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Implications of the Tripartite FTA for SADC and its Member States

Trade Briefs

Implications of the Tripartite FTA for SADC and its Member States

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The Tripartite Free Trade Area (TFTA) initiative was originally launched to establish a single FTA among the Member States of COMESA, EAC and SADC. This would have brought the benefits of an enlarged market and would have solved some of the problems caused by overlapping memberships faced by the Members of the three Regional Economic Communities (RECs). It proved impossible, however, to achieve this ambitious objective during the negotiations, which were conducted between 2011 and 2015. The Preamble to the TFTA Agreement, signed in early June 2015, contains references to subsequent decisions on how the negotiating goals were re-formulated and changed.

The TFTA is unfinished business. More work and political commitment are needed for concluding the TFTA agenda and completing outstanding tasks. It may take quite some time before the TFTA Agreement will enter into force. Before that will happen, the participating Governments will have to weigh the benefits or disadvantages of ratifying the Agreement. This would presumably involve discussions with their counterparts in the RECs (and there will be more than one of them in the case of many of the States involved) of which they are a party.

What are the implications for SADC and its Member States of these developments? Those SADC Members which do join the TFTA will do so individually; SADC is not a customs union and does not have a common external tariff or single customs territory, as SACU has. Firms doing business in SADC and elsewhere in Africa will need to study the extent to which the TFTA establishes new trade preferences and what they mean. TFTA rules of origin (still to be decided) will require specific attention; they might turn out to be a mixture of the different approaches followed by SADC (where the rules of origin are tighter) and the EAC and COMESA, respectively. Supply chain logic and needs could be directly affected.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.


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