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Regional blocs to launch Free Trade Area by 2012

Zimguardian | Nov 25, 2009

Regional blocs to launch Free Trade Area by 2012

Written by BUSINESS EDITOR National

THREE regional trading blocs — the Common Market for East and Southern Africa (Comesa), East African Community (EAC) and the Southern African Development Community (Sadc) — plan to launch a Free Trade Area by 2012.

The Tripartite FTA would be underpinned by robust infrastructure programmes designed to consolidate the regional market through interconnectivity facilitated by all modes of transport and telecommunications in order to promote competitiveness.

Comesa secretary-general, Sindiso Ngwenya, EAC representative Ambassador Juma Mwapachu and Sadc secretary-general Dr Tomaz Salomao met on 9 November this year in Dar es Salaam where a common document was produced for consideration by individual member States in preparation for the next meeting of the Tripartite Summit.

The FTA will cover the promotion of customs cooperation and trade facilitation, at regional and tripartite level from early 2010 up to June 2011.

“Member states will use this period to carefully work out the legal and institutional framework for the single FTA using the draft documents as a basis.

“It is expected that each organisation will discuss the tripartite documents, and that the tripartite meetings at various levels will deliberate and reach concrete recommendations,” said Comesa.

Comesa said by June 2011, there should be a finalised agreement establishing the Tripartite FTA, ready for signature in July 2011.

When signed, member states would have about six months up to December 2011, to finalise their domestic processes for approving the agreement and for establishing the required institutions and adopting the relevant customs and other documentation and instruments.

It is proposed that once this process ends, the Tripartite FTA should be launched in January 2012.

“Throughout the preparatory period, strong sensitization programmes will be mounted for the public and private sectors and all stakeholders including parliamentarians, business community, teaching institutions, civil society, and development partners,” said Comesa.

The FTA seeks to establish a tariff-free, quota-free, exemption and coordination of industrial and health standards, combating of unfair trade practices and import surges, use of peaceful and agreed dispute settlement mechanisms.

It also promotes the use of simpler and straightforward rules of origin that recognise inland transport costs as part of the value added in production, relaxation of restrictions on movement of business persons taking into account certain sensitivities, liberalisation of certain priority service sectors on the basis of existing programmes of the three organisations.

“The FTA will promote value addition and transformation of the region into an information and knowledge-based economy through a balanced use of intellectual property rights and information and communications technology, development of the cultural industries on the basis of the rich cultural heritage in the region particularly in the arts, development of sector strategies to increase productive capacity and link producers to buyers and consumers,” reads part of the report by Comesa.

The tripartite FTA will provide a much larger market, with a single economic space, than any one of the three regional economic communities and as such will be more attractive to investment and large-scale production.

Estimates are that exports among the 26 countries expected to be members of the FTA export volumes within the regions increased from US$7 billion in 2000 to US$27 billion in 2008, and imports grew from US$9 billion in 2000 to US$32 billion in 2008.

This phenomenal increase was in large measure spurred by the free trade area initiatives of the three organizations.

Besides, the Tripartite economic space will assist to address some current challenges resulting from multiple membership by advancing the ongoing harmonisation and coordination initiatives of the three organisations to achieve convergence of programs and activities, and in this way will greatly contribute to the continental integration process.

However, there is a possibility that a few countries might wish to consider maintaining a few sensitive products in trading with some big partners, and for this reason, provision has been made for the possibility of a country requesting for permission to maintain some sensitive products for a specified period of time.

 source: Zimguardian