Utilization of preferential trade areas in Africa : under the project “Capacity-building for inclusive and equitable African trade arrangements” (FED/2019/405-346)

Abstract

The present report sets out the findings of research to determine the extent of utilization of trade arrangements preferences by African countries. In this context, “preference utilization” refers to the extent to which trade takes place at preferential tariff rates versus at most favored nation tariff rates. “Preferential trade arrangements” includes both concessional trade arrangements and reciprocal regional trade agreements. Preferential trade arrangements on paper are insufficient if in practice businesses struggle to use them. The research diagnoses how the private sector in Africa is currently using preferential trade arrangements, the constraints they face in doing so, and where support for their use of preferential trade arrangements should be prioritized. It is divided into two main sections: a summary of prior findings on this topic and the results of new primary research. The primary research component is further divided into three subsections of analysis on: transaction-level customs data for a sample of three African countries (Ethiopia, Ghana and Uganda); field-survey data obtained from exporting/importing enterprises in three African countries (Ghana, South Africa and Uganda); and customs trade data for African exports to the European Union and the United States of America.