Trade Facilitation in the COMESA-EAC-SADC Tripartite Free Trade AreaPosted on Wednesday, September 21st, 2011 by Pearson, Mark in Featured Publications, Working Papers
The COMESA-EAC-SADC Tripartite was created in 2006 to assist in the process of harmonising programmes and policies within and between the three Regional Economic Communities of COMESA, EAC and SADC and to advance the establishment of the African Economic Community. The three main pillars of the Tripartite strategy, as contained in the Vision and Strategy document that was endorsed at the second Tripartite Summit in June 2011 are Market Integration, Infrastructure Development and Industrial Development.
Africa accounts for less that 2.5% of world trade and non-oil exports have been about 1% since 1992 – half of their 1980 value. The level of intra-African trade is also low – 10%, compared to about 40% in North America and about 60% in Western Europe. In addition, Africa has the highest export product concentration of any continent, coupled with a high export market concentration, reflecting continued reliance on primary commodity exports mainly to the European Union, United States of America and China.
Africa also ranks low on trade policy and facilitation performance, with seven African countries listed in the bottom ten most restrictive trade regimes. In general, and compared to other countries, African countries have performed poorly in terms of logistics. Markets remain fragmented and borders are difficult to cross, which prevents the emergence of regionally integrated industries and supply chains.
In the COMESA-EAC-SADC Tripartite region the costs of transport, in particular road transport (which accounts for about 95% of the volume of cargo transported in the region), is directly related to the time taken for the journey. The typical charge for a stationary truck is between US$200 to US$400 a day. Therefore, if a truck takes 3 days to clear a border (which is not excessive in the COMESA-EAC-SADC region) the transporter will pass on an additional cost of between US$600 to US$1,200 for the cost of the truck sitting idle at the border to the importer. This will, in turn, be passed on to the importer’s client and ultimately, to the consumer.
Until the underlying causes of these high costs of transport are addressed African countries will remain high-cost producers, with no major direct investments taking place in non-mineral sectors, restricted economic growth opportunities and slow progress made in poverty alleviation. An integral part of the Tripartite Free Trade Area is the design and implementation of a programme that is aimed at improving trade and transport measures and reducing non-tariff barriers to trade.
The aim of this paper is to describe the main components of the Tripartite trade facilitation and non-tariff barrier programmes and put these programmes into a regional and a multilateral context.
Download: S11WP112011 Tripartite Trade Facilitation 20110921.pdf (421KB)