Thursday, October 06, 2022
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Tripartite Free Trade Area struggles to enter into force

The Tripartite Free Trade Area still struggles to enter into force, despite its member countries signed the Tripartite Free Trade Area Agreement (TFTA) seven years ago. The TFTA was launched in 2015 with the aim to combine into an enlarged Free Trade Area (FTA) three Regional Economic Communities (RECs) in Africa, namely: the East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA) and the Southern Africa Development Cooperation (SADC). A Tripartite Task Force made up of the Chief Executives of the 3 RECs serves as the Secretariat of the Tripartite Policy organs and is responsible to coordinate the implementation of the Tripartite Free Trade Area work programme. This body rotates annually among the three RECs. On 16th July, 2022 the Chairmanship was taken up by COMESA.

The integration agenda between the 3 RECs envisages a gradual reduction to zero percent of the tariffs for all goods traded in the bloc, as well as of Non-Tariff Barriers between its members (art. 5.a TFTA), defined as “any laws, regulations, administrative and technical requirements other than tariffs imposed by a partner state whose effect is to impede trade”. The final objective is to reach full mobility of people, goods and services in an area made up of 29 member countries and representing more than 60% of the Africa Continent GDP ($1.88 Trillion) with a population of over 800 million people.

The Tripartite Free Trade Area was lauded at the fourth mid-year coordination meeting between the AU, RECs and regional mechanisms (RMs) for Conflict Prevention, Management and Resolution held on 17 July in Lusaka, Zambia. During this event, it was pointed out that the TFTA is an important building block for the Africa Continental Free Trade Area (AfCFTA), labelling such agreement as a case of successful economic cooperation between three of the major RECs in Africa and raising the need to encourage similar initiatives of inter-REC cooperation. However, the TFTA has been ratified so far only by 11member states, while the minimum threshold required for the Agreement to legally enter into force is 14 ratifications (art. 39.3, TFTA). These countries are Kenya (the first country to deposit the relevant ratification instrument to the Tripartite Task Force), Egypt, Eswatini, South Africa, Rwanda, Burundi, Uganda, Botswana, Namibia, Zambia, and Zimbabwe. Member countries that have not yet ratified the agreement include Lesotho, Angola, Somalia, DR Congo, Tanzania, Malawi, South Sudan, Libya, Ethiopia, Mauritius, Eritrea, Seychelles, Madagascar, Tunisia, Djibouti, Comoros and Sudan.

At the 2nd Extra-Ordinary Meeting of the Tripartite Council of Ministers held (virtually) on 15 February 2021, the Tripartite Council of Ministers decided to set June 2021 as the deadline to complete the ratification process of the TFTA. This deadline, however, has been disregarded, as three more ratifications are still required in order for the agreement to enter into force. Recently, The EAC, COMESA and SADC Business Councils have also established the African Tripartite Business Council to mainstream the private sector into the TFTA work programmes.

Article 12 of the TFTA establishes that goods originating in any of the Tripartite Member/Partner States in accordance with the criteria and conditions set out in Annex IV on Rules of Origin shall be eligible for preferential treatment. Article 8 of Annex IV adds that products originating in any Tripartite Member State and used in further manufacture in another Tripartite Member State shall be treated as if they originated in the Tripartite Member State of further manufacture (so-called "cumulation of origin"). When ratified, the TFTA will allow the member States of the 3 RECs to combine originating materials and jointly share materials or production, so overcoming some barriers that such countries currently face. For example, Kenya, a member of EAC and COMESA, has frequently denied preferential tariff treatment to rice imported from Tanzania arguing that it was imported from SADC countries without receiving a “sufficient” transformation process able to confer it the Tanzanian origin.

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