For want of warm bodies, a trading kingdom is being lost - The East African

For want of warm bodies, a trading kingdom is being lost

Tuesday March 5 2019

Understaffed Comesa Secretariat

Each time an on-the-spot verification is needed, one senior staff member must travel, leaving Comesa's Directorate of Trade and Customs severely short-handed. If two verifications are needed at once, one dispute must wait – forcing businesses to have a greater inclination to look for non-Comesa goods thereafter. ILLUSTRATION | JOHN NGARI | NMG 

ARCHIE MATHESON
By ARCHIE MATHESON
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Though discussions of African trade during 2018 were dominated by the quest to establish a Continental Free Trade Area, its fruits are unlikely to be realised any time soon.

Even if ratified in 2019, its outcomes will take many years to unfold because substantive discussions on rules of origin and tariff lines have yet to happen.

By contrast, should the Tripartite Free Trade Area be ratified by the requisite number of countries – as seems possible in the coming months – over 90 per cent of tariff lines have already been agreed, meaning actual implementation would take place in the shorter term. Indeed, combining Comesa, EAC, and SADC means having over half the continent’s nations under one big roof and making TFTA the primary building block of any CFTA.

In turn, the creation of TFTA depends heavily on existing procedures and ideas from Comesa. Thus, it would be fair to say that Comesa is a driving force of regional economic integration.

Within the bloc, below the ultimate decision-makers – the Comesa Authority and Council of Ministers – is the brains and engine of integration, the Secretariat. For trade matters, it is the Secretariat’s duty to support the drive for higher intra-bloc trade in line with established protocols.

And within the Secretariat there is a department that puts this responsibility into practice, an office small in size but large in mandate: the Directorate of Trade and Customs.

Given the role of Comesa on the continental stage, it is perhaps the most important office related to African trade, active in three main areas.

The Directorate helps to resolve trade disputes, relating to both rules of origin and non-tariff barriers, covering both trade in goods and trade in services. It is called upon to give official opinion, share recommendations, arrange dialogue between disputing parties, lead on-the-spot verifications, and, if necessary, refer cases to the Council of Ministers.

In January 2019 alone, three full interventions were needed and successfully completed.

It develops ideas and policies that are then presented to the Council for approval, seeking greater harmonisation and introducing trade facilitation measures.

As an example, it was the Directorate that developed the NTB Reporting System that was implemented by Comesa, subsequently adopted by the TFTA, and due to be discussed for incorporation into CFTA at this month’s Unctad meeting.

Extensive support

Furthermore, it leads trade negotiations on behalf of Comesa with multiple trade partners. These include talks on TFTA, CFTA, EPAs with the EU, Agoa with the US, and bilateral agreements with numerous countries.

By providing extensive support for Comesa’s Council of Ministers, the Directorate is the engine room that facilitates the effective functioning of free trade across the bloc, and beneficial trade beyond.

For an office with such far-reaching responsibilities, it would be reasonable to expect an array of specialists, sufficient in number to cover the rules of origin, NTBs, and small-scale trade issues that arise under Trade in Goods, or the challenges posed within the 12 separate sectors that sit under Trade in Services; experts to drive improvement in trade facilitation; and negotiation specialists for the multitude of international trade agreements.

Yet, staggeringly, the Directorate has only four full-time staff: a director, senior trade officer, senior Customs officer, and a senior research fellow. They are assisted by no more than a handful of shorter-term contract staff.

Although through its Trade Facilitation Regional Programme, the EU will shortly fund two new project staff to deal with small-scale trade, total numbers are chronically insufficient. The consequences for Comesa members, importers, and exporters are costly – not through a lack of will or ability, but a lack of funding and corresponding capacity.

When trucks or containers are held at land borders or ports, they incur charges daily; resolutions are required within days, rather than weeks or even months. Often these charges are easily avoidable, but instead result in needless costs for exporters and importers – and ultimately producers and consumers.

As an example, each time an on-the-spot verification is needed, one senior staff member must travel, leaving the Directorate severely short-handed.

If two verifications are needed at once, one dispute must wait – one of several instances was in May 2017, when Kenyan food and beverage importers incurred huge expenses as their containers of Mauritian industrial sugar were held waiting in Mombasa, since the relevant official was tending to an Egypt-Sudan dispute over ceramics. These manufacturing businesses lost money, and had a greater inclination to look for non-Comesa sugar thereafter.

The team is not large enough to manage intra-Comesa issues, let alone negotiations relating to regional integration and global trade. Can member states be sure that they will be getting the best possible trade deals?

Further, there simply isn’t the bandwidth to dedicate time to additional innovative trade facilitation development, or to encourage and secure member endorsement of harmonisation procedures.

Having been elected Comesa’s new Secretary General, Chileshe Kapwepwe suggested that opportunities offered by Comesa and further regional integration should be seized. But he also highlighted that this requires a well-managed, well-resourced Comesa that is appreciated by its member states.

Together with development partners, members states need to respond to this call to action, for while they extol the virtues of the more distant CFTA, they can realise more immediate benefits by investing in an overworked office that is central to a functional African trade.

Archie Matheson is head of policy and analytics at Botho Emerging Markets Group.

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