The attorney general has given the green light for Namibia to sign the declaration of the Tripartite Free Trade Agreement (TFTA) between the Common Market of Eastern and Southern Africa (COMESA), the Eastern African Community (EAC) and the Southern African Development Community (SADC), slated for Egypt today.
President Hage Geingob joined other heads of state from about half of the states of Africa who together represent a market of 625 million people, and a gross domestic product of over US$1.2 trillion.
With this agreement, Africa is set to make its first fundamental and practical move towards a virtually integrated region with enhanced economic inter-linkages.
Here is an agreement billed as an important constituting foundation for the continental free trade area, which Africa is set to discuss at a summit in South Africa next week.
Yet the launch also ushers in a period of back-to-back, and crucial, negotiations on tariff offers, rules of origin and a host of other guidelines over the movement of goods and people, which the 26 member countries have yet to finalise.
Namibia arrived in Sharm El Sheikh with an understanding to in the meantime sign the declaration only, while allowing for the continuation of negotiations on outstanding issues before stakeholders arrive at a final TFTA draft agreement.
“We cleared everything and the declaration is prepared for signing,” Namibia’s Attorney General Sackey Shanghala responded yesterday to New Era regarding last week’s cabinet decision not to sign the TFTA agreement during the summit in Egypt.
Shanghala said Namibia, with fellow SADC member states, agreed at the last joint COMESA-EAC-SADC ministerial committee meeting in Dar es Salaam, Tanzania, on May 29 and 30, that “we would not hold anything back as SACU – those outstanding issues can still be negotiated after the signing of the declaration.”
Cabinet had earlier said a “signature could be considered when negotiations on the outstanding work have been finalised, and the draft agreement, as well as all its components have been cleared by the Office of the Attorney General.”
Local trade commentator, Wallie Roux, says Namibia’s precautionary step is understandable, because of “lessons learnt from the Economic Partnership Agreement with the European Union”.
Schedule one on the tariffs and schedule four on the rules of origin are two main issues that continue to give Namibia a headache, according to Shanghala and Namibia trade policy experts.
While member states earlier agreed the TFTA use a harmonised rules of origin between COMESA, SADC and EAC, further expert analysis has unearthed “a series of differences” in the rules of origin of the three economic blocs, with SADC preferring “product specific rules”, commented the southern trade think tank TradeMark Southern Africa.
Rules of origin are trade instruments to accurately reflect the origin of the product imported in, or through, the country and to keep accurate trade data needed to determine whether or not to apply tariff and other trade safeguarding measures.
In the meantime, the SADC meeting of two weeks ago asked the ministers from three economic blocs to speed up the exchange of tariff offers in the next 12 months.
“Member states that had not exchanged tariff offers do so within 6 to 12 months and those that have exchanged and are negotiating tariff offers should endeavour to conclude within 12 months … rules of origin are a crucial element for the TFTA and therefore member states need to expedite work to finalise outstanding areas and agree on the tripartite rules of origin that will be applied in the new TFTA,” said the SADC secretariat last week.
Analysts remain adamant that for the TFTA to be sustainable the three economic blocs need to address the overlapping membership, which can hinder harmonisation processes as well as the enforcement of unified rules of origin, as well as the lack of economic diversification and infrastructure deficiencies.
When operational, the TFTA is expected to become “a means for enhancing economic inter-linkages and enabling the business environment to unlock regional potentials, scale up productive capacities and competitiveness, stimulate beneficiations and value chains, and enhance technological set-ups.”
More importantly, the TFTA will also address the issue of overlapping membership that has resulted in a number of challenges for the region’s business and trading communities.