Towards a Tripartite COMESA-EAC-SADC Free Trade Area: The Process, Issues and Priorities
Taku Fundira, a tralac Researcher, discusses “Towards a Tripartite COMESA-EAC-SADC Free Trade Area: The Process, Issues and Priorities” (17-18 June 2010, Arusha, Tanzania).
tralac recently participated in the Tripartite Forum organised by the Trade Policy Training Centre for Africa (TRAPCA) in Arusha Tanzania from 17 – 18 June 2010. The objective of the forum was to bring together policy makers, government officials, researchers, the private sector and civil society from COMESA, EAC and SADC which deal with regional integration to discuss the tripartite process.
The issues that were up for discussion included priority areas for harmonisation and common policies, the legal and institutional frameworks for the tripartite FTA, the political economy and the role of the private sector and civil society.
Participants were informed by representatives from the EAC Secretariat that, prior to the 2008 COMESA-EAC-SADC tripartite Summit of Heads of State and government, the three regional economic communities – COMESA, EAC and SADC had been conducting informal meetings to coordinate, harmonise and attempt to synchronise issues on some of the trade related changes towards the establishment of a Free Trade Area (FTA).
Several presentations and discussions on key issues of concern for such an expanded FTA were held during the two day workshop. Of notable importance were the issues of trade barriers, more specifically non-tariff measures (NTMs); rules of origin (RoO); sensitive products; trade in services and economic partnership agreements (EPAs).
On NTMs, there was a greater appreciation of the need to address this issue and explore ways of eliminating them. It was noted that NTMs were dynamic and addressing them is an ongoing process with many challenges. The greatest challenge was to ensure that new measures are not introduced as old ones are eliminated. Suggestions for a transparent disclosure process involving a scoreboard approach were made. However, it was also noted that disclosure of NTMs tends to be constrained by the fact that notifying countries tend to become subjects of scrutiny. The full participation of stakeholders was advocated for this issue.
On RoO, currently COMESA and EAC have to a greater extent a similar RoO regime, but this is totally different to the one applied by SADC. It was noted that the tripartite FTA could provide a platform for the negotiation of a new and simpler RoO regime that does not impede or restrain trade. A holistic approach was required to ensure that RoO do not become a new form of protectionism while also ensuring that a lax RoO regime does not result in the loss of benefits for the member countries.
On the issue of sensitive products, it was highlighted that there were always problems associated with determining an appropriate list of sensitive products in trade agreements even though there exists a general agreement on principles for selecting sensitive products (i.e. economic significance of product; potential of sector to regional economic development etc). The problems stemmed from the fact that rent seeking and corruption were prevalent to the extent that they undermined the process. Furthermore, lack of resources and analytical capacity to undertake detailed analysis, and the lack of properly defined guidelines and benchmarks also hindered the process. Participants were challenged to find ways to develop a systematic approach to determining sensitive products and ensure that all stakeholders are aware of the purpose of a sensitive products list (i.e. economic vs political vs social concerns). As a principle, it was proposed that the RECs should not introduce new sensitive products in addition to those currently present in their schedules, but to work towards reducing their lists. The EAC was the only REC to have developed and agreed on a list of 55 product lines.
The importance of trade in services is greatly acknowledged and it was noted that in Africa, this sector could significantly contribute towards poverty reduction, employment and export diversification. Reform of the services sector is necessary to ensure that countries enjoy the benefits from trade. Issues for consideration during the reform process include;
- Defining a strategy for trade in services that is integrated in the national development plan;
- Implementing a trade regulatory audit in the priority services sector;
- Allowing a sector-by-sector approach to coordinate the trade and regulatory reform; and
- Working with donors to make sure that adequate technical assistance is available.
On the whole, the forum raised important issues that need to be taken into account before the process of establishing the tripartite FTA can begin. Studies have been conducted in the different RECs but their impact in influencing the policy framework remains minimal, as most decisions are taken at a political level and with limited economic considerations or guidelines. It was noted that RECs continue to get involved in many trade related negotiations at the bilateral; regional and multilateral level.
Some of the questions raised at the forum were: Are the RECs getting involved in trade agreements beyond their capacity? Is there enough coordination and coherent policies to guide all the different negotiations?