Domestic and Foreign Market Access

Overview: Trade Policy and Business Environment

The Republic of Liberia is classified as a low-income country, which is transitioning from post-conflict reconstruction to long-term economic development with an ambitious vision of achieving middle-income status by 2030. The country has focused on reconstructing critical infrastructure and maintaining peace, which have resulted in significant success and reforms; however, Liberia's private sector led economic growth is still lagging. The country set up the medium term economic growth and development strategy between 2012 and 2017 that addresses energy and roads infrastructure deficit; micro risks including clarity and security of property rights; difficulties for new activities to emerge that need different inputs and skills than those available; and limited access to credit, especially long term.

Liberia applied for an accession to the WTO in 2007. The accession process has taken place rather slowly because it is a Least Developed Country (LDC) in which the economy was impaired by the long-lasting civil war. Several trade-related technical assistance and capacity-building programmes have been undertaken through, for example, the WTO’s Enhanced Integrated Framework (EIF) and the African Development Bank. In 2012, Liberia’s average MFN applied tariff was 10.2 per cent. Agricultural exports into the country (10.7 per cent) were slightly higher compared to non-agricultural exports (10.1 per cent). In order to align with the regional common external tariff and the WTO accession requirements, the country is expected to lower tariffs and eliminate non-tariff barriers. Liberia is a member of the Economic Community of West African States (ECOWAS) and the Mano River Union (MRU) but its trade with regional markets is below the average for the sub-region mainly due to infrastructure deficits and trade policy (African Development Bank 2013). Since 2011, Liberia has attained preferential market access to the U.S. market through the African Growth and Opportunity Act, and to the EU market through the Voluntary Partnership Agreement.

African Development Bank, 2013, Liberia Country Strategy Paper 2013-2017
Ministry of Planning and Economic Affairs of Liberia, 2012, Agenda for Transformation
U.S. Commercial Service, 2013, Doing Business in Liberia: 2013 Country Commercial Guide for U.S. Companies
WTO,2012, Tariff Profile (Liberia)

INDICATOR, UNITS RANK/132 SCORE
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. 129 3.31
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. 136 1.14
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. 113 10.91
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. 55 6.30
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. 37 7.25
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. 55 1.20
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) 86 1.85
Number of distinct tariffs This indicator reflects the number of distinct tariff rates applied by a country to its imports across all sectors. 79 121.00
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 136 0.01
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 138 13.42
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. 128 4.63
Source : World Economic Forum, Global Enabling Trade Report 2014

Standard Compliance and Other Relevant Import/Export Restrictions

Although the country benefits from preferential market access schemes such as the African Growth and Opportunity Act, the country needs to develop capacity to meet quality and safety requirements in order to take advantage of export opportunities. The Liberian government opened the National Standards Laboratory (NSL) in 2011 to meet the requirements under Agreement on Technical Barriers to Trade and Agreement on the Application of Sanitary and Phytosanitary (SPS) Measures. The government is also testing a calibration facility for food and non-food products. As the food safety, animal and plant health system in Liberia has been weak, the laboratory has put a focus on enhancing the SPS system in Liberia by preventing importation of counterfeit and sub-standards goods that may threaten public, animal, or plant health as well as assuring food and agriculture products to meet international standards (U.S. Commercial Service 2013). 

Ministry of Commerce and Industry of Liberia, 2013, Overview of the National Standards Laboratory

U.S. Commercial Service, 2013, Doing Business in Liberia: 2013 Country Commercial Guide for U.S. Companies