Intra-COMESA Trade through Micro, SME Development

The COMESA integration has largely been premised on the promotion of trade among the Member States. To this extent, trade liberalization and trade facilitation have been the hallmark of the activities that the region has been involved in. The attainment of the Free Trade Area in 2000 and the launch of the Customs Union in 2009 have been celebrated events in our journey. In addition, COMESA has established institutions necessary for the furtherance and support of regional integration such as the PTA Bank, the Clearing House, ZEP-RE, Leather and Leather Products Institute, Regional Investment Agency and the African Trade and Insurance Agency (ATI).

The multi-lateral trading system has been one that has inspired trade policy both at the regional and at the national level because it is rules-based. The need to comply with the multilateral level rules largely informs negotiations at the regional level while the trade policy reviews done by the World Trade Organisation under the Trade Policy Review Mechanism provide useful surveillance of national trade policies.

In practice, the trade policy reviews have two broad results: they enable outsiders to understand a country’s policies and circumstances, and they provide feedback to the reviewed country on its performance in the system.

The eighth WTO Ministerial Conference held in December 2011 in Geneva registered some positive gains for developing countries. In this regard, the procedures for acceding to the WTO were streamlined for Least Developed Countries which should make it relatively easier for our LDC non-WTO Members to accede to the WTO. Further, the 8th WTO Ministerial Conference adopted a waiver to enable developing and developed-country members to provide preferential treatment to services and service suppliers of least-developed country (LDC) members for a period of fifteen years. LDCs in our region should spare no time in utilizing this services waiver while it lasts.

After concerted efforts by AGOA eligible countries and the Secretariat, the US Government has now extended the third country fabric provision to 30 September 2015. We will now implore the US Government to extend the AGOA for a long and sustainable period beyond 2015 and synchronise the third country provision expiration with that of the AGOA.

The USA legislated for the African Growth and Opportunity Act (AGOA) in the year 2000 to offer eligible sub-Saharan countries duty-free access to the US market for eligible products and to increase US investments in Africa. Currently 12 of the 19 COMESA Member States have been designated as eligible for AGOA benefits. About 6,400 products are eligible for duty-free entry into the US market provided they meet the AGOA rules of origin and, in the case of agricultural products, SPS requirements.

An issue of particular importance to the AGOA eligible countries is the third country fabric provision which allows for global sourcing of the fabric which can then be used to make clothing and apparel for export to the US on a duty-free basis. This provision was due to expire on 30 September 2012 while the overall AGOA expires on 30 September 2015. More than 95% of the clothing and apparel exports to the US under AGOA are made from third country fabric.

As part of our trade policy, we need to co-operate with the trading partners outside our region for the benefit of all our countries. To this extent, you will recall that Council at its Thirtieth meeting in Lilongwe, Malawi, in 2011 established a Joint Study Group (JSG) between COMESA and India to negotiate a COMESA-India Comprehensive Economic Partnership Agreement that may lead to a Free Trade Area. The first meeting of the JSG was held in Lusaka to set the ground for the negotiations. India is one of the BRICs nations that is registering strong and robust growth and therefore increasingly becoming an important market. Early engagement with such economies will pay dividends going forward.

Closer to home, the Tripartite process which was given a major boost at the inaugural Tripartite Summit held in this country in October 2008 has progressed well with the legal and institutional structures for the negotiations put in place. The second Tripartite Summit held in June 2011 in Sandton, South Africa launched the Tripartite Free Trade area (TFTA), negotiations, negotiations agreed on the principles, and determined the three pillars of the TFTA which are: market integration, infrastructure development and industrialization.

Since then, the Tripartite Member States have exchanged trade and tariff data which will assist in the TFTA negotiations. The pioneering and envied work on the TFTA is progressing well and we hope that the TFTA will be in place by 2014.

By Mr Sindiso Ngwenya
Secretary-General, COMESA.