Domestic and Foreign Market Access

Overview: Trade Policy and Business Environment

 The Republic of Chad is classified as a low income country, which was ranked last out of 132 countries in the World Economic Forum (WEF) Enabling Trade Index 2012, which measures institutions, policies and services to facilitate trade in countries. Over the last decade, Chad has been faced with recurrent conflict that has led to a vulnerable and unstable business environment. Access to trade finance, burdensome procedures and corruption at the borders as well as unsuitable production technology and skills are the most problematic factors faced by exporters. As part of Central Africa, where the overall infrastructure network is weak, the production capacities and regional trade of Chad are negatively influenced. Yet, in 2012 GDP growth rebounded to 7.2 per cent followed by more modest but stable growth of 4 per cent in 2013, fuelled by strong exports in the oil and agriculture sectors (WTO 2011; WEF 2012; IMF 2013).

African Development Bank, 2012, African Economic Outlook (Chad)
IMF, 2013, Statement at the Conclusion of and IMF Mission to Chad
WEF, 2012, Global Enabling Trade Report
WTO, 2012, Tariff profile (Chad)

Domestic Market Access The pillar assesses the level and complexity of a country’s tariff protection as a result of its trade policy. This component includes the effective trade-weighted average tariff applied by a country, the share of goods imported duty free and the complexity of the tariff regime, measured through tariff variance, the prevalence of tariff peaks and specific tariffs, and the number of distinct tariffs. 134 2.94
Foreign Market Access The pillar assesses tariff barriers faced by a country’s exporters in destination markets. It includes the average tariffs faced by the country as well as the margin of preference in destination markets negotiated through bilateral or regional trade agreements or granted in the form of trade preferences. 51 3.06
Tariff rate (%) This indicator is calculated as a trade-weighted average of all the applied tariff rates, including preferential rates that a country applies to the rest of the world. The weights are the trade patterns of the importing country’s reference group (2012 data). An applied tariff is a customs duty that is levied on imports of merchandise goods. 131 14.57
Complexity of tariffs , index 1-7 (best) This indicator is calculated as the average of the following indicators: Tariff dispersion, Specific tariffs and Number of distinct tariffs. See description of each individual indicator for more details. Prior to averaging, values for each indicator were transformed to a 1–7 score, using the min-max method. 27 6.59
Tariffs dispersion (standard deviation) This indicator reflects differences in tariffs across product categories in a country’s tariff structure. The variance is calculated across all the tariffs on imported merchandise goods, at the 6-digit level of the Harmonized Schedule. 92 9.47
Tariffs peaks (%) This indicator is the ratio of the number of tariff lines exceeding three times the average domestic tariff (across all products) to the MFN (most-favoured nation) tariff schedule. The tariff schedule is equal to the total number of tariff lines for each country. These tariffs are revised on a yearly basis. 1 0.00
Specific tariffs (%) This indicator is the ratio of the number of Harmonized System (HS) tariff lines, with at least one specific tariff, to the total number of HS tariff lines. A specific tariff is a tariff rate charged on fixed amount per quantity (as opposed to ad valorem) 1 0.00
Number of distinct tariffs This indicator reflects the number of distinct tariff rates applied by a country to its imports across all sectors. 19 5.00
Share of duty-free imports (%) Share of trade, excluding petroleum, that is imported free of tariff duties, taking into account MFN tariffs and preferential agreements. Tariff data is from 2013 or most recent year available and imports data is from 2012 135 0.94
Tariffs faced (%) This indicator is calculated as the trade-weighted average of the applied tariff rates, including preferential rates that the rest of the world applies to each country. The weights are the trade patterns of the importing country’s reference group (2012 data). A tariff is a customs duty that is levied by the destination country on imports of merchandise goods 33 5.17
Index of margin of preference in destination markets, 0-100 (best) This indicator measures the percentage by which particular imports from one country are subject to lower tariffs than the MFN rate. It is calculated as the average of two components: 1) the trade-weighted average difference between the MFN tariff and the most advantageous preferential duty (advantage score), and 2) the ratio of the advantage score to the trade-weighted average MFN tariff level. This allows capturing both the absolute and the relative margin of preference. 56 35.09
Source : World Economic Forum, Global Enabling Trade Report 2014

Trade Policy and Market Access

 Chad is a member of the main regional economic communities: the Central African Economic and Monetary Community (CEMAC), the Economic Community of Central African states (ECCAS) and the Community of Sahel-Saharan States (CEN-SAD). The overlapping of these regional economic communities with differing levels of liberalization in their respective domestic markets imposes constraints on harmonisation and alignment. Chad adopts the CEMAC common external tariff (CET), and its simple average MFN rate in 2013 was 18.1 per cent. However, Chad introduced few exceptions to the CET, to which 58 percent higher tariffs (than the CET) are applied. Chad applies customs duty to products imported from non-CEMAC countries with rates ranging from 5 to 30 per cent. Despite the establishment of the free trade area among CEMAC countries, the level of intra-community trade has remained low; distortion of the CET and numerous non-tariff barriers form impediments to trade in the region. High non-tariff barriers such as overtaxing of goods; random checkpoints along corridors; highway robbers; and the poor state of major highways are also obstacles to intra- regional trade (African Development Bank 2011; U.S. Department of State 2013).

WTO, 2013, Trade Policy Review (CEMAC: Chad)

African Development Bank, 2011, Regional Integration Strategy Paper, 2011-2015

U.S. Department of State, 2013, Investment Climate Statement (Chad)

World Economic Forum, 2012, Global Enabling Trade Report

Standard Compliance and Other Relevant Import/Export Restrictions

 According to the WTO Trade Policy Review, Chad does not have a legal framework for standards and technical regulations nor a member of international standard organizations such as the International Standardization Organization. As the common effort at the regional level, the CEMAC countries signed an agreement creating the Central African Sub-regional Metrology Organization and lunched the CEMAC Regional Infrastructure-Quality Development Project (IQ-CEMAC). Chad is drafting a law to set up a national metrology system within the framework of this project. Concerning sanitary and phytosanitary (SPS) measures, Chad is a party to International Plant Protection Convention, the Codex Alimentarious Commission, and the World Organization for Animal Health. SPS regulations are not yet harmonized within the CEMAC. However, the Regional Food Safety Programme has laid the foundation for the harmonization of the rules, addressing the pesticides as one of phytosanitary measures. The organization for Coordination of the Fight against Endemic Diseases in Central Africa oversees the process of harmonization of national pharmaceutical policies.

WTO, 2013, Trade Policy Review (CEMAC: Chad)