$1 trillion 'grand' Africa tripartite Free Trade Area 'to beat 2016 schedule'

The SADC-EAC-Comesa deal would create the continent's largest integrated market yet as negotiations pick up.

NEGOTIATIONS to set up a “grand” free trade zone encompassing 26 countries in eastern and southern Africa are on course and may be completed in 2015, a year before schedule, Southern African Development Community (SADC) officials, revealed.

The Tripartite Free Trade Agreeement (Tripartite FTA), being negotiated among SADC, the Common Market for Eastern and Southern Africa (Comesa), and the East African Community (EAC), is expected to benefit 600 million people in 26 African countries—half of the African Union (AU) members—with a combined domestic product of about $1 trillion.

Once in effect, the FTA will create Africa’s largest integrated market so far.

SADC Director of Trade, Industry, Finance and Investment, Boitumelo Gofhamodimo  on the eve of the SADC Heads of States and Governments Summit that was set for this weekend at the Zimbabwean resort town of Victoria Falls said that southern Africa was ready for the establishment of the FTA.

“We expect to conclude the negotiations by end of the year,” Gofhamodimo said. “It is one arrangement which is very important in boosting trade and deepening integration.”

Gofhmodimo said apart from offering a bigger market, the FTA allows countries in eastern and southern Africa to harmonise their trade policies.

SADC executive secretary Stergomena Lawrence Tax said if everything goes well, the FTA could be launched in 2015.

According to a roadmap adopted by COMESA-EAC-SADC in 2011, the FTA was initially expected to come into force by 2016. Negotiations in the second of the three phrases are set to start and will focus on issues like trade in services and trade-related issues such as intellectual property rights, competition policy and trade development and competitiveness.

Parties are wrapping up the first phrase talks which touch “core FTA issues” such as tariff liberalisation, rules of origin, customs and transit procedures, non-tariff barriers and other obstacles to trade and dispute resolution, according to the Southern African Research and Documentation Centre (SARDC), a regional research body.

Kizito Sikuka, a researcher at the SARDC, said the launch of the enlarged FTA will result in the three sub-regions coalescing into a single area with the goal of establishing a single Customs Union.

“Intra-regional trade in this part of Africa is expected to increase sharply and deepen regional integration through improved investment flows and enhanced competition,” he said. He added that 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.

The SADC, meanwhile, is consolidating its own FTA which covers all but three SADC member states—Angola, Democratic Republic of Congo and Seychelles.

‘Sensitive products
The SADC FTA was launched in 2008, but maximum liberalisation among participating member states was only realised in 2012 when tariffs on sensitive products were removed.

Gofhamodimo said that Seychelles was now ready to join the SADC FTA after its offer to remove all tariffs on goods to promote the smooth movement of goods and services across the region.

“Although not so big, regional trade (among the 12 SADC FTA members) has increased from $13.8 billion in 2000 to $58 billion in 2012,” he said.

In the SADC region, South Africa is the largest trading partner, with its exports to the region accounting for 40% of total intra-regional trade. Other major exporting countries include Angola, Zambia and Zimbabwe.

Officials also hope the tripartite FTA would address the issue of overlapping membership of countries in the Comesa, EAC and SADC.

Zambia, Zimbabwe, Malawi, Mauritius, for example, belong to both Comesa and SADC, while Kenya, Uganda, Rwanda, and Burundi belong to both EAC and Comesa.

The SADC had missed its target to launch a customs union in 2010, and is likely to miss other integrated market targets like a common market by 2015, a monetary union by 2016 and a single currency by 2018.

Multiple bloc membership is blamed for the missed targets, and the grand FTA is seen as a solution to this. (Xinhua)

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