What’s at stake
- A free trade area is a region that encompasses a trading bloc whose member states have signed a free trade agreement, eliminating barriers to trade such as tariffs, import quotas and preferences on most (if not all) goods and services traded between them.
- The plans for the creation of a Tripartite Free Trade Area were proposed in Kampala, Uganda, on October 22, 2008, when the heads of State of member countries of Comesa, EAC, and SADC.
- The grand free trade area encompassing 26 countries with a combined population of nearly 625 million people and a total GDP of $1.2 trillion presents huge opportunities for member countries seeking to diversify into new export markets.
- The EAC is looking into new markets, especially in South Africa, Mozambique, DR Congo, Eritrea, Djibouti, Zambia and the oil-rich Angola, to bolster its exports. Among the exports from the region are manufactured products, foodstuffs, steel and building and construction materials.
- The EAC has a combined population of 143.5 million and a GDP of $110.3 billion. Data from the EAC secretariat shows that in 2013, the total exports from the intra-EAC trade amounted to $3.5 billion while the total imports amounted to $ 2.31 billion, thus giving an intra-trade deficit of $922 million.
- Among South Africa’s exports to other African countries are iron and steel, precious metals, mineral products, transport equipment and chemical products. Its imports include mineral products, textile and textile products, prepared foodstuffs and footwear.
- According to the FTA agreement, the member states shall progressively eliminate import duties and non-tariff barriers to trade with each other. Goods shall be eligible for preferential treatment if they are originating goods in any of the tripartite member states.