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Increased Trade Urged To Boost African FTA Project

by Lorys Charalambous,, Cyprus

11 July 2012

As African leaders prepare for their 19th African Union (AU) 2012 summit meeting in Malawi on July 15-16, its Director of Trade and Industry Treasure Maphanga has emphasized that African countries should not underestimate the task of ensuring that the ambitious idea of an African Union Free Trade Area (FTA) gets off the ground.

With the theme for the upcoming summit being "Boosting Intra-Africa Trade", Maphanga said that getting African countries to trade amongst each other was a huge task, and one that needed a full commitment from all parties.

The statement issued at the end of the AU’s 18th summit earlier this year confirmed that African countries would target the establishment of a continental FTA by 2017, by way of a three-step plan.

The first move would be the finalization of the tripartite agreement between the East African Community, the Common Market for Eastern and Southern Africa and the Southern African Development Community by 2014, while the tripartite and other regional free trade areas would be consolidated into the FTA initiative between 2015 and 2016.

Africa already has seven major regional trade blocs, including the Economic Community of West African States, the Economic Community of Central African States, the Arab Maghreb Union and the Community of Sahel-Saharan States, in addition to those within the proposed tripartite agreement.

The continental FTA envisages an area with a gross domestic product (GDP) of USD875bn from 26 countries. According to the AU, the tripartite agreement would already constitute 58% of the continent's GDP and 57% of its population.

Maphanga confirmed that "we expect that we will have the opportunity to consolidate the architecture that was adopted at the last summit and that architecture was very clear in terms of the continental frameworks and the structure that will support the FTA agenda."

However, she also pointed out that without intra-African trade and investment, and accelerated economic self-reliance, there would be no progress on integration. "We have realized that we need a transformation of trade patterns,” she added. “Without industrialization and value addition, we will not make any difference at all in terms of future trade patterns."

TAGS: tax | free trade agreement (FTA) | law | tariffs | Malawi | agreements | trade

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