Liberia - Trade Agreements Liberia - Trade Agreements
Liberia has bilateral and multilateral agreements with a number of countries, including the United States. The Ministry of Commerce and Industry (MOCI) is the designated authority that facilitates duty-free quotas and free trade across Liberia’s borders. Liberia has three trade and investment agreements with the United States, under which the country enjoys duty-free and preferential trade benefits. They include the African Growth and Opportunity Act (AGOA), a Trade and Investment Framework Agreement (TIFA), and the Generalized System of Preferences (GSP). Together, these agreements provide duty-free access to about 6,800 products exported from eligible African countries to the United States. Liberia’s main exports to the United States are rubber, wood, art and antiques, palm oil, and diamonds, and the U.S. exports to Liberia include agricultural products (with rice as the leading category), vehicles, machinery, textiles, and optical and medical instruments. Along with other ECOWAS member states, Liberia has a free trade agreement – an Economic Partnership Agreement (EPA) – with the EU, which will gradually open 75 percent of the EU market to ECOWAS countries. It also has a comprehensive timber trade agreement – Voluntary Partnership Agreement (VPA) – with the EU, which aims to control illegal logging and improve forest sector governance.
Liberia and China have agreed on a bilateral trade agreement which grants duty-and quota-free access of 99 percent of goods from Liberia to China. However, the agreement has not yet been used as Liberia currently does not export any goods other than iron ore to China. The MOCI has institutionalized duty-free stamps for the EU under the “Everything But Arms” agreement, and for China under a “Preferential Trade Agreement” with the least developed countries (LDCs). All of these preferential trade and investment agreements, like regional trade agreements including ECOWAS, are linked to cumbersome rules of origin and other non-tariff barriers to trade (NTBs) which make it difficult for Liberian businesses to exploit the opportunities offered. To date, Liberian businesses have rarely been able to export under preferential trade agreements.
On December 16, 2015, Liberia acceded to the WTO, paving the way for the government to standardize its trade and investment laws and regulations consistent with internationally acceptable norms. Liberia became the 163rd member of the WTO in July 2016, and the government continues to streamline its compliance status by standardizing its trade laws, regulations, and policies. The Liberia National Trade Policy reiterates the government’s commitment to remaining compliant with the WTO protocols, with emphasis on promoting private sector growth. The government has enacted laws, such as the Small Business Empowerment Act, Competition Law, Intellectual Property Law, Foreign Trade Law, Insolvency Law, and Special Economic Zones (SEZ) Act, to ensure Liberia business and investment climates are consistent with international norms. These instruments aim to increase Liberia’s trade capacity and infrastructure, harmonize its trade regime, provide a blueprint for industrial development, and connect the country to global markets. Find more details on Liberia’s WTO accession. Liberia is ideally situated to have easy access to the growing ECOWAS markets of about 300 million consumers, but its total regional trade volume is low due to poor transportation infrastructure and inadequate trade instruments.