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trade agreements

International Trade Agreements

The European Union (EU)

EU comprises 28 member states (Austria, Belgium, Bulgaria, Cyprus, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and United Kingdom).

Trade with EU is governed by the interim Economic Partnerships Agreement (EPA) that was signed between EU and four states of the Eastern Southern Africa (ESA) including Mauritius, Madagascar, Seychelles and Zimbabwe in August 2009. The Agreement has been under implementation since May 2012. The second meeting of the EPA EU-ESA implementation committee was held in Mauritius in May 2013. Negotiations for the comprehensive EPA ESA agreement are still on-going.

Under the interim EPA products manufactured in Mauritius qualify for duty-free and quota-free access in the EU market if the products satisfy the rules of origin criteria as laid down in Protocol 1 of the agreement.

Products are considered as satisfying as originating if any of the following conditions are satisfied:

  •  Products are wholly obtained in an ESA state; or
     Products incorporating non-originating materials provided that such materials have undergone SUFFICIENT WORKING or PROCESSING in the ESA state. The sufficient working or    processing that confers originating status is ‘Product Specific’.
     Single transformation for textile and apparel/clothing (i.e fabrics can be imported from an third party sources)

Notes:
1. The Rules of Origin allow for CUMULATIVE TREATMENT on raw materials and semi-finished goods from any EU or any of the 11 ESA member states (Comoros, Djibouti, Eritrea,    Ethiopia, Madagascar, Malawi, Mauritius, Seychelles, Sudan, Zambia, Zimbabwe)
2. Products originating in an ESA State shall benefit preferential access into the EU provided they are accompanied by a MOVEMENT CERTIFICATE EUR 1
3. The EUR 1 certificate in Mauritius is issued by the Mauritius Revenue Authority (MRA), Customs Department.

The Common Market for Eastern and Southern Africa (COMESA)

COMESA consists of 19 member states (Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe).

Established in 1994 ‘as an organisation of free independent sovereign states which have agreed to co-operate in developing their natural and human resources for the good of all their people’, COMESA’s current strategy consists of creating ‘economic prosperity through regional integration’.

A Free Trade Area (FTA) was achieved on 31st October, 2000 with nine member states. Today the FTA consists of 14 member countries (Burundi, Comoros, Djibouti, Egypt, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Sudan, Swaziland, Zambia and Zimbabwe) trading on a duty-free and quota-free basis provided the COMESA Rules of Origin are satisfied, namely:

•  Products should be wholly produced in the country; or
• The CIF value of imported material content should not exceed 60% of the total cost of the materials used in the production of the goods; or
• The local Value Added in the production process should account for at least 35% of the Ex-factory cost of the goods, or
• There is a CHANGE IN TARIFF heading of the goods in the production process, or
• At least 25% value addition, for goods of particular importance to the economic development of the member state (upon prior approval of the COMESA council)

Notes
1. The Rules of Origin allow for CUMULATIVE TREATMENT on raw materials and semi-finished goods from one or more member states
2. Goods should be accompanied by a COMESA CERTIFICATE OF ORIGIN, which is issued by the Trade Division of the Ministry of Industry, Commerce and Consumer Protection
Tripartite Free Trade Area (Forthcoming)

The Tripartite Free Trade Area (TFRA) builds on the FTAs that are already in place in COMESA, EAC and SADC. On 10th June 2015, the COMESA-EAC-SADC TFTA was officially launched at the Third Tripartite Council of Ministers meeting in Sharm-el-Sheikh, Egypt, paving the way for an integrated market of 26 countries with a combined population of 632 million people and a total GDP of USD$ 1.3 Trillion which represents 58% of Africa’s GDP.

The TFTA’s aim is to promote development through increased economic integration of North, East, and South Africa; the project is part of a larger “regional integration strategy that places high priority on infrastructure development, industrialization, and free movement of business persons.” As it currently stands, Africa is the least economically integrated region in the world, as measured by intra-regional trade flows. Trade between African countries, as a share of the continent’s total trade has hovered at 10% for decades; the proportion in Europe and Asia, by contrast, is close to 60%.

The tripartite initiative is a decisive step to achieve the African vision of establishing the African Economic Community envisioned in the Lagos Plan of Action and the Final Act of Lagos of 1980, Abuja Treaty of 1991 as well as the Resolution of the African Union Summit held in Banjul, the Gambia in 2006 that directed the African Union Commission and the Regional Economic Communities (RECs) to harmonize and coordinate policies and programmes of RECs as important strategies for rationalization, increasing intra-Africa trade and investment, integration of tripartite economies in the global economy

The TFTA agreement is made up of 45 Articles and 10 Annexes. Member states were directed to finalise outstanding issues pertaining to tariff liberalisation, disciplines on non-tariff barriers, rules of origin, trade remedies, provision for dispute settlement and other provisions (including elimination of quantitative restrictions, customs cooperation, trade facilitation, transit trade, infant industries, balance of payments, etc.).

According to the roadmap, all negotiations should be completed within 36 months. Thereafter, COMESA-EAC-SADC is expecting to launch a single FTA by 2016, building on the FTAs that are already in place.


The Southern African Development Community (SADC)

SADC comprises 15 member states (Angola, Botswana, DR Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe). The main objective of SADC is to promote Regional Integration and Sustainable Development.
The Southern African Development Community (SADC) Protocol on Trade (1996), as amended in 2010, is one of the most important legal instruments guiding SADC’s work on Trade. It is an agreement between SADC Member States to reduce customs duties and other barriers to trade on imported products amongst SADC Member States. The Protocol envisioned the establishment of a Free Trade Area in the region. During the 28th SADC Summit, held in Johannesburg in August 2008, the Free Trade Area was officially launched by 12 of the 15 SADC Member States. By the beginning of 2008, most customs duties had been eliminated on goods from the participating Member States (i.e. about 85% of goods attained zero duty in January 2008). Angola, Democratic Republic of Congo and Seychelles are yet to join the Free Trade Area.

The SADC Rules of Origin are product-specific whereby each tariff heading is assigned one or several criteria to be fulfilled for origin to be conferred. In order to benefit from preferential treatment on the SADC market, all goods should comply with the rules of origin under the SADC Trade Protocol and must be accompanied by a valid SADC certificate of origin.
The Rules of Origin can be one or a mix of the following types:
  • Wholly produced
  • Change in tariff heading
  • Percentage rule (value addition should be at least 35% of ex-factory price)
  • Two-stage transformation for textile and clothing
The SADC Certificate of Origin is both issued and approved by the Customs Department of the Mauritius Revenue Authority. The online application for the SADC Certificate of Origin is made through a Freight Forwarder or Customs House .

For the Customs Department to approve the Certificate, the following documents must be submitted:
  • SADC Certificate of Origin duly filled
  • Customs Declaration (Export and Import)
  • Export Invoice
  • Appropriate certified costing for value added requirements
  • Any other document as may be required by Customs Department
The SADC FTA confers to Mauritian exporters either duty free access or partial tariff reduction in other SADC Member States, except for Angola, DRC and Seychelles.

Indian Ocean Commission (IOC)

The Indian Ocean Commission (IOC) is an intergovernmental organization created in 1982 in Port-Louis, Mauritius and institutionalized in 1984 by the Victoria Agreement in the Seychelles.
The IOC comprises five countries in the Indian Ocean: Union of the Comoros, France/Reunion Island, Madagascar, Mauritius and Seychelles. Notwithstanding their different characteristics (Reunion is a French department; Mauritius and Seychelles are Middle Income Countries whereas Comoros and Madagascar are amongst the Least Developed Countries), the five islands share geographic proximity, natural resources and common development issues.
The Secretariat of the Commission is located in Mauritius and headed by a Secretary General. The current Secretary General, Mr. Jean Claude de l’Estrac, is a Mauritian national appointed in July 2012 for a four-year mandate. Political and strategic orientations of the organization are under the responsibility of the Council of Ministers which meets annually. The last Council of Ministers was held in Seychelles in January 2013.

The mission of IOC is three-pronged:
   • To strengthen the ties of friendship between the countries
   • Be a platform of solidarity for the entire population of the Indianoceanic region
   • The development, through projects related to sustainability for the region, aimed at protecting the region, improving living conditions of the populations and preserving the very natural resources that the countries depend on
Presently, only Mauritius and Madagascar are granting trade preferences under the IOC trade regime and there are no customs duties for products meeting the IOC rules of origin between the two countries

The rules of origin are applicable under the IOC are as follows:
  • The goods should be wholly produced or obtained in a member state (that is, they should contain no materials imported from outside the common market); or
  • The goods should be produced in the member states and the CIF value of any foreign (that is, non-COMESA) materials should not exceed 60% of the total cost of all materials used in    their production; or
  • The value added resulting from the process of producing the goods from imported materials should account for at least 35% of the ex-factory cost of the goods.
The IOC Certificate of Origin is both issued and approved by the Customs Department of the Mauritius Revenue Authority. The online application for the IOC Certificate of Origin is made through a Freight Forwarder or Customs House Broker via the Trade Net system. More information on the SADC Certificate can be obtained from the Customs Department, Mauritius Revenue Authority.

For the Customs Department to approve the Certificate, the following documents must be submitted:
   • IOC Certificate of Origin duly filled
   • Customs Declaration (Export and Import)
   • Export Invoice
   • Appropriate certified costing for value added requirements
   • Any other document as may be required by Customs

The African Growth and Opportunity Act (AGOA)

The African Growth and Opportunity Act (AGOA) were enacted on 18 May 2000 as Public Law 106 of the 200th congress. AGOA has helped to boost U.S. two-way trade with sub-Saharan Africa and to facilitate sub-Saharan Africa’s integration into the global economy. The main objectives of this legislation are to expand U.S. trade and investment with sub-Saharan Africa, stimulate economic growth, to encourage economic integration, to take appropriate steps to combat corruption, to promote good governance and the rule of law
In 2015, 39 countries, including Mauritius, are eligible for trade preferences under AGOA, benefiting from duty-free exports of more than 6,400 products to the United States — 1,800 more products than the 4,600 offered through the Generalized System of Preferences (GSP) and on June 29th US President Barack Obama signed the extension of the African Growth Opportunity Act until 2025.

Apparel provisions under AGOA are governed by special system defined by the AGOA legislation favoring lesser developed countries under rules of origin requirements.
The preferential market access granted to Mauritius and other African countries through the Africa Growth and Opportunity Act (AGOA) has played a critical role in spurring Mauritius’ exports with the U.S. Total exports to the USA have been on the increasing trend since 2009 to reach Rs 8.1bn in 2014 as shown in the table below. The share of exports to the USA over the total exports of Mauritius also increased from 9% in 2009 to 16% in 2014.
The Textile & Apparel sector has the biggest share in the Mauritian exports to the U.S. and has been following a positive trend since 2008. In 2014, the Textile & Apparel sector accounted for 78% of our exports to the U.S., 6% for the Agro Sector and 16% for other manufacturing as shown below:

BILATERAL TRADE AGEEMENTS

PAKISTAN-MAURITIUS

The Preferential Trade Area (PTA) between Mauritius and Pakistan was signed on 30 July 2007 in Mauritius.
The objective of the PTA is to increase trade between the two countries. Under the PTA, tariff concessions have been granted on a list of products of export interest to both countries, which will allow operators to trade with Pakistan on preferential terms.

TURKEY- MAURITIUS

A Free Trade Agreement (FTA) between Mauritius and Turkey was signed on 9 September 2011 in Istanbul. The agreement entered into force on 01 June 2013. It provides duty-free and quota-free access on all industrial products except for a list of 70 clothing items on which duties will be phased down over a period of 4 years.
With respect to agricultural products, the FTA provides preferential access on a list of some 40 products on a tariff quota basis.

Exports under the Generalised Scheme of Preferences (GSP)

Under GSP Mauritius is a beneficiary for preferential market access, at reduced tariff to several countries, namely, Japan, Norway, Switzerland, USA, and Customs Union between Belarus, Kazakhstan and Russia.