Grand FTA to be launched in December

 

Africa’s long-standing vision is an integrated, prosperous and united continent. This vision will come closer to reality in December when the largest integrated market covering 26 countries in eastern and southern Africa is established.

Commonly known as the Tripartite Free Trade Area (TFTA), the integrated market will comprise the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADC).

The establishment of a single and enlarged market is expected to boost intra-regional trade and deepen regional integration through improved investment flows and enhanced competition.

In fact, this integrated arrangement will create a combined population of some 625 million people covering half of the member states of the African Union (AU) and a Gross Domestic Product of about US$1.2 trillion.

According to a statement released by COMESA, which is spearheading the implementation process as chair of the Tripartite Taskforce, the proposed Grand FTA will be launched in December during a Tripartite Summit to be held in Egypt.

This follows a series of intense consultations and negotiations that have been going on since 2008 when the three regional economic communities made a commitment to jointly work together in regional integration during their historic summit held in Kampala, Uganda.

The commitment shown by the three economic communities has now proved fruitful as the Grand FTA is within sight and becoming a reality.

Meeting in Bujumbura, Burundi on 24-25 October, the Tripartite Sectoral Committee of COMEA-EAC-SADC ministers agreed to launch the Grand FTA in December, saying the region is now ready for an integrated market.

“The decision to launch the Tripartite FTA took into account the fact that the majority of the Tripartite Member/Partner States have made ambitious tariff offers and were agreed on Rules of Origin to be applied in the interim while further work continues on product specific Rules of Origin,” COMESA Executive Secretary, Dr Sindiso Ngwenya, who is also the chairperson of the COMESA-EAC-SADC Tripartite Taskforce said in a statement.

According to the roadmap developed by the three regional economic communities in June 2011 in Johannesburg, South Africa, the Grand FTA was expected to have been established in June 2014.

However, this was not possible due to a combination of factors including limited financial resources, as well as dragging negotiations over some major sticking points such as agreement on the rules of origin, trade remedies and dispute settlement, customs co-operation, documentation procedures and transit instruments.

Negotiations for the TFTA have been conducted in three different phases namely the preparatory phase, phase one and phase two.

The preparatory phase mainly covered the exchange of all relevant information including tariffs including applied national tariffs as well as trade data and measures.

Phase one of negotiations covered core FTA issues of tariff liberalisation, rules of origin, customs procedures and simplification of customs documentation, transit procedures among other issues.

Facilitating movement of business persons within the region was negotiated in parallel with the first phase.

The last stage of negotiations, which is phase two, deals with trade in services and trade related issues including intellectual property rights and trade development and competitiveness.

Negotiations under this phase are currently on-going and nearing completion in time for the historic launch of the Grand FTA in December.

Plans to establish Africa’s largest integrated market are being followed keenly by the AU and other regional economic communities on the continent that want to learn from this experience.

Under the African Economic Community Treaty signed in 1991, Africa aims to establish a continent-wide FTA and the pending single market is regarded as one of the building blocks for the continental target.

Therefore, once operational, the TFTA will be used as a benchmark for deeper regional and continental integration in Africa.

In fact, the AU Commission considers the tripartite arrangement as a “best practice” that other regional communities should emulate towards the realisation of Africa’s vision of an integrated, prosperous and united continent.

“The COMESA-EAC-SADC Tripartite arrangement represent best practice that the other RECs are encouraged to emulate in order to accelerate the harmonisation of their programmes and activities,” reads part of the latest report on the Status of Integration in Africa released by the AU Commission. 

The benefits of the Grand FTA are many. For example, its establishment will resolve the longstanding overlapping membership conundrum, which has presented challenges for the three communities in their quest towards accelerating integration.

Technically, a country cannot belong to more than one customs union, yet the three communities have either already established or are working towards creating their unions.

The ultimate launch of the enlarged FTA will result in the three sub-regions coalescing into a single FTA with the goal of establishing a single Customs Union in the near future.

Thus, the tripartite agreement is not a new legal structure neither is it a new regional economic community.

Rather it is an attempt to merge the different regional organisations into the African Economic Community.

The creation of an enlarged market would also promote the movement of goods and services across borders as well as allowing member countries to harmonise regional trade policies to promote equal competition.

Removal of trade barriers such as huge export and import fees would enable countries to increase their earnings, penetrate new markets and contribute towards their national development.

SADC chair, President Robert Mugabe of Zimbabwe said at the 34th SADC Heads of State and Government Summit held in the resort town of Victoria Falls in August that the region and the rest of the African continent have a lot to benefit from this new trade arrangement.

“The prospects of an expanded market and the exploitation of our comparative advantage within the tripartite arrangement, can only stimulate intra-Africa trade and lend itself to a multiplier effect on our earnings,” he said.

COMESA, EAC and SADC led by their respective executive secretaries Ngwenya, Dr Richard Sezibera, and Stergomena Tax have all pledged to make the tripartite arrangement a success.

The launch of the Grand FTA is regarded as the first phase of implementing a developmental regional integration strategy that places high priority on infrastructure development, industrialisation and free movement of business persons. ‑ Sardc

November 2014
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