Update on Preparations for Tripartite FTA Negotiations
JB Cronjé, tralac Researcher, gives an update on preparations for the Tripartite FTA negotiations
In June 2011 the Heads of State and Government of the Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC), and Southern African Development Community (SADC) launched the negotiations for the establishment of an integrated market of 26 countries consisting of the Member States of the three Regional Economic Communities (RECs); the Tripartite Free Trade Area (FTA). The Summit adopted a Roadmap for the establishment of the COMESA-EAC-SADC Tripartite FTA, providing the timelines for key activities relating to the negotiations and their conclusion, and the implementation of the outcomes as well as the institutional framework for the negotiations (download documents of the Second Tripartite FTA Summit below). The timeframes in the Roadmap have not been fully adhered to. According to the Roadmap, the pre-negotiations preparatory period before the commencement of formal negotiations on trade in goods and the movement of business persons had to be concluded by the June this year. Nonetheless, preparatory work is on-going within the adopted negotiation institutional framework in order to complete negotiations by 2014.
The Tripartite FTA will be negotiated within the following institutional framework:
- Tripartite Heads of State and Government,
- Tripartite Council of Ministers,
- Tripartite Sectoral Ministerial Committees,
- Tripartite Committee of Senior Officials,
- Tripartite Trade Negotiation Forum (TTNF).
With regard to the negotiations on tariffs, the negotiating principle of Building on the acquis of the existing REC FTAs in terms of consolidating tariff liberalisation in each REC FTA is understood to mean that negotiations on tariff liberalisation “should start from the point at which each of the COMESA, EAC and SADC trade regimes have reached. Furthermore tariff negotiations and the exchange of tariff concessions would be among Member / Partner States of the Tripartite FTA that currently have no preferential arrangement in place among them.” It is believed that this approach will both preserve the acquis and build on it. In other words, Member/Partner States already participating in FTAs are encouraged to extend the highest level of tariff liberalisation achieved in their RECs to all other Tripartite Member States. In this regard, three groups of countries can be identified for the negotiations on tariff liberalisation, namely:
- Member / Partner States that are already participating in the REC FTA with each other.
- Member / Partner States that are participating in the REC FTA but will have to negotiate tariff liberalisation with other Tripartite Member / Partner States of the other REC FTAs.
- Member / Partner States that are not participating in the REC FTA.
The combined membership of the three RECs is 26, of which 10 states are expected to negotiate as two blocs of 5 countries each. The Member States of the two customs unions (EAC and Southern African Customs Union) in the region will make common offers and receive common requests. The 16 remaining countries are separate customs territories and will negotiate individually but nothing prevents any two or more countries from collaborating, formulating and taking common negotiating positions as “like-minded countries”.
In addition, it was proposed that the threshold for substantial liberalisation under the Tripartite FTA should be 100% product coverage to be implemented in three phases (60% tariff liberalisation in year 1, 30% in year 2 and 10% in year 3) within 3 years after entry into force of the Tripartite FTA Agreement. The Member States are required to undertake national/regional consultations on these draft modalities for tariff negotiations and submit comments to the Tripartite Task Force before the end of October 2012.