East African Business Week
COMESA, EAC, SADC start merger negotiations
20 June 2011
By David Muwanga
ARUSHA, TANZANIA-Negotiations for the establishment of a grand free trade area by three African regional economic communities are scheduled to start soon following the launching of the process by a Tripartite Summit that ended last week in Johannesburg, South Africa.
The negotiations were launched during the second Tripartite summit that was attended by several heads of State and leaders of delegations who signed the declaration to launch the negotiations for the establishment of the COMESA-EAC-SADC Tripartite Free Trade Area (FTA).
It was held under the theme "Deepening Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADC) (COMESA-EAC-SADC) Integration,".
The purpose of the negotiations is to create a free trade zone that would integrate three overlapping trade pacts including the COMESA, the EAC and SADC.
The leaders adopted the roadmap for establishing the free trade area that would cover 26 countries with a combined economy estimated at $875b and a total GDP of approximately $1trillion.
It is aimed at enhancing Africa’s connectivity to reduce costs of doing business while increasing investment flows to address capacity constraints.
"We committed to having two phases of negotiations," South Africa’s Trade Minister Rob Davies told a media briefing in Johannesburg.
"The first of these involves getting agreement on trade in goods and the removal of tariff barriers. This process will involve the participation of the business community," he told AfP.
"The time-frame for this is three years."
He said the second phase, for which he did not give a time-frame, would focus on trade in services and intellectual property.Davies said membership in the new bloc would not mean changing existing agreements.
"That is the difference between a free trade zone, which does not obligate one to renegotiate existing trade agreements, and a customs union, that does," he said.
He also said it was "wildly premature" to talk about a common currency for Africa.
The leaders said in the communiqué that the region makes up half of the African Union (AU) in terms of membership and just over 58% in terms of contribution to GDP and 57% of the total population of the African Union.
"The establishment of a Tripartite Free Trade Area will bolster intra-regional trade by creating a wider market, increasing investment flows, enhancing competitiveness and developing cross-regional infrastructure," they noted.
A communique read by the EAC Secretary General Amb. Richard Sezibera said the leaders also adopted the Tripartite FTA negotiating principles, processes and institutional framework and also directed that a programme of work and roadmap be developed on the industrialization pillar.Namibian President Hifikepunye Pohamba and Chairperson of COMESA, EAC and SADC Summits of Heads of State and Government respectively reiterated the commitment of the three Regional Economic Communities to the tripartite cooperation and integration process. The Summit also reviewed the progress made in the implementation of the decisions of the first summit held in Uganda in October 2008, on trade, customs and economic integration, free movement of business persons and infrastructure.
The summit invited the development partners to support the Aid for Trade programme being developed for the other major corridors and in particular the Tripartite and Inter-Governmental Authority on Development (IGAD) Infrastructure Investment Conference to be held in Nairobi, Kenya on September 29 and 30, 2011 at which priority projects for these corridors will be presented as well as the maritime corridors.
South African President Jacob Zuma, noted that he looked forward to the continuation of the rationalisation and deepening of the integration process in Africa.
Sezibera said that the Summit adopted a developmental approach to the Tripartite Integration process that will be anchored on three pillars of market integration based on the Tripartite Free Trade Area (FTA), infrastructure development to enhance connectivity and reduce costs of doing business as well as industrial development to address the productive capacity constraints.
He said they agreed that the tripartite initiative is a decisive step to achieve the African vision of establishing the African Economic Community envisioned in the Lagos Plan of Action and the Final Act of Lagos of 1980.
It is also envisioned in the Abuja Treaty of 1991 as well as the resolution of the African Union Summit held in Banjul the Gambia in 2006 that directed the African Union Commission and the Regional Economic Communities (RECs) to harmonize and coordinate policies and programmes of RECs as important strategies for rationalization; and put in place mechanisms to facilitate the process of harmonization and coordination within and among the RECs.