Africa of­fi­cials gather mega trade pact

The China Post - - BUSINESS -

Se­nior of­fi­cials of three African eco­nomic blocs met in Egypt on Sun­day to start ham­mer­ing out de­tails of a free trade agree­ment that could de­velop a com­mon mar­ket span­ning the con­ti­nent.

The Tri­par­tite Free Trade Area (TFTA) is to be launched at a sum­mit of heads of state and gov­ern­ment on Wed­nes­day in the Red Sea re­sort town of Sharm El-Sheikh, aimed at es­tab­lish­ing a com­mon frame­work for tar­iff pref­er­ences along with other com­mit­ments.

The deal be­tween the East African Com­mu­nity, South­ern African Devel­op­ment Com­mu­nity and the Com­mon Mar­ket for Eastern and South­ern Africa will cre­ate a mar­ket of 26 coun­tries with a pop­u­la­tion of 625 mil­lion and gross do­mes­tic prod­uct worth more than US$1 tril­lion (900 bil­lion eu­ros).

On Sun­day, se­nior of­fi­cials from the three eco­nomic blocs be­gan dis­cussing the de­tails of the deal.

“To­day, we opened the prepara­tory meet­ing of se­nior of­fi­cials. De­tails of our dis­cus­sions will be pre­sented to­mor­row at the meet­ing of min­is­ters,” Fran­cis Man­geni, direc­tor for trade at COMESA told AFP on the side­lines of the meet­ing.

The much-awaited TFTA has been widely wel­comed by world busi­ness lead­ers, with ex­perts high­light­ing the fact that just 12 per­cent of African coun­tries’ to­tal trade is with each other.

Africa’s share of global stands at around 3 per­cent.

The 26 mem­bers from the three eco­nomic blocs range from rel­a­tively de­vel­oped economies such as South Africa and Egypt to coun­tries in­clud­ing An­gola, Ethiopia and Mozam­bique, which are seen as hav­ing huge po­ten­tial growth.

An­a­lysts say that although the con­ti­nent’s growth out­stripped global GDP ex­pan­sion by nearly

trade three per­cent­age points over the past 15 years, it faced fall­ing com­mod­ity prices, power short­ages, po­lit­i­cal in­sta­bil­ity and cor­rup­tion.

Of­fi­cials say the TFTA of­fers sig­nif­i­cant op­por­tu­ni­ties for busi­ness and in­vest­ment within the three blocs and would act as a mag­net for at­tract­ing di­rect for­eign in­vest­ment in the 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 the elim­i­na­tion of over­lap­ping trade regimes, of­fi­cials say.

“The launch­ing of the TFTA 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,” or­ga­niz­ers said on the web­site of the June 7-10 con­fer­ence.

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