Deal for free movement of goods and people in Africa stalls for one more year

Business

Namanga border post between Kenya and Tanzania. Negotiations to strike a deal to enable free movement of goods and people from Egypt to South Africa has been extended.. PHOTO | FILE  Nation Media Group

By JAMES ANYANZWA

The Council of Ministers for three blocs on the continent have extended negotiations on contentious issues by one more year, further delaying the much-awaited free movement of goods and services
within the proposed Tripartite Free Trade Area.

The Common Market for Eastern and Southern Africa (Comesa), the East African Community (EAC) and the Southern African Development Community (SADC) countries have failed to agree on critical issues that would allow traders access to an expanded market of over 600 million people. The contentious issues are tariff liberalisation, rules of origin and trade remedies.

However the Council of Ministers at a meeting held in Nairobi two weeks ago resolved to extend the negotiations until June 2017 while giving eight countries that have not signed the agreement until April 2017 to do so.

“The Council of Ministers has agreed to conclude the negotiations in all the outstanding areas by the end of second quarter of 2017,” said Chris Kiptoo, Principal Secretary in Kenya’s Department of Trade. “They also agreed that all countries should sign the TFTA by April 2017, and move faster to ratify the agreement so as to allow it to enter into force.”

So far, only 18 out of the 26 member states have signed the TFTA. They are Uganda, Tanzania, Rwanda, Angola, Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Kenya, Malawi, Namibia, Seychelles, Sudan, Swaziland, Zimbabwe, Zambia and Libya.

The heads of state of Comesa, EAC and SADC countries met on June, 10, 2015 in Sharm El Sheikh, Egypt at the Third Tripartite Summit to officially launch the Comesa-EAC-SADC TFTA.

The agreement requires 14 ratifications to enter into force but, so far, no country has ratified it, according to Tralac, a Swiss government-funded organisation working to develop the trade capacity of East and Southern African countries.

During the meeting, the ministers also underscored the need to focus on infrastructure development as a key pillar for the success of intra-regional trade.

The Tripartite Summit had given partner states 12 months from the launch of the TFTA in June 2015 to conclude outstanding negotiations on rules of origin, trade remedies and tariff offers. 

However, due to a number of challenges faced in the process, the deadline of June 2016 was not met, and the commencement of Phase II negotiations — covering trade in services and other trade related matters — has been delayed pending the conclusion of negotiations on Phase I issues.

The TFTAmember states had agreed that all discussions on the rules of origin be completed by June 2016 while up to 85 per cent of the tariff lines be liberalised, with the remaining 15 per cent  negotiated over five to eight years.

However, it is understood that the discussions have been complicated by South Africa, which is keen on protecting its key markets from competition.

Cautious

South Africa is cautious about opening up its own domestic market and its export markets in Botswana, Lesotho, Namibia and Swaziland, which are members of the Southern African Customs Union (SACU).

Under the TFTA agreement, the members of the three trading blocs agreed to ignore sensitive products and subject them to duty and quota restrictions in order to ensure fair competition.

Among the products earlier listed for protection until 2017 are sugar, maize, cement wheat, rice, textiles, milk and cream, beverages and second-hand clothes.

Negotiations for the establishment of a single market were launched in Johannesburg in June 2011. The move is part of the broader objectives of the African Union to accelerate economic integration of the continent, with the aim of achieving higher economic growth, reducing poverty and attaining sustainable development.

Covering the continent from Cape Town to Cairo, the grand free trade area encompasses 26 countries with a combined population of nearly 625 million people and a total gross domestic product of about $1.2 trillion. The establishment of a Tripartite Free Trade Area is expected to boost intra-regional trade by creating a wider market, increasing investment flows, enhancing competitiveness and developing cross-regional infrastructure.