African Leaders Launch Tripartite FTA Talks

by Lorys Charalambous, Tax-News.com, Cyprus

16 June 2011

A leaders’ summit of the Common Market for Eastern and Southern Africa, the East African Community and the Southern African Development Community, held in Johannesburg on June 11 and 12, has agreed to formally launch negotiations to establish a tripartite free trade agreement (FTA).

A combined FTA would create a larger regional market of 26 countries with a combined gross domestic product of some USD875bn and 700m people. It would open the borders of approximately half of the continent, spanning the entire southern and eastern regions of Africa - from the Cape to Cairo.

In their communiqué, at the end of the summit, the leaders signed an agreement to launch talks and adopted the roadmap for the establishment of the FTA. The first phase of negotiations on allowing the free movement of goods is expected to take three years. Future negotiations would then tackle trade in services and other issues.

The leaders also adopted a developmental approach to the tripartite integration process, saying it will be anchored on three pillars: market integration based on the tripartite FTA; infrastructure development to enhance connectivity and reduce costs of doing business; and industrial development to address productive capacity constraints.

The communiqué added that "the establishment of a FTA will bolster intra-regional trade by creating a wider market, increase investment flows, enhance competitiveness and develop cross-regional infrastructure."

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