31 Jan 2018

Botswana has signed COMESA-EAC-SADC Tripartite Free Trade Area Agreement becoming the 22nd member state to join the agreement.

Speaking at the signing ceremony, Minister of Investment, Trade and Industry Mr Vincent Seretse said the process started as far as 2001 when three regional blocks namely Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC) and the Southern African Development Community (SADC) agreed to formalise negotiations for Free Trade Area which has a total of 26 members or partner states.

Mr Seretse said Phase 1 of the negotiations covered core Free Trade Agreement (FTA) issues of tariff liberalisation, rules of origin, customs procedure and simplification of customs documentation, transit procedures, non-tariff barriers, trade remedies and other technical barriers to trade and dispute settlement.

He said Phase 2 will cover trade in services, trade related issues including Intellectual Property and Competition Policy adding an agreement on Movement of Business Persons was also being negotiated in parallel Phase 1 negotiations.

“The Tripartite Free Trade Area will boost intra-African Trade as a result of elimination and reduction of tariffs and non-tariff barriers as well as market expansion,” he said.

He noted that the Tripartite FTA was also expected to serve as one of the building blocks of an African Economic Community, thus facilitating deeper regional and continental integration in Africa as a whole.

He noted that this agreement resonated well with the country’s National Development Plan (NDP) 11 aspirations of becoming an export-led economy.

Minister Seretse said local products which have been identified under this Agreement as having export potential included veterinary vaccines, pharmaceutical products, electrical and machinery products, plastic products, salt and salt products, carpets and other textile floor covering.

On other issues, Mr Seretse said it had been noted that in 2016, Botswana exported goods to the tune of P997 million to its major trading partners in the Tripartite Region excluding SACU Member States and at the same time importing goods to the tune of P1.9 billion which aggregated a negative trade deficit of P945 million.

Notably, he urged the Secretariat to assist member states to improve their production capacities citing that to build on capacities, they could take advantage of the Phase 2 negotiations that would look into Trade in Services and the Industrial Pillar which aims at developing and improving capacity in the Tripartite.

In addition, Mr Seretse said the negotiations would look into Infrastructure Development Pillar which aims enhancing connectivity and reducing costs of doing business.

For his part, secretary general of COMESA who was also chairperson of the Tripartite Task Force at the signing ceremony Mr Sindiso Ngwenya said the agreement would dismantle trade barriers among the 27 member states and pave way to integrating the African continent.

Mr Ngwenya said the agreement had taken into account the peculiarities of countries in the region.

He said the decision to establish a single market through a merger of the Free Trade Areas of COMESA, EAC and SADC was first taken in 2008 having realised the importance of a larger market to boost inter-regional trade and attract investments.

Mr Ngwenya said leaders realised that just opening up markets will not increase the regional share in global trade nor can it contribute to poverty alleviation, hence they adopted a developmental approach to regional integration anchored on three pillars which are market integration, industrial development and infrastructure development pillars.

“Industrial development, infrastructure development and trade facilitation are some of the key priority areas for the Tripartite FTA in recognition of supply side constraint, poor connectivity and high cost of doing business in the region,” he said.

SADC deputy executive secretary Dr Thembinkosi Mhlongo said the Tripartite FTA agreement has the potential to boost trade in Africa and accelerate development by creating a huge single market of about 700 million people with an estimated Gross Domestic Product of over US$ 1.4 trillion.

Dr Mhlongo said that the tripartite should also not be viewed in isolation, but rather as an integral component of the larger continental FTA which will soon come into realisation with the signing of the legal Continental Free Trade Area instrument during the planned AU Extra-Ordinary Summit in March this year.

He urged Botswana to take a holistic approach to all the FTAs that the country was party to and capitalise on the opportunities these presented in various sectors including under the mooted regional value chains they were looking forward to in order to unlock the SADC Industrialization Strategy and Action plan. ENDS