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| 3. Barriers to trade |
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3.1 Tariff and tariff administration measures 3.1.1 Tariff peak Nigeria has high tariffs and tariff peaks. For example, the tariff rate is 98.2 percent for fruit and vegetable products, 89.4 percent for tobacco products, 150 percent for cigars, 75.3 percent for beverages and 42.7 percent for textiles and garments. Since textiles and garments are China's major export items to Nigeria, accounting for 15 percent of China's total exports to Nigeria, such kind of tariff structure has adversely affected the competitiveness of Chinese relevant products on Nigerian market. 3.1.2 Tariff escalation Tariff escalation is used to encourage domestic industry and agriculture in Nigeria. Lower tariffs are applied to imports of basic raw materials and means of production (including production equipment), while industrial products, foodstuff, consumer products and luxury goods are levied a higher level of tariffs. Take textile raw materials as an example. While raw silk, wool and linen are imposed a 15 percent tariff rate, cotton 5 percent, cotton thread and cotton yarn 30 percent-40 percent, finished textile products and garments are imposed a tariff rate over 55 percent-75 percent. The tariff rate is 15 percent for log, 30 percent for dale and plywood, and 100 percent for wooden furniture. Since garments and wooden furniture are the main items of China's exports to Nigeria, such a tariff structure has considerately hindered China's exports of higher- value-added products such as semi-finished or finished products to Nigeria. 3.2 Import restrictions 3.2.1 Import bans On April 6 2005, the Nigerian Ministry of Finance issued a revised list of prohibited import items to replace Notification No.12237/S.25/V/172 released on February 25 2004. The main items subject to import ban are live or dead birds including poultry, pork and pork products, beef and beef products, birds' eggs, flowers, cassava / tapioca products, fresh fruits and dry fruits, corn, sorghum, millet, wheat flour, vegetable fat and oil, confectionery, cocoa products, noodles, biscuits, beverages, beer, bentonite and barite, bagged cement, pharmaceuticals, toothpaste, soap, detergents, mosquito repellent coils, disinfectants, plastic sanitary appliances, household items, toothpick, renovated and second-hand tires, crepe paper and cardboard, textile fabrics, textile products and yarn, all species of footwear and bags, cutlasses, axes, pick axes, spades, shovels and similar tools, second-hand compressors, second-hand air conditioner and second-hand refrigerators/freezers, second-hand automatic vehicles, assembled bicycles and spare parts, wheel barrows, furniture, generator silencers, game players, and ballpoint pens. Among the items listed above, approximately 20 kinds of Chinese products are affected, including textiles, footwear, cases and bags, cement, and ballpoint pens. The import ban has seriously affected China's export to Nigeria. China questions the justifiability of the ban and its consistency with relevant WTO rules, and expresses concerns over Nigeria's frequent making of import bans. 3.2.2 Import licensing Specific licensing requirements remain in place for a number of restricted products, including petroleum products, and generators. Applications to import prohibited goods or restricted products subject to import licenses or permits must be made three months in advance of importation. The quantity allocated to each importer, or to be imported from each country, is stated in individual licenses and permits. The quantity is determined on the merit of each application. However, there is usually a lack of clarity in the dealing of these applications, and has brought uncertainty to China's export to Nigeria. China expresses concerns over this issue. 3.3 Barriers to customs procedures Customs procedures in Nigeria continue to present major obstacles to trade with Nigeria. Importers face inordinately long clearance procedures and high berthing and unloading costs. The Nigeria government currently practices a double inspection system requiring both pre-shipping inspection and 100 percent on-arrival inspection. Cargoes are kept waiting for clearance at the ports, some even delayed for several months. Currently at fastest it takes a week to clear goods, and normally 2 to 3 weeks, far longer than the committed no more than 48 hours. The Nigerian government announced on July 1st 2002 that it would remove the required pre-shipping inspection and adopt the destination inspection system. For many reasons, however, the removal has been delayed so far. Currently, in addition to tariff duties, importers have to pay 7 percent surcharges, 1 percent inspection fee on FOB price, and 0.5 percent fee on CIF price for planning trade liberalization in the West African Economic Community. Moreover, for the importation of sugar, 5 percent sugar tax on CIF price is imposed in addition to duties and for the importation of automobiles and auto parts, 2 percent National Automobile Commission fee on CIF price is collected. Moreover, the port authorities collect certain port service fee, depending on the category of products. These tax burdens have, to some extent, hindered normal trade. China expresses great concern over this issue. Nigeria requires that all imported products must be inspected by the third-party inspection agencies appointed by the go vernment, and also authorizes them to carry out the customs valuation. Chinese enterprises have complained that these inspection agencies often deliberately create difficulties for enterprises, and evaluate imported products arbitrarily. It has seriously undermined the interests of Chinese enterprises. 3.4 Technical barriers to trade The WTO TBT Notification (No.G/TBT/N/NGA/1) issued on February 8, 2005, said that SONCAP certification would become mandatory for importing products such as electrical products, certain auto products and toys. SONCAP is a series of conformity assessment and certification procedures applied to certain categories of controlled products exported to Nigeria. Controlled products must meet the technical standards and regulations of Nigeria or other sanctioned international standards before loading. This measure was scheduled for implementation as of March 1, 2005. According to the conformity assessment procedures, products that are incompatible with the standards set by Nigeria will no t be able to pass Nigeria Customs. According to statistics, in 2004, China's export of the products involved in the conformity assessment list to Nigeria reached US$400 million, and more than 70 enterprises exported over US$ 1 million. Only one organization, INTRTEK, has been appointed to conduct the SONCAP certification. Chinese enterprises have complained that the certification fee charged by INTRTEK is quite high, especially for enterprises exporting small parts. Through representations made by the competent Chinese authorities, Nigeria decided to postpone the previously settled date of April 16 2005 to July 16 2005 for implementing the mandatory conformity assessment procedures. China will pay close attention to the development of this issue, as well as its impact on related Chinese products. 3.5 Export restrictions In Nigeria, the following products are banned from export: corn, raw hides and skin, wood in rough (excluding furniture component, railway slippers, floor and ceiling tiles, doors, windows and pallets), raw palm kernels, unprocessed rubber and rubber lumps. China questions the justifiability of the ban and expresses concern over its inconsistency with WTO rules. |
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