From BlouinNews. Story by Michael Lerner.
In Egypt on Wednesday, the Tripartite Free Trade Area (TFTA) will be signed.
Hailed as a “monumental step” by Egypt’s Minister of Industry and Trade, Mounir Fakhri Abdel Nour, the Tripartite Free Trade Area will link the East African Community, the Southern African Development Community, and the Common Market for Eastern and Southern Africa to create an open market spanning half of the continent — a modern-day economic version of Cecil Rhodes’ “Cairo to the Cape” vision of African unity.
The Tripartite Free Trade Area will cover 26 countries with a combined population of 625 million and a collective gross domestic product of more than $1 trillion.
It will include states all along the spectrum of African development from the larger and more industrialized economies of South Africa and Egypt to frontier economies with strong growth potential such as Ethiopia, Angola, and Mozambique. “What we have realized is that having one trade regime is better than the costly multiple trade regimes,” said Sindiso Ngwenya, the secretary general of the Common Market for Eastern and Southern Africa who is leading the negotiations between the three blocs.
Business leaders who gathered for the World Economic Forum on Africa in Cape Town last week welcomed the coming Tripartite Free Trade Area. Participants noted that currently just 12 percent of African countries’ total trade is with each other — compared to some 55 percent in Asia and 70 percent in Europe, according to AFP. However, intra-African trade is expected to grow substantially in the coming years under the Tripartite Free Trade Area.
While a landmark achievement in and of itself, the Tripartite Free Trade Area is just an intermediate step in a much more ambitious agenda. “The launching of the Tripartite Free Trade Area is the first phase of implementing a developmental regional integration strategy that places high priority on infrastructure development, industrialisation and free movement of business persons,” organizers said on the website of this final Tripartite Free Trade Area conference.
Furthermore, the Tripartite Free Trade Area is meant to set the stage for a proposed continental free trade agreement. According to an African Union roadmap issued in 2011, the continental free trade agreement would launch in 2017 and a continental customs union would be formed by 2019.
Expect delays. The Tripartite Free Trade Area was supposed to roll out at the end of 2014 but was pushed back to work out tricky issues such as managing trade disputes. The African Union estimates that the continental free trade agreement would increase trade within Africa by at least 25-to-30 percent in the following decade.
Read more at BlouinNews.
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