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Mr. Charalambos G Tsangarides and Mr. Jan Kees Martijn

forward. The June 2005 summit of the CEMAC Heads of State in Malabo confirmed the need for improved implementation of the CEMAC trade regime. Several recent initiatives concerning external trade provide new challenges and opportunities for welfare-enhancing reforms. First, the 2003 workshop suggested reducing the number of CET rates from four to three, while lowering the top rate from 30 percent to 20 percent, in line with the WAEMU regime. The importance of external liberalization was reaffirmed by the IMF’s Managing Director in a March 2006 speech. 2 CEMAC

Mr. Charalambos G Tsangarides and Mr. Jan Kees Martijn
This paper provides an update on the main elements of the reform agenda concerning the CEMAC trade regime as well as a tentative quantitative assessment of selected effects on tariff revenues and trade patterns. Notwithstanding data limitations, the key messages from the analysis are as follows. First, there is a need for a renewed political commitment to regional integration. In addition, key measures for improving compliance with the requirements for a customs union need to be introduced, including limiting tariff exemptions, phasing out remaining surcharges, strengthening the determination of products' country origin, and enhancing customs administration. There is also a need to improve transportation infrastructure and organization. Finally, there is a strong case for tariff reduction, with or without an EPA. Trade liberalization would help boost economic growth and poverty alleviation and limit risks of trade diversion with an EPA. Tariff reform should be complemented by improvements in domestic revenue mobilization.
International Monetary Fund
The creation, in 1994, of the Central African Economic and Monetary Community (CEMAC) customs union was a major step in the regional integration process in central Africa. The implementation of the agreed regime by the member countries, however, has remained unsatisfactory. A 2002–03 initiative to improve policy implementation has largely stalled. Several recent initiatives concerning external trade provide new challenges and opportunities for welfare-enhancing reforms. Although the 1994 reforms that created the CEMAC customs union were a major step forward, the trade regime remains plagued by poor implementation.
International Monetary Fund
The government of Cameroon adopted its first Poverty Reduction Strategy Paper (PRSP) to define the overall framework for its development policies. To adjust the overall objectives and address the weaknesses of the first PRSP, a new comprehensive framework, Cameroon's Strategy for Growth and Employment (DSCE), was adopted that focuses mainly on infrastructure and rural development. The DSCE aims to strengthen the macroeconomic framework, the link between DSCE, MTEF, and the annual budgets, and the implementation of governance and anticorruption programs, and also to ensure adequate resources for structural reforms.
Ms. Maria-Angels Oliva

Front Matter Page Policy Development and Review Authorized for distribution by Thomas Dorsey Contents I. Introduction II. Congo and the CEMAC Zone: An Overview III. CEMAC Trade Regime IV. Congo’s Trade Regime: Theory and Practice V. Congo’s Trade Regime and Revenue Collection VI. Regional Integration and other Partnerships VII. Policy Recommendations: Trade Reform and Growth Reference Tables 1. CEMAC’s Tariff Code: Summary of Main Instruments 2. The Common External Tariff by Regional Agreement 3. The Use of Non

International Monetary Fund

lost momentum, even though some of the actions identified in the roadmap have still moved forward. The June 2005 summit of the CEMAC Heads of State in Malabo confirmed the need for improved implementation of the CEMAC trade regime. 4. Several recent initiatives concerning external trade provide new challenges and opportunities for welfare-enhancing reforms. First, the 2003 workshop had also suggested reducing the number of CET rates from four to three, while lowering the top rate from 30 percent to 20 percent, in line with the WAEMU regime. The importance of

Mr. Jan Kees Martijn

proposed road map for further reform. These efforts were supported by the EU, France, and the World Bank. However, since then the initiative has lost momentum, even though some of the actions identified in the road map have still moved forward. The June 2005 summit of the CEMAC heads of state in Malabo, Equatorial Guinea, confirmed the need for improved implementation of the CEMAC trade regime. Several recent initiatives concerning external trade provide new challenges and opportunities for welfare-enhancing reforms. First, the 2003 workshop suggested reducing the

Ms. Maria-Angels Oliva
Congo's vital dependence on trade for development stands in contradiction with its trade policy. As a member of the CEMAC, Congo's tariff scheme at least formally is guided by CEMAC's 1994 trade regime agreement. This paper shows CEMAC's customs code is restrictive relative to that of comparable regional integration groups. The paper also discusses a number of quantitative and qualitative barriers to trade applied by Congo that render its current regime complex, nontransparent, and relatively unpredictable, compromising efforts to develop the non-oil sector and the country's export base. Moreover, Congo's high tariffs and other taxes have not led to higher fiscal revenues, as the number of exemptions granted in recent years has surged and customs administration remains weak.
International Monetary Fund

2008. 17. In this regard, needed trade reforms are envisioned, such as the establishment of an export promotion agency, improvements in distribution networks, and a simplification of international trade regulations and processes. However, the DSCE falls short of recognizing the main impediments of the CEMAC trade regime (such as high and dispersed external tariffs) and of signaling a clear willingness to foster greater liberalization. For instance, the strategy does not provide a clear indication of moving away from a system of free trade zones and exemptions. The

Ms. Maria-Angels Oliva

improvements, among others (see, for example, Eifert et al 2005 ). III. CEMAC T rade R egime There are strong arguments for reforming CEMAC trade policies . Back in 1994, the CEMAC agreements were seen as a step forward towards trade liberalization. Today, the consensus is that the framework, while not having been fully implemented, lags well behind many other regional initiatives. In June 2005, at a summit in Malabo, Equatorial Guinea, CEMAC Heads of State seconded calls for progress in implementing and reforming the CEMAC trade regime. This message was