At least 14 countries will begin trading freely within East, Central and Southern Africa from Thursday, July 25, after ratifying the Tripartite Free Trade Area (TFTA) agreement that unites the East African Community (EAC), the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA) into a single trading bloc.
This comes after 14 of the 29 partner countries that make up the Trilateral have submitted their instruments of ratification, thus meeting the minimum threshold required for the Transatlantic Free Trade Agreement to enter into force.
“Malawi, Lesotho and Angola are the latest member states to ratify the agreement, bringing the number of member states to 14. The agreement will enter into force on 25 July 2024,” said Christopher Onyango, Director of Trade and Customs at the COMESA Secretariat in Lusaka, Zambia.
“This means that member states can start trading. But there are technical issues that need to be put in place before they can start trading freely.”
Other countries that have ratified the Convention include Botswana, Burundi, Egypt, Eswatini, Kenya, Namibia, Rwanda, Uganda, South Africa and Zambia.
Kenya, Rwanda and Uganda have ratified the Tripartite Agreement, while the Democratic Republic of the Congo and Tanzania are still awaiting ratification.
“This project significantly addresses the problem associated with membership in multiple regional economic communities,” Onyango said.
The Tripartite Agreement provides for the complete liberalization of tariff lines and the removal of non-tariff barriers to trade.
The tripartite formation also provides best practices in promoting transport and trade facilitation tools and value chain development at regional levels which are key to boosting intra-African trade.
Among the major challenges hampering the operationalization of the Tripartite Free Trade Area is the absence of a dedicated secretariat and institutional structure to coordinate and implement its programmes and activities.
“At present, coordination is done on a rotational basis among the three regional economic communities. Therefore, the first thing the Tripartite needs to do is to establish a regional headquarters to coordinate its activities,” Onyango said.
“Another challenge was the severe financial constraints. The lack of funding has seriously slowed down negotiations on the various pillars as the RECs rely on their respective staff to facilitate these negotiations.”
Currently, the African Development Bank only supports the market integration pillar.
“This also explains why progress in negotiations on the infrastructure and industrial development pillars has been slower, even though they are essential to promoting trade and sustainable development,” he explained.
The COMESA-EAC-SADC Tripartite Free Trade Area, signed in 2015, brings together 29 countries representing 53% of the African Union membership, over 60% of the continent’s GDP ($1.88 trillion; 2019), and a combined population of 800 million.
Under the market integration pillar, the Tripartite has a more ambitious tariff liberalization agenda than the African Continental Free Trade Area – the world’s largest free trade area that brings together 55 African Union countries and eight regional economic communities to create a single market for the continent.
While the ambition level of tariff liberalization in the latest agreement is 90% for non-sensitive products, 7% for sensitive products, and 3% for the exclusion list, the triple ambition level is 100% tariff liberalization.
Except for general and specific security exemptions, 60% to 85% of tariff lines are scheduled to be liberalized upon entry into force of the agreement, and 15% to 40% of the remaining tariff lines are to be negotiated within five to eight years.
