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Some way to go yet

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Some way to go yet

19th June 2015

By: Terence Creamer
Creamer Media Editor

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The concept of African regional integration is broadly supported both on the continent and abroad. Yet, achieving it is proving far more problematic, even before the continent’s trade- undermining infrastructure deficits and unwieldy bureaucracy are taken into account.

In 2011, the Common Market for Eastern and Southern Africa, the East African Community (EAC) and the Southern African Development Community initiated the so-called Tripartite Free Trade Area (T-FTA) negotiations, with the audacious goal of creating a free trade area that stretches from ‘Cape to Cairo’. At the time, an aspiration was set of possibly concluding the talks before the end of 2013.

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However, that deadline has come and gone, despite vocal support from several heads of State, including President Jacob Zuma, who is one of the concept’s official champions.

True, the legal instrument governing the creation of the T-FTA – encompassing 26 mostly Southern and East African countries – was formally launched at the third Tripartite Summit held in Sharm el-Sheikh, Egypt, last week. But the actual tariff phase-down schedules, which form the basis of any trade liberalisation, are yet to be finalised.

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Nevertheless, Trade and Industry Minister Dr Rob Davies told Engineering News that he was neither disappointed nor surprised that the initial timeframe had not been met, noting that African Trade Ministers had always indicated that the negotiations could take three to five years to conclude. “So, we are still within that timeframe.”

He also insisted that progress was indeed being made, reporting that a “roadmap” had been agreed for meeting a revised T-FTA implementation deadline of the end of 2016. In addition, the T-FTA’s overall architecture had also been agreed, including confirmation that existing preferential trade arrangements among participants should not be “unpicked”.

The current focus, therefore, was for participants to “exchange offers” with those countries and/or regional blocs with which preferential agreements remained absent. In the case of the Southern African Customs Union countries of Botswana, Lesotho, Namibia, Swaziland and South Africa, offers had been exchanged with the EAC, while the bloc’s offer to Egypt was close to being finalised.

The updated timetable provided a year for countries to complete the tariff schedule negotiations, which would result in an FTA covering a combined population of 625-million people and a total gross domestic product (GDP) of $1.6-trillion.

However, he admitted that the Ministers involved would still need to explain to their domestic constituencies that, while the T-FTA had been launched, business interactions on “free-trade-area terms” would not be possible until phase-down schedules had been finalised.

Stilted progress on the T-FTA has also done little to dampen South Africa’s enthusiasm for even greater regional integration, with Davies confirming that the intention is still to launch negotiations for the establishment of a Continental Free Trade Area (C-FTA) as soon as the T-FTA has been concluded. “Once established, the C-FTA will offer a market of over one-billion people and a GDP of $2-trillion,” Davies enthused.

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