12 June 2012 marked the one year anniversary of the official launch of the Tripartite Free Trade Area (FTA) at the Second Tripartite Summit in Johannesburg. During June, a year later, the Third Tripartite Trade Negotiation Forum (TTNF) Meeting, and Fourth Meeting of the Tripartite Committee of Senior Officials took place - back to back - in Grand Baie. The meetings recorded significant progress towards negotiating Africa's largest Free Trade Area.
TMSA is providing technical and financial support to the COMESA-EAC-SADC Tripartite Task Force to facilitate the establishment of the Tripartite Free Trade Area (FTA). The COMESA-EAC-SADC Tripartite FTA will join, into a single market, three of the eight Regional Economic Communities recognized by the African Union as building blocks for the African Economic Community. These 26 countries make up half of the African Union in terms of membership and currently contribute 58% of its total GDP – estimated at 1 Trillion USD.
A year after FTA negotiations were officially launched at the historic Second Tripartite Summit of June 2011, much has already been achieved. In what has been called the boldest move by African leaders in 10 years, all member states agreed on the principles, processes, scope and roadmap for establishing the Tripartite FTA. TMSA helped with technical preparations and provided financial and logistical support for the summit and the technical workshops that preceded it. The Summit also established an institutional framework for negotiations, including the Tripartite Trade Negotiation Forum (TTNF), the inaugural meeting of which took place from 7 – 9 December in Nairobi, Kenya. In a major step forward, the meeting adopted the draft terms of reference for the TTNF and agreed on work plan, timetable and format of negotiations.
Second TTNF meeting took place from 12 – 14 March in Lusaka, Zambia. Important outcomes of the meeting included forging a common understanding of the adopted negotiation principles, as well as the establishment of two technical working groups.
The third Tripartite Trade Negotiation Forum meeting took place from 1 – 3 June in Grand Baie Mauritius. Important outcomes of the meeting included:
- Reaching a common understanding of the interpretation of the remaining negotiating principle on special and differential treatment.
- Agreeing to use the draft FTA agreement and Annexes as the starting point for negotiations. The Tripartite Task Force (TTF) prepared this document following the first Tripartite Summit held in Kampala in 2008, taking into account existing provisions of trade regimes in the three RECs. It was at this important summit that the establishment of the tripartite FTA was first approved.
- Approving the terms of reference for the three technical working groups (TWG) established by the TTNF to date. These TWGs will assist the TTNF in specialist areas where expertise is needed to ensure technical issues are properly covered in the FTA agreements. The three TWG established are on (1) Customs Cooperation, Documentation, Procedures and Transit Instruments; (2) Technical Barriers to Trade (including standards and metrology), Sanitary and Phyto-Sanitary Measures and Non-Tariff Barriers and (3) Rules of Origin.
- Progress on the submission of tariff offers was also reviewed. The TTNF has requested the TTF to prepare a paper on tariff negotiation modalities and to amend and complete the template to be used for preparing offers.
- The preparatory trade related information exchange has commenced. TMSA is facilitating analytical work, which includes modeling Tripartite FTA trade liberalisation scenarios to determine the associated fiscal and trade impacts for each Tripartite country. The information disseminated to date comprise of tariff data indicating applicable Most Favoured Nation (MFN) and preferential tariff rates, trade statistics for the period 2006 – 2010 and Rules of Origin for all preferential trading arrangements currently in place. In addition, member states provided information on current national trade policy instruments and measures. The third TTNF meeting agreed that Member States should confirm that the data exchanged provides an adequate platform for negotiations to start. Member states may request and continue to exchange additional trade and tariff information throughout the negotiation process.
At the fourth meeting of the Tripartite Committee of Senior Officials, which followed the third TTNF meeting, it was agreed that the Monitoring and Evaluation Mechanism provided for in the FTA Road Map should be prepared for consideration at the next TTNF meeting in August 2012. The M&E Mechanism will cover the negotiations as well as implementation phases of the Tripartite Free Trade Area Agreement. It was also agreed that the next TTNF meeting should initiate negotiations on modalities for tariff liberalization.
Negotiating the Tripartite FTA is an ambitious undertaking – both in scope and complexity. Adding to the complexity is the fact that the Tripartite countries differ greatly with regards to the size of their economies and their level of development. As a result, their interests during FTA negotiation and implementation, as well as their capacity to negotiate, vary significantly. According to World Bank income classification, 13 Tripartite countries fall in the low-income group, 7 in the lower-middle income group and 6 in the upper-middle income group.
Sixteen of the 26 Tripartite countries (or 61%) are also classified as least developed countries (LDCs). These 16 countries are nearly half of the 33 LDCs in Africa and a third of the 48 LDCs globally. TMSA is providing support through the WTO LDC Group to these countries to help them implement the WTO LDC work programme, participate in the Multilateral Trading System, improve their market access, diversify their production and export bases and help them access Enhanced integrated Framework (EIF) support through developing project proposals. As such, TMSA’s support to the LDC Group exploits the complementarities between the WTO and Tripartite agendas.
The first phase of Tripartite FTA negotiations, which will result in an agreement on trade in goods, is set to be completed within only 36 months. This is an extremely ambitious timeline when compared to approaches in other parts of the world.
This ambitious undertaking, however, has very high prospects for growth. Due to greater trade liberalization and supportive policies initiated in the three RECs over the last few years, exports rose from US $ 7 billion in 2000 to US $ 27 billion in 2008. Over the same period, imports grew from US $ 9 billion to US $ 32 billion. The AU also reported substantial growth increases in intra-regional trade in COMESA from US $3.1billion in 2000 to US $ 13.7 in 2008. An increase in the RECs’ share of African trade was also documented.
 United Nations Economic Commission for Africa (2011) | Final Report – Study on the Establishment of Inter-REC FTAs in Africa Drawing on the lessons from the COMESA-EAC-SADC FTA experience.