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South Africa To Discuss Tripartite FTA

by Lorys Charalambous,, Cyprus

09 June 2011

A summit of the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADC) will be held in Pretoria on June 11 and 12 to discuss the progress made towards a tripartite free trade agreement (FTA).

The first Tripartite Summit, held in 2008 in Kampala, Uganda, agreed on a programme of "harmonization" of trading arrangements amongst the three regional FTAs, the free movement of business personnel, and the joint implementation of inter-regional infrastructure programmes.

Further meetings have been held since, including between trade ministers in May this year in Lusaka, Zambia, but it is planned that the upcoming summit will now concentrate on launching effective talks on how a single market may be established by way of the tripartite FTA, thereby also promoting and attracting both cross-border and foreign direct investment.

South Africa's Minister of Trade and Industry, Rob Davies, has said that a combined FTA would create a larger regional market of 26 countries with a combined gross domestic product of some USD833bn and 530m people. However, according to the African Development Bank, trade between African countries remains low, making up just 10% of the continent's total trade, compared with North America where intra-continental trade makes up 40% or Western Europe where such trade makes up 60%.

While the three regional FTAs still have much work to be done on the effectiveness of their respective customs unions, particularly working on the infrastructure and awareness of tariff arrangements, it is still generally believed that setting up the tripartite FTA is currently a more realistic step than contemplation of the African Economic Community that the African Union wants to put in place by 2028.

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