There have been several discussions in regard to opportunities that exist at regional trade. It has been noted that very few SME’s were trading regionally for different reason which included; SME’s have no capacity to produce enough to trade regionally, not aware of prevailing policies, poor infrastructure among other reasons.
African governments have realized the need to work together in boosting regional trade; it is in this regard that institutional instruments such Development Community Treaty SADC – 1992. Treaty for the Establishment of the East Africa Community EAC – 1999, Treaty of the Establishment of the Common Market for Eastern and Southern Africa COMESA – 1994.
10th June 2015 -3rd Tripartite Summit Heads of State and Government of Member/Partner States of COMESA, EAC and SADC signed the instruments for the establishment of the COMESA-EAC-SADC Tripartite Free Trade Area. Tripartite Free Trade Area has a total of 26 countries with a population of 632 Million controlling 58% of Africa’s GDP with a GDP USD1.3trillion
East Africa Countries controls 10% in traditional export and 6% in non-tradition export this is in context of extra-Africa trade. It’s surprisingly how little it contributes to Intra African trade with only 2% controlling total value of USD 22billion.
Development of trade and investment is essential to economic integration that will create new opportunities for a dynamic and robust business sector. TFTA underscores the critical importance of development integration as a vehicle for bolstering interregional trade. It will bring about wider market of local products, increased trade and investment flows, regional infrastructure development and enhanced competitiveness.
Challenges will be felt while implementing and allowing these treaties to work. Some of these challenges include; diverging positions between the RECs with respect to trade rules harmonization. Tariffs and Non-Tariff Barriers including Standards, perspectives and challenges surrounding the harmonization of Rules of Origin – Contrary to the assumptions that countries in the ESA would accede to WTO prescriptions of Common Rules of Origin and Value Addition (VA) of 35% ex-works cost, the same has not been tenable. Trade Remedies and Countervailing Measures and Dispute Resolution are still outstanding and Infrastructure deficiencies.
As we face challenges there are many prospect as we move forward, there is a strong shift from traditional undifferentiated staple crops towards increased consumption of fruit, vegetable and vegetable oils, fish, meat and dairy products. A case for strengthening Sanitary and Phytosanitary protocols
Fast track Harmonization of regulations for example EAC and COMESA have harmonized Seed Trade Regulations – Domestication awaiting publishing in Kenya. Grain Trade Standards harmonized but lack harmonized interpretation and enforcement framework, SPS standards harmonized
Trade Remedies and Dispute Resolution and Harmonization of Standards, areas where complete agreement is still to be reached and why we need to build capacity for evidence based advocacy.
President of Kenya H.E Mwai Kibaki, presenting a case for deepening regional integration at the opening of 25th FAO Regional Conference for Africa on 19th June 2008
‘…I now wish to turn my attention to the subject of intra Africa trade. As the food crisis bites deeper and global food prices skyrocket, we are finding it more difficult to source food from the west. The money in our pockets is becoming increasingly inadequate to purchase the same quantities as before. Yet we have not developed capacity for trading with each other. With close to one billion people we have a large and untapped market for trade in goods and services including food. Intra Africa trade can greatly benefit the continent through the development of the necessary infrastructure to enhance connectivity, including road and railways network, airfreight as well as the communication systems in the continent. Rationalization of tariffs and non-tariff barriers within the continent and encouraging the merger of the existing economic blocks into one economic union has the potential for trade expansion and stabilizing food security within the continent….’
Africa Agribusiness Academy 