Tripartite Free Trade Area will Enhance Africa’s Development
|
2015-06-12 The Minister of Trade and Industry, Dr Rob Davies, says the launch of the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADC) Free Trade Area sends a powerful signal that Africa is serious about its economic integration. The COMESA-EAC-SADC Tripartite Free Trade Area (TFTA) was launched on 10 June 2015 at the 3rd Summit of the Tripartite in Sharm el-Sheikh, Egypt by the leaders of the three trading blocs. Minister Davies led the South African delegation to the launch. The Tripartite Free Trade Area (TFTA) creates a larger market of 26 countries, a combined population of up to 625 million people and a total gross domestic product (GDP) of $1.6 trillion. The launch of the TFTA follows four years of negotiations among the three regional trade blocks. Minister Davies said that the main benefit of the TFTA is a larger, integrated, and growing regional market that can increase the interest of foreign investment and provide a basis for enhanced intra-African trade. He highlighted that the underlying rationale for African economic integration is that African markets are small by global standards, and certainly too small to support economic diversification and industrialisation of the individual countries. “The establishment of the TFTA is not only a political vision but makes business sense. The creation of larger markets with greater critical mass will not only enhance the African investment proposition, it is also the only way Africa will compete effectively in the global economy. Regional integration is therefore critical to accelerated, inclusive and sustainable growth in Africa,” said Davies. He added that the Tripartite Initiative is based on a development integration model premised on three pillars: “The market integration pillar aims to address trade barriers and is to be complemented by cooperation on industrial development; and coordinated infrastructure development. This is essential to enhance productive capacity and the development of regional value-chains. As well as promote inter-connectivity and reduce costs of doing business in eastern and southern Africa." said Minister Davies. Minister Davies added that the launch of the TFTA would be followed by the launch of negotiations on the establishment of a Continental FTA (CFTA) at the African Union Summit, currently taking place in South Africa. “Once established, the CFTA would offer a market of over 1-billion people and a GDP of $2-trillion. The African market is crucial for South Africa’s industrialisation and job creation efforts as one of the key destinations for our value-added exports,” said Minister Davies. The COMESA-EAC-SADC Tripartite initiative is rooted in the African Union’s Lagos Plan of Action and the Abuja Treaty, which aim to establish an African Economic Community. As a first step towards achieving this, the three tripartite regional economic communities are making an effort to integrate their markets and economies by agreeing on the legal text to underpin the TFTA. The launch thus signifies the conclusion of negotiations on the Tripartite Free Trade Agreement. The implementation of agreements such as this requires parliamentary ratification. The agreement will be operationalised once tariff schedules and rules of origin have been agreed and ratification completed. These will be concluded as part of the built-in agenda following the launch. The negotiations towards the Tripartite Free Trade Agreement (TFTA) were launched in Johannesburg on 11 June 2011.
Enquiries: |