- INTRODUCTION AND BACKGROUND
The Common Market of Eastern and Southern Africa (COMESA) is a regional economic community (REC) formed in December 1994. With a membership of 21 states, COMESA is the largest REC in Africa with a total population of about 540 million, and global trade in goods worth US$ 235 billion. COMESA’s vision is “to be a fully integrated economic community that is prosperous, internationally competitive, and ready to merge into the African Economic Community”. Consistent with this vision, COMESA’s main focus is to create a large economic and trading unit that is capable of overcoming some of the barriers and economic development challenges that its member states face.
COMESA has taken many strides to advance its economic integration agenda. In 2000, it established a Free Trade Area (FTA) among nine member states with the primary aim to facilitate regional integration through zero customs on goods traded amongst the members.. Since the launch of the FTA, intra-COMESA trade has grown at an average of 7% with a higher increase reflected between intra-Free Trade Area States. In 2009, COMESA launched a Customs Union, but it is yet to be fully operational. Subsequently, COMESA also launched a host of initiatives to enhance trade facilitation. These include, but are not limited to, projects to improve transport and communication systems and protocols for the hauling and processing of goods at borders.
The agreement establishing the African Continental Free Trade Agreement (AfCFTA) signed in Kigali, Rwanda, on 21 March 2018 is a key milestone in Africa’s integration Agenda.
The AfCFTA aims to (a) create a single continental market for goods and services, with free movement of business persons and investments and thus pave the way for accelerating the establishment of the Continental Customs Union and the African customs union, (b) expand intra African trade through better harmonization and coordination of trade liberalization and facilitation regimes and instruments across RECs and across Africa in general, (c) resolve the challenges of multiple and overlapping memberships and expedite the regional and continental integration processes, and (d) enhance competitiveness at the industry and enterprise level through exploiting opportunities for scale production, continental market access and better reallocation of resources.
Its specific objectives as laid out in Article 4 of the Agreement include:
- progressive elimination of tariffs and non-tariff barriers to trade in goods;
- progressive liberalization of trade in services;
- cooperation on investment, intellectual property rights and competition policy;
- cooperation on all trade-related areas;
- cooperation on customs matters and the implementation of trade facilitation measures;
- establishment of a mechanism for the settlement of disputes concerning their rights and obligations; and
- establishment and maintenance of an institutional framework for the implementation and administration of the AfCFTA.
Thus, the AfCFTA is expected to be a key engine of economic growth, industrialization and sustainable development in Africa in line with the 2030 Agenda adopted by the United Nations General Assembly, and the African Union (AU) Agenda 2063 for “The Africa We Want”.
For the COMESA region, the implementation of the AfCFTA provides the missing ingredient to intra-COMESA trade. First, it helps in addressing some of the challenges associated with multiple and overlapping membership in COMESA. This will be achieved through the harmonization of integration policies for the existing RECs and free trade areas. Secondly, the AfCFTA has potential to stimulate the formation of regional value chains to ease production and supply to the enlarged market. This should enable producers in the COMESA Member States to join the regional value chains (such as leather and leather products, textile, wood and paper, agro-foods, sugar, beverages, vegetables, fruit, nuts and rice, etc), which in the long term enhance their production efficiencies, increase their profit margins and ultimately integrate them into the global value chains. The AfCFTA therefore gives an opportunity for our producers to increase production and productivity and create more jobs especially for women and youth. Thirdly, the AfCFTA will help in reducing imports from external sources and increase intra-REC and intra-continental trade by opening more regional markets through improved infrastructure connectivity, and a larger market which will enhance competitiveness, increase value addition and productivity. Thus, the AfCFTA should play a major role in complementing COMESA’s efforts in creating greater market opportunities, triggering more trade and investment and allowing greater value addition.
Following AfCFTA launch there is a need to build on the political momentum behind the AfCFTA to support policy reforms that are aimed at its implementation. In this regard, it is critical for COMESA to develop measures and strategies at regional level to support its implementation to maximize the benefits of the Agreement while minimizing potential induced adverse effects. The measures and strategies will be complemented by an effective monitoring and evaluation framework that will track progress on the implementation of the Agreement.
But the AfCFTA can only support industrialization if it is properly implemented, and African countries have a mixed record on implementing the trade agreements they have signed through their regional economic communities (RECs). Most RECs have established functioning free trade areas, but not all member states participate, and those that do often fail to honour specific commitments. This gap between agreement and implementation has hampered trade growth in Africa and undermined the transformative potential of intra-regional trade. African countries must ensure that the AfCFTA avoids this implementation gap. Furthermore, today, many COMESA Member States face challenges when accessing regional markets which include stringent SPS requirements, quality standards, lack of market information, lack of linkages among enterprises in various countries, poor communication networks and inter-connectivity, lack of harmonized procedures and grading standards, transboundary animal diseases and competition from cheap imports from other regions.
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