South Africa, Madagascar Sign Tripartite FTA
Twenty out of a total of 26 have now signed the agreement establishing the Tripartite Free Trade Area (TFTA), with Madagascar inking the document on 13 July 2017 in Antanarivo, the country’s capital city. Two days before, South Africa had signed the TFTA agreement during a meeting of the Tripartite Committee of Sectoral Ministers in Kampala, Uganda, which also saw progress on some of the remaining issues to be finalised, including the signing of “outstanding” annexes.
“I am proud that Madagascar today joins signatory countries. The signing of this agreement expresses our commitment, together with other member countries of the TFTA, to pursue a common destiny in which trade constitutes an important driver for development and growth,” said Madagascar’s Prime Minister Solonandrasana Olivier Mahafaly during the signing ceremony, emphasising the crucial importance of having a “rules-based system” in place in order to boost trade between TFTA members.
The TFTA spans three African regional economic communities, namely the East African Community (EAC), the Southern African Development Community (SADC), and the Common Market for Eastern and Southern Africa (COMESA). If successfully implemented, it will become the continent’s largest free trade area, with a combined GDP of around 1.3 US$ trillion and a market comprising 57 percent of the African population.
The 26-country free trade area is also meant, together with integration efforts deployed in the continent’s various regional economic communities, to set the stage for the broader Continental Free Trade Area (CFTA) currently under negotiations among the 54 members countries of the African Union.
Outstanding annexes approved
The TFTA was officially launched at a Summit held in Sharm El Sheikh, Egypt, in June 2015 (See Bridges Africa, 10 June 2015). At that time, however, all the annexes of the agreement could not be finalised, which several member states cited as a reason for not signing the agreement before these documents were adopted.
During the last meeting of the Tripartite Committee of Sectoral Ministers in Kampala, TFTA members finally completed and adopted outstanding annexes on rules of origin, trade remedies, and dispute settlement, and thus paved the way for more member countries to sign the agreement, with South Africa and Madagascar quickly doing so.
“All the annexures have been completed and adopted by the tripartite Sectoral Ministers Committee, enabling South Africa to sign the agreement,” reads a communiqué released by South Afria’s Department of Trade and Industry (DTI) after the signing of the TFTA agreement by Rob Davies, the country’s Minister of Trade and Industry.
The adoption of these annexes brings the TFTA one step closer to its entry into force, and member states are now working under an end-of-October 2017 deadline to complete the outstanding issues, in particular negotiations on tariff offers and the ratification of the agreement.
A total of 14 ratifications are needed for the TFTA to enter force. For the moment, however, Egypt is the only country that has ratified the agreement.
Regarding tariff commitments, some TFTA members have reported progress recently. DTI’s deputy director-general of international trade and economic development Xolelwa Mlumbi-Peter, for example, said in Kampala that tariff negotiations between the South African Customs Union (SACU) and the East African Community are well advanced and should be concluded by September. He also indicated that negotiations with Egypt, another important partner for South Africa and SACU, have started.
Looking ahead, Liberat Mfumukeko, who is chairing the Tripartite Task Force, reported that only limited progress has been achieved regarding the Agreement on the Movement of Business Persons and the second phase of negotiations.
The market integration exercise was initially divided into two different negotiation sequences. While the first phase focused on trade in goods, the second one, which was kicked off in 2015 at the Sharm El Sheikh summit, addresses trade in services and other trade-related issues, such as intellectual property, competition policy, and trade development and competitiveness. It was decided by the TFTA ministers that the Agreement on the Movement of Business Persons, for its part, would be negotiated under phase 1, but in a separate committee and a separate track.
Mfumukeko indicated that “studies on Phase II issues had been undertaken and disseminated and that TTF was in the process of mobilizing resources to facilitate the necessary consultative meetings,” according to an EAC press release.