The East African Community has until March 2017 to ratify the Tripartite Free Trade Area (TFTA) agreement to pave the way for EAC goods to enter larger markets like South Africa, Egypt, Ethiopia and Eritrea.

At the Tripartite Trade Negotiation Forum held in Johannesburg from December 9 to 11, the EAC said it would ratify the agreement by the end of February 2017. The ratification will however will be on a transitional basis, as some annexes are yet to be concluded.

The bloc expressed concern that the delays may make it difficult to meet the June 2017 deadline set by the Tripartite Council of Ministers.

So far, 18 countries, including Kenya, Uganda, Rwanda, Burundi and Tanzania, have signed the TFTA agreement, but none has ratified it yet.

The TFTA brings together 26 members of the EAC, the Common Market for Southern and Eastern Africa (Comesa) and the South Africa Development Community (SADC).

The trade agreement was launched in Egypt in June 2015, establishing a single market for the 26 African countries. It will only come into force once ratification is attained by at least two thirds of the membership.

Peter Kiguta, the EAC Director General for Customs and Trade, said issues on trade dispute settlement were finalised.

“Issues on rules of origin are targeted for completion before  June 2017, as per the directive of the Tripartite Council of Nairobi meeting of October 30.

“The understanding reached will provide an interim arrangement to determine origin and confer the necessary preferential treatment on goods originating from the tripartite member/partner states as soon as the agreement enters into force,” Mr Kiguta added.

The tripartite partner states have agreed that where a trade dispute arises, recourse will be through consultations, with a view to finding an amicable resolution to the dispute including, but not limited to, the use of good offices, conciliation and mediation.

Rules of origin

Where an amicable resolution is not achieved, any party to the dispute will, after notifying the other parties, refer the matter to the Dispute Settlement Board, through the chairperson of the DSB, requesting the establishment of a Dispute Settlement Panel.

On rules of origin, members have agreed that where rules are common, 35 per cent ex-works costs — distribution and logistics — should be retained as an interim option. If enacted, such a move would mean that products on which the value-added criterion of 35 per cent ex-works cost applies could gain duty-free regional market access.

“The agreement is also on product-specific rules of origin,” said Mr Kiguta.

Although the provisions of the tripartite agreement favour a single value-added rule as in the EAC and Comesa regional agreements, negotiations are now moving from a percentage-based approach towards a product-specific approach, which will involve defining specific rules for product categories. The TFTA aims to liberalise all tariff lines, taking into account the general, specific and security exceptions.  

EAC partner states have agreed to liberalise 63 per cent of their tariff lines to the other TFTA partners, with 37 per cent of tariff lines to be liberalised and further negotiated.

Meanwhile, African countries have set December 2017 as the deadline for completion of negotiations on the establishment of the Continental Free Trade Area (CFTA). 

A report from the meeting of ministers and senior officials negotiating for the continent’s single market, held in Addis Ababa early this month, indicates that negotiations on the CFTA are behind schedule.

With the CFTA, African leaders aim, among other things, to create a single continental market for goods and services, free movement of business persons and investments, and expanded intra-African trade. The CFTA is also expected to enhance competitiveness at the industry and enterprise levels on the continent.

According to the director of the Economic Commission for Africa’s African Trade Policy Centre David Luke, CFTA negotiations should focus on enhancing competitiveness, deepening regional integration and access to global markets.

“In 2015, manufactured goods accounted for 42.8 per cent of intra-African exports compared with only 19 per cent of Africa’s exports outside the continent. Boosting intra-African trade through the CFTA is therefore crucial to accelerating structural transformation in Africa,” he said.