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‘Trade stifled by development levels’

EQUITABLE intra-regional trade, as espoused by the tripartite free trade area (TFTA), is being stifled by varying levels of economic development in different countries, a cabinet minister said last week.
The envisaged TFTA is composed of member states from the Common Market for East and Southern Africa (Comesa), Southern African Development Community (Sadc) and East African Community (EAC).
Regional Integration and International Co-operation minister, Priscilla Misihairabwi-Mushonga said individual countries in the region were unlikely to disrupt their national industrialisation interests in favour of regional industrial development objectives.
“The TFTA would encourage the opening up of markets to member states so as to facilitate trade, but each individual state needs to protect its own local industries.
“Without some form of protection, you end up messing up your own industrialisation process,” she said.
The minister said some countries were reluctant to reduce tariffs.
Misihairambwi-Mushonga however, said there was a commitment made by member states to assist each other in terms of working on the industrialisation aspect, following tripartite discussions at the grand free trade area forum in May last year in Namibia.
The existence of trade restrictions and bureaucratic regulations have also been fingered as key impediments towards regional integration as most of the concerned economies are reliant on revenue emanating from exports and import duties.
The TFTA integration process is to be centred on three pillars, namely: market integration, infrastructure development and industrial development, with the objective of addressing member states’ productive capacity constraints.
Critics said regional integration was characterised by ambitious targets yet member states had a drab implementation record.
For example, although governments affiliated to the TFTA last year adopted a roadmap for the establishment of the grand free trade area, with specific timelines for activities and an institutional framework relating to negotiations and their conclusion, the time-frames have not been closely observed.
In respect of tariff negotiations, member states are required to undertake national and regional consultations on amalgamating tariff liberalisation in each regional economic community and submit remarks to a tripartite task force before end of this month.
A researcher with the South Africa-based Trade Law Centre, Sean Woolfrey said instead of being a binding regional industrial policy, the language of the draft TFTA suggested an approach simply based on co-operation between states.
“The downside of this weaker approach is that it opens up the possibility of some member states forging ahead with domestic industrial policies based on national objectives, while other less proactive members fail to make substantial progress in this area,” said Woolfrey in a research paper.
“Such a situation could easily serve to exacerbate existing levels of inequality in industrial development in the region.”

Tariff negotiations

Under the tariff negotiations, member states that are presently participating in free trade areas are encouraged to extend the maximum level of tariff liberalisation achieved in their regional economic communities to all other TFTA states.

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