Rwanda: Lift trade barriers first, Kagame urges Africa
Newtimes
Rwanda: Lift trade barriers first, Kagame urges Africa
May 16, 2006
By Andnetwork .com
President Kagame, who was officially opening the 21st Common Market for Eastern and Southern Africa (COMESA) Council of Ministers meeting at Hotel Intercontinental, said that while Africa is keenly negotiating for a fairer international trade system, it had done little to open up its markets with conducive investment climates and policies.
“We almost exclusively highlight external impediments. For instance we dwell on the lack of market access as well as market-distorting factors such as agricultural subsidies in the developed world,” Kagame, who is the current Chairman of the 20-state regional economic grouping, said.
He added: “But there are more trade constraints than these.”
COMESA member states as well as the rest of Africa and other poor countries have been engaged in protracted trade talks with developed nations through the World Trade Organization (WTO) for the latter to reduce agricultural subsidies to their farmers. Developing countries say these subsides have created international trade imbalances with their exports losing out on Western markets.
Of the twenty states making COMESA only thirteen have joined the bloc’s Free Trade Area, with the latest entrants being Comoros and Libya. Rwanda became part of FTA-under which countries are required to lift tariffs on goods originating from Comesa region-three years ago.
“It makes no sense, therefore, not to pay an even greater attention to overcoming supply-side constraints in our individual members states, in COMESA and, indeed, in Africa in general,” said the President.
He urged COMESA members states to expand and consolidate the COMESA Free Trade Area (FTA); fast track the grouping’s Customs Union and the Protocol on the Free Movement of Persons, Labour and Capital; facilitate cross-border and foreign direct investment; and expedite the ratification of instruments like the COMESA Fund to leverage funding from partners.
The President said the establishment of the COMESA Customs Union, which is slated to come into force in 2008, would increase competition, reduce prices, increase demand, and generally, stimulate production and development.
He urged participants at the two-day meeting to discuss and set the pace for a possible creation of COMESA Oil Stabilizing Fund, with the ultimate goal of engaging oil producing countries to partner with the economic bloc in addressing power shortages.
Challenges remain
Acute power shortage is one of the major economic threats facing the grouping, which was last year joined by Libya-one of the world’s leading oil producing countries. Kagame said a study should be commissioned on the possibility of the oil fund, which he noted, could be followed by consultations with COMESA oil producing countries to “actively engage OPEC and the Gulf Cooperation Council Countries, which are our major suppliers for hydrocarbons.”
However, the President said COMESA states and Africa in general should still pursue fairer trade regimes at the international market, urging member countries not to be distracted by the ongoing trading wrangling between the US and EU.
“We must also vigorously engage the markets especially the United States and trade conflicts between the EU and the US must not steer us off agenda of seeking market access in both,” he said.
According to the economic bloc’s Secretary General, Erastus Mwencha, membership of individual COMESA states to different regional groupings is one of the challenges facing the 25-year old bloc today.
He added that the bloc is also struggling to address the lack of adequate intra-COMESA infrastructure network, which hampers cross-border business. Officials said there is need to mobilize more support from its strategic partners to solve address major problems facing the regional economic community.
The ministerial meeting, which was preceded by a string of preparatory sessions last week, is among others, expected to review and revitalize the functioning of COMESA organs, and set the ball rolling for the commencement of trade in services. The Secretariat will also present before the council a report on staff recruitment and training.
The meeting which was ordinarily supposed to take place from COMESA head offices in Lusaka, Zambia, but switched to Kigali on President Kagame’s request, comes at a time when Djibouti was supposed to take over the chairmanship from Rwanda.
However, months ago, the Horn of Africa nation requested that the eleventh COMESA Heads of State and Government Summit be pushed to between 15th and 16th November, to give it ample time to host the summit at which Rwanda will handover the rotational chair.
