Insight into Comesa-EAC-SADC Tripartite Free Trade Area

 The Tripartite Strategy strives to achieve economic growth through the reduction of tariff and non-tariff barriers to trade.

The strategy includes the implementation of programmes to design and roll-out the Tripartite Free Trade Area, harmonisation and implementation of trade and transport facilitation measures, and design and implementation of infrastructure to support trade.

The objective of establishing the Comesa-EAC-SADC FTA was to enhance market access, address the issue of multiple memberships and further the objectives of cooperation, harmonisation, and coordination of policies among the three RECs.

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Member States of the Tripartite and when it comes into force

The member States that have deposited their instruments of ratification include Angola, Botswana, Burundi, Egypt, Eswatini, Kenya, Lesotho, Malawi, Namibia, Rwanda, South Africa, Uganda, Zambia and Zimbabwe. These countries accounted for 75 percent of the Tripartite GDP in 2022.

 And after nine years, the Comesa-EAC-SADC Tripartite Free Trade Area (TFTA) Agreement, came into force on July 25, 2024 following the attainment of the required threshold when Malawi, Angola and Lesotho ratified the tripartite. The TFTA has attained minimum threshold of 14 ratifications required for entry into force.

More member partner States are expected to ratify and, as at July 20, 2024, several countries had made significant progress towards ratification of the agreement including but not limited to Tanzania, Djibouti, South Sudan, DRC and the Comoros.

With effect from July 25, the date which, under normal circumstances, member States can start trading and implementing all aspects of the agreement. More specifically, operationalisation entails finalisation of the various legal instruments required for implementation of the Agreement.

Why the Tripartite was established

The Comesa-EAC-SADC TFTA was established to promote economic and social development of the region by creating a large single market with free movement of goods and services to promote intra-regional trade. Among its objectives is to enhance the regional and continental integration processes. Building a strong TFTA will facilitate effective reduction of existing obstacles to intra-regional trade and investments.

 It will also be promoting value chain and industrial production and physical connectivity through infrastructure development; the three pillars necessary for sustainable economic growth and development.

Implementation of the Tripartite will not only expand market access in the three RECs but also open up space for greater investments, value addition, connectivity and in general sharing of “public goods” made possible through corridor development of the southern and eastern region.

 Coordination of tripartite activities is currently being undertaken on a rotational basis, with the SADC Secretariat being the current Chair. Comesa Secretariat is leading the Market Integration Pillar, SADC Secretariat is leading the Industrialisation Pillar while the EAC Secretariat is leading the Infrastructure Pillar.

It will be necessary to establish an appropriate institutional structure to coordinate implementation and technical management of the affairs of the Tripartite on behalf of the 3 RECs.

Read: Kenya eyes more regional trade after pact with two blocs kicks off in March

 The Comesa-EAC-SADC Tripartite is accelerating economic integration for the people of the Eastern and Southern African Region.

How the tariff lines for products will work under the Tripartite

Products that will be exchanged under the tripartite are defined in lists of tariff rates.

Under the tariff lines, generally, it is the importer that pays the tariff.

 For instance, importers from Malawi will declare the dutiable value of merchandise to the Customs Authority in the importing country and the final appraisal of the goods value is done by customs.

Most often it is the transaction value, the price actually paid by the buyer to the seller, that serves as the basis for the value appraisal.

The Tripartite level of ambition is 100 percent tariff liberation, except for general and specific security exemptions, of which 60 percent to 85 percent tariff lines are to be liberalised upon entry into force of the agreement and 15 - 40 percent of the remaining tariff lines are to be negotiated within a period of 5-8 years.

 Currently, SACU and EAC, both of which are Customs Unions, have exchanged tariff offers and concluded the first phase of negotiations on tariff offers with indications that on average 90 percent of their tariff books would be liberalised immediately at the start of trading under the Agreement.

Meanwhile, several other tripartite member states have based their tariff offers on the acqui, indicating that they have carried over the level of tariff liberalisation they have attained under the various FTAs in the specific RECs to which they belong.

 For example, those in Comesa and SADC such as Madagascar, Mauritius, Malawi, Seychelles, Zimbabwe, Zambia that have already attained highest levels of tariff liberalization would extend similar levels of ambition in the Tripartite FTA.

How the tripartite will boast inter regional trade

 The Tripartite is expected to boost intra-African trade in several ways.

 First, it overcomes the challenge brought about by multiple memberships, for instance, the duplication of efforts and conflicts of various programmes at least as far as the Members of the 3 RECs are concerned.

 Secondly, it significantly increases the size of the market for goods and services.

It should be remembered that the 29 Tripartite Member States represent 53 percent of the African Union's membership, more than 60 percent of continental gross domestic product ($1.88 trillion), and a combined population of 800 million.

With guaranteed reduced tariffs, the circulation of the goods within the tripartite region shall increase.

Under the tripartite, border crossing for goods and people from the 26 countries is expected to be smooth with less bureaucracy at the border.

The three pillars of the Tripartite, namely Market Integration, Infrastructure Development and Industrial development speaks clearly to the AU’s Agenda 2063 for sustainable development of the economies of Africa and the aspirations of the African Continental Free Trade Area Agreement (AfCFTA).