Introduction
The CFA franc is a currency used by 14 countries in West and Central Africa. These countries are part of two different monetary unions, the West African Economic and Monetary Union (WAEMU) and the Central African Economic and Monetary Community (CEMAC). Both unions have implemented trade agreements and customs exemptions to promote economic integration and cooperation among their member states. Additionally, some countries within these unions are exempt from the upcoming currency shifts, which will see the transition from the West African CFA franc to the eco and the Central African CFA franc to a new currency. This essay will discuss the trade agreements and customs exemptions between CFA member countries as a whole and separately between these members. It will also explore which countries of the CFA franc are exempt from the West African shift and which of them are exempt from the Central African shift.
Trade Agreements in CFA Member Countries
The WAEMU and CEMAC have implemented several trade agreements to facilitate trade between their member countries. These agreements are aimed at reducing trade barriers, promoting regional integration, and boosting economic growth. Some of the significant trade agreements within the CFA member countries include:
1. Common External Tariff (CET)
The CET is a tariff system that applies to all goods imported into the WAEMU and CEMAC from non-member countries. The CET aims to promote intra-regional trade by creating a level playing field for all member countries. Under the CET, all imports into the WAEMU and CEMAC are subject to a common tariff rate. This means that member countries cannot impose higher or lower tariffs on goods imported from non-member countries.
2. Protocol on Free Movement of Persons, Right of Residence and Establishment
This protocol allows citizens of member countries to move freely within the region without the need for visas or work permits. The protocol also allows citizens to establish businesses in any member country without restrictions. This agreement has helped to promote economic integration and cooperation between member states by facilitating the movement of people and businesses across borders.
3. Common Transit Procedure (CTP)
The CTP allows goods to be transported across member countries without the need for customs clearance at each border. This means that goods can be transported from one member country to another without being subject to customs duties or other trade barriers. The CTP is an important tool for promoting regional integration and reducing trade barriers between member states.
4. Simplified Customs Declaration (SCD)
The SCD is a simplified customs procedure that allows goods to be cleared through customs quickly and efficiently. The SCD is available for goods that are considered low-risk, such as personal effects and small shipments. The SCD is an important tool for promoting trade between member states by reducing the time and cost associated with customs clearance.
Exceptions to the West African Shift
The West African shift refers to the transition from the West African CFA franc to the eco, a new currency that is expected to be launched in 2027. The eco will be used by members of the WAEMU and the Economic Community of West African States (ECOWAS). However, not all members of the West African CFA franc will be part of the West African shift. Guinea-Bissau, which is a member of the WAEMU, uses the West African CFA franc but is not part of the ECOWAS region. Therefore, Guinea-Bissau will not be part of the West African shift and will continue to use the West African CFA franc.
Exceptions to the Central African Shift
The Central African shift refers to the transition from the Central African CFA franc to a new currency that is expected to be launched in 2021. The new currency will be used by members of the CEMAC, which includes six countries in Central Africa. However, not all members of the Central African CFA franc will be part of the Central African shift. Equatorial Guinea, which is a member of CEMAC, uses the Central African CFA franc but is not part of the Central African Customs and Economic Union (UDEAC). Therefore, Equatorial Guinea will not be part of the Central African shift and will continue to use the Central African CFA franc.
Trade Agreements and Customs Exemptions Between CFA Member Countries
The trade agreements and customs exemptions between CFA member countries are implemented by the WAEMU and CEMAC. These agreements aim to promote economic integration and cooperation among member states by reducing trade barriers and facilitating the movement of people and goods across borders.
The CET is a significant trade agreement that applies to all member countries of the WAEMU and CEMAC. This agreement ensures that all imports into the region are subject to a common tariff rate, which promotes intra-regional trade by creating a level playing field for all member countries.
The Protocol on Free Movement of Persons, Right of Residence and Establishment is another significant trade agreement that allows citizens of member countries to move freely within the region without the need for visas or work permits. This agreement has helped to promote economic integration and cooperation between member states by facilitating the movement of people and businesses across borders.
The CTP is a customs exemption that allows goods to be transported across member countries without the need for customs clearance at each border. This agreement reduces trade barriers between member states by allowing goods to be transported from one member country to another without being subject to customs duties or other trade barriers.
The SCD is another customs exemption that allows goods to be cleared through customs quickly and efficiently. This agreement reduces the time and cost associated with customs clearance, which promotes trade between member states.
Conclusion
In conclusion, the WAEMU and CEMAC have implemented several trade agreements and customs exemptions to promote economic integration and cooperation among their member states. These agreements aim to reduce trade barriers, facilitate the movement of people and goods across borders, and promote intra-regional trade. Additionally, some countries within these unions are exempt from the upcoming currency shifts, which will see the transition from the West African CFA franc to the eco and the Central African CFA franc to a new currency. Guinea-Bissau and Equatorial Guinea, which are members of the WAEMU and CEMAC, respectively, but not part of the ECOWAS region and UDEAC, respectively, will continue to use the West African CFA franc and the Central African CFA franc.
