Discussions
Highlights of the Extra-Ordinary COMESA Council of Ministers Meeting
Brian Mureverwi, Independent Expert, comments on the outcomes of the recent COMESA Council of Ministers Meeting in Lusaka
On 3-4 March 2016, the Common Market for Eastern and Southern Africa (COMESA) held an extra-ordinary Council of Ministers meeting in Lusaka, Zambia. The main purpose of the two day meeting was to make decisions regarding various issues on implementation of regional integration programmes, human resources and administration, and the budget for 2016. The extra-ordinary meeting was attended by Ministers in charge of coordination of COMESA programmes in the 19 Member States. Hon. Ahmed Shide, the State Minister in the Ministry of Finance of Ethiopia chaired the meeting.
The Ministers noted that since the launch of the TFTA in June 2015, 16 out of the 26 countries had signed the agreement. So far, none of the tripartite countries have ratified the Agreement. Those that have signed are: Angola, Burundi, Comoros, D R Congo, Djibouti, Egypt, Kenya, Malawi, Namibia, Seychelles, Rwanda, Sudan, Tanzania, Uganda, Swaziland and Zimbabwe.
The Tripartite Free Trade Area (TFTA) was launched by the Third COMESA-EAC-SADC Summit of Heads of State and Government on the 10 June 2015 in Sharm El Sheikh, Egypt. Outstanding work in Phase I includes: rules of origin, elimination of import duties and trade remedies. Negotiations on these are to continue in parallel to Phase II negotiations covering trade in services, competition policy, intellectual property rights and other trade related issues. Negotiations on movement of business persons, which was taking place on a separate but parallel track, could not be finalized and will continue in parallel to Phase II negotiations. Seven of the ten annexes have been finalized. Outstanding ones are annex I on tariff elimination schedules, annex II on trade remedies, and annex IV on rules of origin.
The Ministers were informed that considerable work had been done during three subsequent meetings convened by the technical working groups, inlcuding those on Rules of Origin, and Trade remedies. As a result, six out of seven annexes that had been finalized and were submitted for legal scrubbing. These are Annexes 3,5,6,7,8,9 on non-tariff barriers, customs cooperation, trade facilitation, transit trade and transit facilitation, technical barriers to trade and sanitary and phyto-sanitary measures respectively.
In their final decisions, the Ministers urged member States to confirm their tariff offers to other TFTA member/Partners States and submit their tariff 2012 books to the Secretariat by 30 April 2016. The books should show clearly all current trade regimes they participate in and duties on products originating from TFTA countries. On rules of origin, the Ministers noted that 47.9 per cent of all chapters relating to the negotiation on list rules remained outstanding, and these represented 55% of total intra-tripartite trade value.
Comment
The decision by the Extra-Ordinary Council of Ministers to urge members states to expedite the signing and ratification of the TFTA Agreement is a welcome development. It is important for COMESA to have a common approach to regional integration agenda in line with the COMESA Treaty, especially that the TFTA is a REC/member state driven process. However, three of the nineteen COMESA member states have not yet joined the COMESA Free Trade Area despite the huge ambition to migrate to a larger free trade area, and these are the DRC, Ethiopia, and Eritrea. Reports from previous Council of Ministers meeting held in December 2015 in Lusaka indicate the following status with respect to joining the COMESA FTA:
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Ethiopia is now awaiting a final cabinet decision on joining the COMESA FTA;
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Congo DR had passed the law enabling it to join the COMESA FTA, which now awaits further action by the Head of State; and
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Eritrea reiterated its request for technical assistance from COMESA Secretariat that is mainly focused on the issues of the rules of origin, issues of trade facilitation, NTBs, and a study dealing with the implications of joining the COMESA FTA, specifically how to optimize benefits from deeper regional integration, therefore promoting economic growth and long-term development.
While the above three countries are at various stages of joining the COMESA FTA, there is also strong appetite by member states to impose NTBs among themselves. This is partly due to the fact that NTBs are easy to impose. Non-Tariff Barriers have an important effect of increasing the cost of business, and hence stifling intra-regional trade. The December Council reports indicate that since the online system came into existence in 2008, 171 NTBs have been recorded between COMESA Member States. Zimbabwe has registered the highest number of NTBs amounting to 51 or 29.8% of the total NTBs reported by COMESA Member States, and has imposed the largest number of NTBs of 36 or 21.1% of the total imposed NTBs. Following in second position was Kenya on the reported NTBs side at 20 or 11.7%, while on the imposed side Zambia is second at 28 or 16.4%. Of the 171 reported NTBs, only 7 are outstanding and yet to be addressed, representing about 4.1% of the reported NTBs. This is partly due the efficacy of the NTB focal points among member states in resolving them, and the adoption of the NTB Regulations in May 2015.
This means that 95.9% of reported NTBs have been resolved. The following unresolved NTBs are at various stages of resolution through bilateral engagements:
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Between Swaziland and Zimbabwe on freezers and fridges;
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Between Kenya and Zambia on UHT milk;
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Between Kenya and Zambia on pure palm-based cooking oil;
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Between Madagascar and Mauritius on soap;
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Between Egypt and Rwanda on wheat flour;
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Between Zambia and Zimbabwe on import licences, surcharges on various products; and
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Between Egypt and Zimbabwe on bottled soya oil.
Although the Extra-Ordinary Council meeting reiterated the need to implement various regional integration programmes, the above sticky items pose the risk of creating a dysfunctional TFTA. This situation is peculiar to COMESA alone, but also extends to the other TFTA parties with respect to signing of the TFTA Agreement, and the submission of tariff phase down schedules ahead of the launch in 2017.
References
Report of the Thirty Fifth Meeting of the COMESA Council of Ministers, December 2015. COMESA Secretariat, Lusaka.
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