African businesses to benefit from Grand Free Trade Area
The business communities in 26 African countries are expected to benefit from an improved and harmonized trade regime post launch the Tripartite Free Trade Area of COMESA-EAC-SADC, popularly known as Grand Free Trade Area, in mid-December 2014.
At a ministerial meeting of the Tripartite Sectoral Committee of Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC) and the Southern African Development Community (SADC) in Bujumbura, Burundi last month, it was agreed that the Grand Free Trade Area (FTA) would be launched at the Tripartite Summit of Heads of State or Government to be held in Egypt in mid-December 2014.
The decision to launch the Grand FTA took into account the fact that the majority of the 26 Tripartite Member/Partner States have made ambitious tariff offers and were agreed on Rules of Origin to be applied in the interim whilst further work continues on product specific Rules of Origin.
The 26 Member/Partner States from the COMESA-EAC-SADC have a combined population of 625 million people and a Gross Domestic Product of US$ 1.2 trillion. These states account for half of the membership of the African Union and 58 percent of the continent’s GDP.
Once established, the Grand FTA will be the largest economic bloc on the African continent and will serve as the launching pad for the establishment of the Continental Free Trade Area (CFTA) in 2017, according to a statement issued by Sindiso Ngwenya, secretary general of COMESA and chairperson of the COMESA-EAC-SADC Tripartite Task Force.
“The Tripartite FTA offers significant opportunities for business and investment within the Tripartite and will act as a magnet for attracting foreign direct investment into the Tripartite region. The business community, in particular, will benefit from an improved and harmonized trade regime which reduces the cost of doing business as a result of elimination of overlapping trade regimes due to multiple memberships,” Mr. Ngwenya said.
“The launching of the Tripartite FTA is the first phase of implementing a developmental regional integration strategy that places high priority on infrastructure development, industrialization and free movement of business persons,” he added.
Hailing the agreement to launch the Grand FTA as a milestone in regional and continental integration, Chiratidzo Iris Mabuwa, chairperson of the Tripartite ministerial meeting, said, “Africa has now joined the league of emerging economies and the Grand FTA will play a pivotal and catalytic role in the transformation of the continent.”
“We have made significant progress in negotiations on trade in goods, and we now need to expedite negotiations on trade-related areas, including trade in services, intellectual property and competition policy to ensure equity, among all citizens of the wider region,” Ms. Mabuwa, who is also Deputy Minister of Commerce and Industry of Zimbabwe, said.