admission of the two countries as well as the re-admission of Mauritania.
The preliminary report of the study was released at a two-day sub-regional ad hoc expert group meeting in Cotonou, Benin, 25 – 26 June 2018.
“The possible accession of Morocco and Tunisia would have contrasting effects on ECOWAS countries,” the report said, adding that ECOWAS would register negligible increase in exports to the North African countries, while the two countries’ exports to ECOWAS would increase further.
With free trade zone, for example, Moroccan exports to ECOWAS would increase by 74 per cent, compared with 24 per cent for ECOWAS; for Tunisia, export would increase by 89% against 49% for ECOWAS countries.
In addition to trade flows, government revenues derived from customs tariffs would be reduced with the admission of Morocco and Tunisia.
“All ECOWAS countries, without exception, would see a reduction in their tariff income,” the report said. Meanwhile, Morocco and Tunisia would have positive but different results. For Morocco, the simple free trade zone leads to a modest improvement in its tariff revenues by US$3.2 million.
In general, the ECA study revealed that ECOWAS is either negatively affected by the agreements or records lower gains than Morocco and Tunisia.
The ECA West Africa director, Prof Dimitri Sanga, said certain level of imbalances or disproportionate benefits are “quite normal” in the first 10 years of a free trade agreement.
He said the ECA reports only looked at trade and there were a range of other issues including the political implications, security issues, free movement of people issues that have to be looked into by the Ecowas Commission before fully and finally deciding on the admission of Morocco and Tunisia.
“So you might have a lost in one area but that could be compensated by gains in other areas,” Prof Sanga said. “ECOWAS will look at a whole range of issues; it might be the case that gains in other areas are more than the trade losses.”
Besides, the ECA West Africa director said in the event that ECOWAS decided to admit Morocco and Tunisia, there would be a set of mechanisms put in place to compensate ECOWAS countries to sort of remedy the situation.