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ECOWAS lags as other RECs seal pact on CFTA

ECOWAS lags as other RECs seal pact on CFTA

By Femi Adekoya

Preparatory to the 2017 establishment of a Continental Free Trade Area (CFTA) in Africa, three Regional Economic Communities (RECs)—the Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC) and Southern African Development Community (SADC)—have reached an agreement to expedite the process towards the operationalization of the tripartite Free Trade Area by finalizing outstanding issues.

With this development, the three regions have made a bold move to realize the African Union (AU) 2017 target ahead of the Economic Community of West African States (ECOWAS) region, which is still bedeviled by other trade issues.

Indeed, the tripartite agreement would see the establishment of a single market for the 26 African countries in the Eastern and Southern African Region, while outstanding issues like the elimination of import duties, trade remedies and rules of origin, as well as the commencement of Phase II negotiations covering trade in services, cooperation in trade and development, competition policy, intellectual property rights and cross border investments would be addressed under the outstanding issues.

The President of African Organization for Standardization (ARSO, Dr. Joseph Odumodu, who is also the Director-General of Standards Organization of Nigeria (SON), noted that by 2017, the African standardization mechanism should be able to deliver a benchmark that would be acceptable to all in the continent.

He explained that continental trade deal can only become achievable if standards issue is addressed as well as other bilateral trade agreement concerns. Odumodu added that African countries need quality infrastructure to kick-start the CFTA.

“The Continental Free Trade Area means that Africa will become one common market, just like the European Union markets. We will collapse all boundaries, depending on what the African Union Heads of State agree. We may not apply any kind of tariffs because we need to break down the tariffs that are barriers to trade seamlessly with each other.

In doing that, we must ensure that we have all attained a comfortable level of development in terms of quality infrastructure”.

“These circumstances help to explain why agricultural development is such a powerful tool for reducing poverty in Africa and eliciting economic development,” the ARSO boss explained. In a statement obtained by The Guardian, the Executive Secretary of the Economic Commission for Africa (ECA), Carlos Lopes lauded the tripartite free trade area agreement reached by three Regional Economic Communities (COMESA, EAC and SADC) describing it as “a step in the right direction for the continent.”

African countries committed themselves to economic integration in 1991 through the Abuja Treaty, which came into force in 1994 with the intention of moving towards the African Economic Community.

The process of this integration would entail RECs serving as building blocks. The harmonization of trade policies through the Tripartite Free Trade Area is yet another building block,” he added.

While not all countries have signed on to their region’s tripartite agreement and the negotiations towards the 2017 deadline for the establishment of the CFTA will need to address some thorny issues, Lopes stressed that the principle at work is that of ‘variable geometry’ as not all countries are ready at the same time.

He cited the 2015 Economic Report on Africa published by the ECA stating that deepening market integration is one of the necessary conditions for industrialization in Africa. The tripartite agreement, he added, “has set a benchmark for the CFTA, as it demonstrates it can be done.”

There are expectations that countries will complete the negotiations in the next 12 months. This sets the stage for deepening the agreement. In the meantime, the ratification of the CFTA, which requires a minimum of 14 countries to come into force, will begin.

In her statement to the Executive Council, the African Union Chairperson, Dr. Nkosazana Dlamini Zima said that trade amongst African countries remains below global standards, although a number of regions through their respective Economic Communities are making progress. – especially in the East African Community, in SADC, ECOWAS and COMESA.

She noted that the trade agreement reached by the tripartite and the launch of the African Continental Free Trade negotiations this year, “are all aimed at growing trade amongst ourselves and therefore jobs and creation of wealth.”

 

 

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