The South African Minister of Trade and Industry, Rob Davies, has expressed
the opinion that the planned roll out of the proposed tripartite free trade
agreement (FTA), between the East African Community (EAC), the Common Market
for Eastern and Southern Africa (COMESA) and the Southern African Development
Community (SADC), may “hit a snag” when negotiating on trade in
manufactured goods between the member countries.
At the Tripartite Summit held in June 2011, the member countries’ Heads
of State signed an agreement to launch talks and adopted the roadmap for the
establishment of the FTA. The first phase of negotiations on allowing the free
movement of goods is expected to take three years. A second phase will then
tackle trade in services and other issues.
It has been confirmed recently that preparations are progressing well towards
the commencement of substantive negotiations for the combined FTA, which could
create a larger regional market of 26 countries with a combined gross domestic
product of over USD830bn and 530m people. A tripartite agreement would open
the borders of approximately half of the African continent, spanning the entire
southern and eastern regions of Africa - from the Cape to Cairo.
However, while addressing a forum entitled "From Cape to Cairo: Prospects
for Free Trade in Africa" at the Centre for Conflict Resolution, Davies
said he expected there to be very tough negotiations over the industrial development
component of the initial three-year roadmap.
He disclosed that rules of origin - where products were really manufactured
– would be a difficult question regarding goods produced in some other
countries.
"A number of countries are opening up special economic zones with a number
of other countries which are coming in, probably bringing the labour force coming
from that country,” he pointed out. "Are we going to let products
from that source come into the FTA, is that going to be a qualification? Those
are going to be some very, very tough nuts (to crack)."
Davies noted that the negotiations over trade in manufactured goods in the
FTA will be a particular concern to South Africa, with the country's current
drive to ramp up industrialisation through the Industrial Policy Action Plan,
launched last year. But, unlike its exports to the rest of the world, a high
percentage of South Africa's exports to the rest of the continent were already
made up by value-added products.
LAWANDTAX-NEWS.COM
