Africa launches continent's largest free trade area
The FTA covers 26 member states and stretches from Cape Town to Cairo
African heads of state have agreed to create the largest free trade area covering 26 member states and stretching from Cape Town to Cairo.
The Tripartite FTA (TFTA) was agreed during the Third Tripartite Summit held in Sharm El Sheikh, Egypt this week and is expected to eventually increase trade within the region by up to 30% in the next decade.
It is designed to create an integrated market with a combined population of almost 600m people and a total GDP of around US$1 trillion.
The TFTA comprises the three existing trade blocs: the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADC). Under the new deal, these will be united into a single new zone.
The trade bloc is expected to be the first step towards a more ambitious plan of establishing an African Customs Union by 2019. It is also being seen as an important step towards a potentially "game-changing environment" for Africa’s trade and integration.
African blocs believe that, once operational, the TFTA will create the opportunity to enhance economic inter-linkages unlock regional business potential, scale up productive capacities and competitiveness, and stimulate the emergence of value chains.
Egypt’s Minister of Industry and Trade, Mounir Fakhri Abdel Nour, welcomed the TFTA launch as a "monumental step", while the secretary general of COMESA, Sindiso Ngwenya, who has been leading talks, added: "We have realised that having one trade regime is better than costly multiple trade regimes."
The decision to launch the Tripartite FTA was made after a majority of the Tripartite members made "ambitious" tariff offers following the Tripartite Sectoral Committee of Ministers meeting in Bukumbura, Burundi in October last year.
Negotiations to discuss outstanding issues such as rules or origin (RoO), trade remedies and dispute settlement, are expected to take place post-signature of the TFTA. In the interim, tripartite ministers have agreed on RoO to be applied while further work continues on specific rules of origin, COMESA said last week.
The TFTA deal will come into force once ratification is attained by two-thirds of the 26 member states.
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