Africa’s plans to open up a market of more than 600 million people in April this year suffered another setback after countries failed to approve the tripartite free trade area (TFTA) within the set timeline.
Also delaying the launch of the TFTA is the prolonged disagreement between the East African Community and the Southern African Customs Union over tax treatment of motor vehicles and dairy product imports into the EAC.
The TFTA, featuring the EAC, Common Market of the Eastern and Southern Africa, and the Southern African Development Community, was launched on June 10, 2015 in Egypt, to open up a market with a gross domestic product of over $1.2 trillion.
Its operationalisation is expected to pave the way for achieving the African Continental Free Trade Area (AfCFTA), which brings together all 55 member states of the African Union with a combined GDP of more than $3.4 trillion and a market of more than 1.2 billion people.
In June last year, the TFTA Council of Ministers set April 30 this year as the deadline for the 27 members of the three regional blocs to approve the agreement on the proposed free trade area.
The EastAfrican has, however, learnt that upon the expiry of this deadline only Uganda, Kenya, Egypt and South Africa had endorsed the pact.
Although all the 27 members have signed the agreement their commitment towards the implementation of the deal remains questionable going by the pace at which they are endorsing the agreement.
The agreement requires at least 14 countries to ratify before it takes effect. Most states had committed to ratify by end of September 2018.
Preferential tariff treatment amongst the member states of the TFTA is expected to start as soon as there is ratification of the agreement by 14 Member States and the rules of origin are in place.
Egypt, Malawi, Burundi, Angola, Comoros, DR Congo, Djibouti, Kenya, Tanzania, Sudan, Uganda, Zambia, South Africa, Swaziland, Zimbabwe, Botswana, Namibia, Rwanda, Seychelles, Libya, Madagascar and Mauritius, have already signed the agreement.
The have also failed to reach an agreement on tariff offers on sensitive items such as motor vehicles and dairy products under the TFTA framework.
The EAC and SACU held negotiations in Kampala last month but failed to agree.
At a tripartite Council of Ministers meeting in Cape Town on June 18, last year, the EAC and the SACU members also failed to agree and suspended negotiations to allow more time for consultation with stakeholders.
SACU comprises South Africa, Botswana, Lesotho, Namibia and Swaziland.
The EAC is reluctant to open up its market to motor vehicles and dairy products from the SACU, while the latter, which is largely controlled by South Africa, feels otherwise.
A bulk of South Africa’s trade is with SADC countries followed by Egypt, Kenya, Ethiopia and Uganda.
Kenyan Business Feed is the top Kenyan Business Blog. We share news from Kenya and across the region. To contact us with any alert, please email us to [email protected]