Status of implementation of the Tripartite FTA

Progress in the Tripartite FTA achievements, challenges and
Helen Kenani (Trade Policy Expert)
COMESA Secretariat
[email protected]
Presentation at the RAME Conference
18-20 June 2014, Vic Falls
The 3 Pillars of the Tripartite FTA
Mark Integration, Infrastructure Dev, Industrial Dev
Market Integration
Infrastructure Development
Improving the efficiency of the internal trade
and transport network (road, rail, water and
air and including ICT and Energy). Addressing
supply side constraints
(addressing the regulatory and legal
framework); value addition; diversification;
enhancing productivity and competitiveness;
and the development of programmes which
will result in structural changes.
Industrial Development
Trade liberalisation resulting in the Free Trade
Market Integration-Scope and Coverage
Tripartite FTA Negotiations on Trade in Goods shall be in two
1st Phase (to be concluded by June
Liberalisation, rules of Origin, dispute
resolution, customs procedures and
simplification of Customs documents,
transit procedures, non tariff barriers,
trade remedies, technical barriers to
trade and sanitary and phyto sanitary
Movement of business persons will be dealt with during the first phase of
negotiations as a parallel and separate track by a separate Committee.
2nd Phase (to commence from
Negotiations to cover trade in services,
intellectual property rights, competition
policy, and trade development and
Status of TFTA Negotiations
Tripartite Trade Negotiation Forum (TTNF) has met Nine times and the
Tripartite Committee of Senior Officials six times and accomplished the
 Agreed on the interpretation of the tripartite FTA Negotiation Principles
(11) with a view to establishing a common understanding of the principles;
Established working groups on; Customs Cooperation, Documentation,
Procedures and Transit Instruments; Technical Barriers to trade (including
Standards and Metrology), Sanitary and Phyto Sanitary Measures and
Non Tariff Barriers; Rules of Origin and Trade Remedies and Dispute
Recognised the existence of the draft FTA Agreement and Annexes as the
starting point for the negotiations;
Agreed on a schedule for negotiations and adopted M&E Mechanism;
Agreed on modalities for negotiations on tariff liberalization;
Commenced text based negotiations.
Progress made-text based negotiations
Thematic area
Progress achieved
Consideration of the draft
TFTA Agreement.
Adopted more than 13 Articles.
These include Article 2, (Establishment of the TFTA); Article 3 (Scope
and Coverage); Article 4 (General Objectives); Article 6 (Principles);
Article 8 (National Treatment); Article 9 (Elimination of Import Duties);
Article 11 (Elimination of Non-Tariff Barriers); Article 12 (Elimination of
Quantitative Restrictions); Article 13 (Rules of Origin); Articles 26 and 27
on TBT and SPS respectively; Article on (General Exceptions) with
exception of sub-section on importation and exportation of precious and
strategic metals; and the Articles on (Notification of prohibited and
restricted goods); and on (Budget);
Bracketed 3 Articles. These include Articles on (Most Favoured
Nation Treatment); (Application/Prohibition of Export Duties) and Article
(General Exceptions) – relating to the importation and exportation of
precious and strategic metals
Agreed to Delete Articles relating to other pillars of the Tripartite and
relating to Phase II of the negotiations.
Customs Cooperation:
Rules of Origin:
Adopted Annex 5 on Customs Cooperation and Annex 7 on Transit Trade
and Transit Facilitation.
TTNF has cleared the majority of the Articles of the Annex on Rules of
Origin. The focus now is on the product specific rules. It was also agreed
that Tripartite Member/Partner States should not reopen discussions on
rules of origin on which there are commonalities (15%) among the three
RECs. The TWG on Rules of Origin also to continue work on the
remaining similar (29% and divergent (56%)set of rules.
Technical Barriers to Trade, Non-Tariff Barriers: Annex 3 on NTBs has been
Sanitary and Phyto Sanitary finalised except for 2 Appendices and Article 10 on
Measures and Non-Tariff Barriers. Dispute Settlement.
Non Tariff Barriers
The TTNF agreed there will be no re-opening of
discussion of Articles of Annex 3 except the said
Appendices and Article 10.
Draft TFTA Agreement and Annex Article 26 and Annex 9 on TBTs were finalised and
9 on Technical Barriers to Trade.
Draft TFTA Agreement and Annex Article 27 and Annex 10 on SPS were finalised and
10 on Sanitary and Phytosanitary adopted.
Trade Remedies and Dispute
Much more is till to be done to develop Trade
Remedies that are compatible with the WTO but which
Member /Partner States find ease to use.
Outstanding Work
Important outstanding issues which have to be finalised by June, 2014
include the following;
Negotiations on Goods
 12 Member/Partner States have prepared tariff offers. Quality of
offers based on the agreed modalities.
 Finalization of the Annex on Rules of Origin including the Annexes
on Trade Remedies and Dispute Settlement. Adoption of Annexes
on SPS, TBTs and NTBs by the TTNF.
 Completion of Negotiations on outstanding Articles including the 3
bracketed Articles of the Agreement (MFN, Export duties, Security
Exceptions) and Articles referred back to the Working Groups
(Customs cooperation and trade Remedies) for further work.
Outstanding Work
Negotiations on Goods
 Preparation of the post negotiations agreement road map
comprising of outstanding activities from the negotiation.
Phase 2 Negotiations
 Negotiations on the built in agenda: Trade in Services,
Intellectual Property, Competition Policy and Trade and
 Timely ratification domestication and implementation of the
Outstanding Work
Movement of Business Persons
 A Tripartite Technical Committee on Business Persons has
been established. It has adopted TORs, Rules of Procedure
and a Work Programme and schedule of negotiations.
 According to the TTBP Work Programme negotiations on
Movement of Business Persons should be completed by
June, 2014.
 Outstanding issues include: common methodology and
approach on the instrument to be negotiated on the
movement of business persons; categories of business
persons to be included in the scope; definition of business
persons; and whether this should be visa or non-visa regime.
Main reasons for slow progress on key issues
 Wide divergencies among the delegations on some critical
issues, such as thresholds and timeframes;
 Absence of informal brainstorming workshops faciliated by
experts, where expert analytical work on specific issues
would provide opportunities to appreciate the dimensions
and implications of issues and chart ways forward in light
of examined options;
 Taking too long on some issues without an appropriate
regard to the roadmap; for instance, the Tripartite FTA
negotiations have required a collection and examination of
more trade data well ahead of the negotiations, than any
other trade negotiations in the recent past;
 Technical and human resource capacity constraints that
could prevent proper adherence to the Roadmap.
Main reasons for slow progress on key issues
 Lack of consistency in participation in the negotiations
by experts from Member/Partner States.
 Inadequate resources by Member/Partner States to
finance Experts’ participation in the negotiations.
 A heavy trade negotiation agenda at other levels
competing for the same limited resources with TFTA
 Partner States have held fewer national stakeholder
consultation meetings than would be desirable.
 Difficult areas for reaching consensus, eg Rules of
Continental processes based on TFTACFTA
 The Continental FTA is scheduled for 2017 and is expected
to build on the TFTA.
 Therefore necessary to conclude on the TFTA Programme.
 According to the meeting of the 8th Ordinary session of the
Conference of AU Ministers of Trade (October, 2013), the
work on the CFTA and Boosting Intra African Trade should
be accompanied by capacity building programmes aimed at
strengthening the competitiveness of African economies, and
on building negotiating capacity and the implementation of
free trade agreements.
Industry Development Pillar
A Tripartite Technical Committee on Industrial Development has been
established. It has adopted its TORs and is in the process of finalizing
the Roadmap and Programme of Work on industrial development
The main outstanding activities include:
 Preparation of Tripartite Modalities of Cooperation in Industrial
 Harmonization and coordination of industrial policies to facilitate
intra-industry trade and promote business linkages in the Tripartite
 Development of competitive value chains in key industrial sectors
 Fostering of collaboration in science, technology and inovation to
facilitate sustainable industrial growth
Priority areas for support
Technical Assistance and Capacity Building support to the RECs
and Regional Member States
 to complete negotiations on the legal text of the tripartite FTA
and Annexes, to prepare for both the launch and post- launch
negotiations of Phase 2 i.e the built in agenda.
 to complete negotiations on the Movement of Business Persons
 Capacity building to focus on awareness creation, institutional
development, and availing financial resources required for the
successful and effective implementation of the agreement
(including Movement of Business Persons).
Priority areas for support
Capacity Building for implementation of programmes
for reducing trading costs by addressing sanitary and
phyto-sanitary measures (SPS) and Non- Tariff
Measures (NTMs)
Capacity building for Implementation of programmes
on trade facilitation focusing on customs cooperation.
Development of Industrial value chain action
plans; and
Support private sector participation in the
Points for discussion
The importance of concluding the negotiations and signing the TFTA Agreement,
on the basis of progress made and Articles and Annexes that have been finalized;
the outstanding issues can be in the built-in agenda for further work when the
TFTA is in force – this is what happens in other negotiations eg WTO
The need to make some quick progress on rules of origin – the current approach of
negotiating product-specific rules of origin will at best result in a TFTA based only
on 44% of tariff lines covering only 53% of intra-tripartite trade, ie lines that are
identical and similar; there is therefore need to revisit this and consider the
flexible approach of the COMESA and EAC rules of origin that provide for a number
of criteria to confer origin that can be chosen by the private sector for use as
The need to make some quick progress on tariff offers – while most of the
countries have made ambitious tariff offers (100% subject to reciprocity and the
possibility of safeguards to protect important industries), SACU has made the
lowest offer covering only 60% of tariff lines, when 56.3% of the SACU tariff lines
already have 0% MFN duty. The principle of variable geometry can be invoked to
proceed with an ambitious TFTA that provides a large market for trade and
End of Presentation;Thank you

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