The road ahead for the Tripartite FTA negotiations
JB Cronjé, tralac Researcher, discusses recent developments in the establishment of the Tripartite FTA and what still lies ahead
Four years after the launch of negotiations for the establishment of the COMESA-EAC-SADC Tripartite Free Trade Area (Tripartite FTA) an incomplete Agreement was finally signed at the Third Summit of Heads of State by 16 of the 26 Member States on 10 June 2015 in Egypt. The list of signatories is informative mainly due to the absence of certain Members including South Africa, Botswana, Lesotho, Mozambique, Mauritius, Madagascar, Ethiopia, Eritrea, Libya and Zambia. In particular, Members of the Southern African Customs Union (SACU) have broken ranks despite an obligation in terms of the SACU Agreement to adopt a common negotiating position with third parties in order to preserve the common external tariff.
The Declaration of the Third Summit (signed by all Members except Libya and Eritrea) provides that certain outstanding negotiating issues including the elimination of import duties, trade remedies and rules of origin still need to be finalised. In addition, it also provides for the commencement of the second phase of the negotiations which will include trade in services, cooperation in trade and development, competition policy, intellectual property rights and cross border investments. Negotiations on movement of business persons will continue on a separate track.
Significantly, the Declaration provides “that all negotiations, including outstanding work be carried out in accordance with principles, processes and institutional structures as approved by Summit”. This is noteworthy because the Agreement reflects the outcomes of the negotiations thus far and will form the basis for the continuation of the negotiations. Those Members that have signed the Agreement are bound to complete the negotiations in terms of the principles governing the Agreement. The principles contained in Article 6 of the Agreement are somewhat different to the negotiating principles adopted by the Second Summit in 2011 when the negotiations were launched. Looking ahead, these modifications or additions to the negotiating principles could potentially change the dynamics in the negotiation process.
In particular, Article 6 of the Tripartite FTA Agreement provides the Agreement is governed by, amongst others, the principles of “building on the acquis”; “single undertaking with regard to the various phases of the Agreement”; and on “best practices in the regional economic communities, the Tripartite Member/Partner States and international conventions binding Tripartite Member/Partner States”. The notion of the acquis as introduced into the intra-Africa trade negotiation vocabulary by the Tripartite FTA Negotiating Principles, Processes and Institutional Framework Guiding the Tripartite FTA Negotiations of 2011 and as later defined has complicated the negotiations. However, the Tripartite FTA Agreement does not define the principle. Going forward, this affords Members the opportunity to formulate a new and more inclusive understanding of the acquis.
The Tripartite FTA Agreement will also form a single package of legal instruments. The Agreement provides Members to it will adopt all negotiating results with regard to the different negotiating phases of the Agreement as part of a single undertaking. It means that negotiations on all matters will now proceed simultaneously, not sequentially, and all Members must accept all the negotiating results, without reservation. In practice, in order to give effect to this ‘single undertaking’ requirement, it would mean nothing is concluded until everything is concluded in the negotiations. Such a negotiating principle is important for the conclusion of a comprehensive trade agreement that could cater for the challenges facing international trade in the twenty first century. However, the Tripartite FTA Negotiating Principles, Processes and Institutional Framework Guiding the Tripartite FTA Negotiations of 2011 provided the principle of ‘single undertaking’ will only cover “Phase 1 on trade in goods”. In other words, only the elements constituting the trade in goods agenda would have resulted in an agreement that would have been open for acceptance as a whole. However, such an agreement could potentially have excluded movement of business persons, trade in services or the issues on the built-in agenda. The modification of the principle to include all aspects of the negotiations as an integral part of the Agreement prevents the fragmentation of the negotiating agenda and allows for the conclusion of a single comprehensive agreement covering trade in goods, the movement of business persons, trade in services, and cooperation in trade and development, competition policy, intellectual property rights and cross border investments.
It is not clear at this stage why some Members decided not to join the Tripartite FTA. Not all Members might be equally enthusiastic about undertaking commitments beyond those relating to trade in goods any time soon. Other Members might have been reluctant to sign an incomplete Agreement at this stage. This is all speculation in the absence of clear explanations from the non-signature Members. Nonetheless, the Tripartite FTA negotiations will proceed with or without them.