Member countries of the Tripartite Free Trade Area are wavering on endorsing the African Continental Free Trade Area.
The TFTA is a free-trade agreement between the Common Market for Eastern and Southern Africa (Comesa), the Southern African Development Community (SADC) and the East African Community. The AfCFTA is a trade agreement between 44 African Union member states.
The EastAfrican has learnt that TFTA partner states are puzzling whether to sign up for a regional or continental free trade area or both. A government official privy to the negotiations said the launch of the AfCFTA has complicated matters for the tripartite member countries.
“Countries will have to decide which free trade deal to join depending on the benefits they expect to get,” the source said.
So far, only four countries (Kenya, Uganda, Egypt and South Africa) have ratified the TFTA more than three years since the agreement was launched in June 2015.
Although 22 countries have signed the agreement, the pact requires at least 14 countries to ratify it for it to take effect. Other factors that have delayed the operationalisation of the TFTA are protracted negotiations on rules of origin and negotiations on tariff offers by the regional blocs.
It still remains unclear when the TFTA will take effect.
“It should happen very soon, but it all depends on political will and leadership,” said Francis Mangeni, Director-in-Charge of Trade and Customs at the Comesa Secretariat.
The TFTA was officially launched by the heads of state and governments of Comesa, EAC and SADC in Egypt in June 2015.
Thereafter, member states were given 12 months to conclude negotiations on outstanding issues on rules of origin, trade remedies and tariff offers.
The 12-month period expired on June 30, 2016 and the Council of Ministers extended the deadline by one more year to June 2017.
However, the EAC member countries and the Southern African Customs Union (SACU) have failed to reach an agreement on the tax treatment of sensitive items such as cars and dairy products under the TFTA framework and instead pushed the negotiations to December 2018.
The AfCFTA is part of the AU’s “Agenda 2063” and will create a market of over 1.2 billion people with a combined GDP of $2.5 trillion. It is expected to double intra-African trade, which currently stands at around 16 per cent of the overall trade, by removing non-tariff and tariff barriers on about 200 items traded on the continent.
The pact requires to be ratified by at least 22 countries within two years starting from March this year.