One Year Tripartite

Posted on Posted in Economy, Trade Agreements

A year has passed since the Heads of States and Government of the three economic blocs COMESA , SADC and the East African Community met in Sharm El- Sheikh on the 10th of June 2015 for signing and launching the strongest and largest continental alliance through a free trade agreement between the three blocks. The Journey to this glory started in the First Tripartite Summit on the 22nd of October 2008 and a Memorandum of Understanding on Inter-regional Cooperation and Integration amongst COMESA, EAC and SADC was signed between the CEOs of the three blocks. Further to that, the Second Tripartite Summit on the 12th of June 2011 launched the negotiations for the establishment of the Tripartite Free Trade Area.

After four years of tough negotiations the agreement was finally signed by 16 Member states in Egypt – Sharm El Sheikh. The signing of the agreement in Egypt emphasized the pivotal role that Egypt plays in the African Continent and proved the keenness of Egypt to have an important part in the regional integration agenda. The Tripartite initiative by COMESA-SADC- EAC emerged to contribute to the accomplishment of a larger vision of establishing an African Economic Community as outlined in the 1980 Lagos Plan of Action and the Abuja Treaty of 1991. The idea was to resolve the issue of overlapping memberships of countries in more than one economic bloc. Accordingly, the Heads of States and Government held two Tripartite Summits in Kampala in 2008 and in Johannesburg in 2011. The First Tripartite Summit held in Kampala approved the expeditious establishment of an FTA encompassing the Member/Partner States of the three Regional Economic Communities (RECs) and accentuated the fact that the Tripartite Arrangement is a crucial building bloc towards achieving the African Economic Community.

The Second Tripartite Summit held in Johannesburg witnessed the signature of the declaration to launch the negotiations for the establishment of the Tripartite Free Trade Area, the adoption of the roadmap for establishing the FTA, and the negotiating principles, processes and institutional framework.

The Heads of States and Government endorsed three pillars of integration: 1) Market Integration; 2) Industrial Development and 3) Infrastructure Development. The first phase of the Tripartite negotiations covered the Market Integration pillar while the movement of business persons was considered a parallel and separate track. The second phase will cover trade in services, intellectual property rights, competition policy, and trade development and competitiveness.

The Tripartite Member/Partner States are comprised of 26 countries; Angola, Botswana, Burundi, Comoros, Djibouti, DR Congo, Egypt, Eritrea, Ethiopia, Kenya, Lesotho, Libya, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Rwanda, Seychelles, South Africa, Sudan, Swaziland, Tanzania, Uganda, Zambia, and Zimbabwe.

Despite the signature of the main text by 16 member states (no ratification done yet), there are many important annexes that are still outstanding, which are considered key instruments to the full effective implementation of the agreement. A post-negotiations key factor of the Tripartite FTA is the timely implementation of the Agreement. The effective implementation of the Tripartite FTA commitments by the Member/Partner States is therefore a priority that calls for an objective assessment with a view to identifying and defining the scope and range of issues which deserve Member/Partner States attention and consequent action. The Second Meeting of the Tripartite Sectoral Ministerial Committee on Trade, Finance, Customs, Economic Matters and Home Internal Affairs directed the TTF to prepare a draft Post Signature Implementation Road Map, which will be adopted at the signing of the TFTA Agreement. The Tripartite TFTA post signature implementation road map is a framework that identifies priority areas, the necessary actions including the sequencing, and the responsible actors. It complements the TFTA Road Map adopted by the 2nd Summit of the Tripartite Heads of States and Government in June, 2011.

ELEMENTS OF THE POST SIGNATURE IMPLEMENTATION ROADMAP

The key focal areas of the TFTA Post Signature Implementation Roadmap consist of the following:

  • Notification to the World Trade Organization
  • Finalization of negotiations on outstanding areas of the TFTA agreement (Market access, Rules of Origin…)
  • Designation and Notification to TFTA Focal Points
  • Ratification of the TFTA Agreement
  • Depository of the Instruments of  Ratification
  • Commencement of implementation of the TFTA Agreement
  • Public Awareness
  • Capacity Building
  • Preparation of a TFTA Resource Mobilization Strategy

 

Significance of the Agreement

A single FTA covering a large market of 26 countries, which constitutes half of the member states of the African Union.

 

Exemption from Customs Duties.

  • Creation of a more conducive environment for foreign direct investment (FDI attraction)
  • Elimination of non- tariff barriers.

 

Socioeconomic Indicators of the Tripartite

  • Tripartite contribution in Africa GDP: 58%
  • Tripartite GDP: 624 billion US Dollars
  • GDP per capita: 1,184 US Dollars annually
  • Tripartite population: 625 million people
  • Tripartite population to African Union population: 57%

 

The agreement was signed but it will take more negotiation rounds to finalize the outstanding issues, in order for it to enter into force. No tangible progress has been achieved since the signature, as the technical level negotiations are still ongoing. The market access and tariff liberalization offer has only been exchanged bilaterally between Egypt and EAC while the SACU member states have no key progress to be mentioned yet.  This only means that time frames will be extended for at least two more years. The risk is that the African Union launched the negotiations on the continental FTA and according to the AU roadmap the CFTA should be launched in 2017, consequently, the Tripartite has to be finalized before that date. The Egyptian negotiators should push aggressively to finalize the negotiations on rules of origin and market access, this will give Egyptian products the privilege of penetrating the tripartite non COMESA member states markets with a competitive advantage.

 

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