In what has been described by experts in regional integration as a major milestone, the agreement between the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC), and the Southern African Development Community (SADC), is paving way for 14 countries that have ratified the agreement, to trade freely.
The COMESA-EAC-SADC Tripartite Free Trade Area (TFTA), which comes into force today, July 25, 2024, comprises 29 countries representing 53 per cent of the African Union membership, which is more than 60 per cent of the continental gross domestic product (GDP), and a combined population of 800 million people.
As stated in article 4 of the Tripartite Agreement, the TFTA has four major objectives which include promoting economic and social development of the region, as well as enhancing the regional and continental integration processes, among others.
Thanks to the political goodwill of the African Union member states, the agreement establishing the Africa Continental Free Trade Area (AfCFTA) was adopted in 2018 and operationalised in January 2021.
With the entry of the TFTA, are the two initiatives conflicting?
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"The Tripartite is not out of sync with the CFTA,” said Jacinta Kiruthi, the CEO of In-Trade Africa, insisting that the Tripartite agreement does not conflict with the CFTA, instead, it complements the initiative.
"While both are free trade areas, the TFTA is composed of advanced regional economic communities; two customs unions (EAC and SADC), and one common market (COMESA), putting it at a higher level of integration,” she added.
Regional economic integration is in different progressive levels, starting from a preferential trade area to a free trade area, a customs union, a common market, a monetary union and finally a complete political integration.
Kiruthi said that the TFTA will help accelerate integration on the continent.
"The Tripartite will force the rest of the continent to move faster towards either a customs union or a common market, thus accelerating integration,” she said.
Road to integration
As regions move from one level of integration to another, the regulations become more complex.
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Daniel Amateye Anim, Chief Economist at Policy Initiative for Economic Development Africa, told the New Times that the Tripartite has great advantages but policies and regulations have to be aligned with the AfCFTA.
"The Tripartite will create a unified market, increase intra-Africa trade and enhance Africa’s competitiveness in terms of trade within the global economic environment,” he said.
"However, the challenge is how to synchronise the regulations and policies to seamlessly fit into the CFTA, without which, the countries in the Tripartite will prefer to operate within their own bloc,”Anim added.
AfCFTA was conceived a few years ago based on the idea that the continent needed to increase trade among member countries. However, countries were already trading amongst themselves through regional economic communities such as EAC, COMESA, and SADC, to mention but a few.
According to John Bosco Kalisa, former CEO of the East Africa Business Council and a trade economist, these regional economic communities are the pillars of AfCFTA.
"The CFTA did not come to replace regional economic communities, but rather build on them. Based on the work already done by the Tripartite in terms of laying out the modalities of negotiations, structures, rules and regulations, the integration process has been simplified for the CFTA,” he said.
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Despite the anticipated increase of intra-African trade after the operationalisation of the AfCFTA, various reports show that Africa continues to trade more with outside countries.
Executive Director of SEATINI Uganda, Jane Nalunga, cautions individual countries in the Tripartite against rushing to sign third party agreements such as the Economic Partnership Agreements (EPAs), saying they drawback the concept of regional integration.
"Individual countries that have subscribed to TFTA should refrain from signing and concluding agreements with third parties which will deter regional integration,” she noted.
Nalunga indicated that there are lessons that can be drawn from the tripartite as the continent embarks on the implementation of AfCFTA.
"The TFTA has taken a phased approach to implementation, allowing countries to gradually meet their commitments and adjust to the new trade environment. The AfCFTA can potentially adopt a similar phased approach, allowing for gradual tariff reductions and the progressive elimination of non-tariff barriers,” she said.