WHAT ARE THE LESSONS TO BE LEARNED FROM THE EXPERIENCE OF COMESA IN REGIONAL INTEGRATION presentation by Tasara Muzorori, COMESA Membership and vision • Formed in 1981 as PTA and transformed into COMESA in 1994. • Current membership 19 members stretching from southern to northern Africa. Some members of COMESA are also members of AMU, EAC, SADC,IGAD, IOC. • Vision is to become a fully integrated, internationally competitive regional economic community in which there is prosperity evidenced by high standards of living for its people, political and social stability and peace, and a community within which goods, services and labour are free to move across national borders. STATUS OF INTEGRATION • Notified to the WTO as a regional organisation on June 29, 1995 • Is recognised by the African Union as one of the RECs for eventually building the African Common Market • Attained FTA status in Oct. 2000 initially with 9 members, now 13. • Envisages moving into a CU in 2008 REGIONAL INTEGRATION ACTIVITIES • A number of activities have been put in place by COMESA to improve the regional integration and to facilitate trade. • In the early days, a Clearing House was established to minimise the use of hard currency in intra-regional trade transactions • Comesa has also adopted an outline of a customs document (the COMESA-CD) which is simplified and in some cases has eliminated upwards of 30 separate documents. Regional Integration activities Cnd • COMESA has rules of origin to ensure that goods accorded preference result from some level of activity generated from within the member states • However, with the low level of development of most of the membership, the efficacy of ROO is questionable. • The ROO are administered essentially by the certificate of origin. The system favours large and established firms, whereas in the less developed countries a sizeable amt of trade is by small scale cross-border traders. ACTIVITIES TO FACILITATE TRADE • In the transport area, COMESA has a system of harmonised transit charges for heavy vehicles and buses • The Yellow Card system whereby if a vehicle owner buys the insurance, it is valid in all the other countries participating in the scheme facilitates regional travel • the COMESA carrier’s licence works a lot for the efficient utilisation of commercial vehicles. The licence allows commercial vehicles to be licensed with one licence which is valid throughout the region. ACTIVITIES TO FACILITATE TRADE CONTD.. • The Regional Customs Bond Guarantee scheme is yet to come into effect, is meant to achieve regional recognition of a Customs bond. This is expected to release substantial amounts of money tied up in these bonds. • The sub-Saharan African region is perceived as a high risk area. Hence to deal with this perception, COMESA came up with the idea of an African Insurance Agency which covers political risk. • COMESA has a host of other cooperation activities in the areas of infrastructure development, private sector development, investment, gender, and agriculture. ACTIVITIES TO FACILITATE TRADE CONTD… • COMESA is working on a concept of one stop border post for contiguous countries so as to facilitate clearance of traffic at the borders. Intra-COMESA Trade Intra-COMESA trade % of Total COMESA trade Percentage 9.00% 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 1997 1998 1999 2000 2001 Year 2002 2003 2004 2005 • Intra-COMESA trade increased somewhat after the region attained FTA status. • The level, though stil remains low. • Currently carrying out Trade Flow Analysis to find out reasons why intra-trade is low. COMESA and Multilateral Trade Agreements • COMESA is notified with the WTO. • Most of COMESA’s members are also members of the WTO, 13 out of the 19 are members of the WTO and 4 others are seeking to accede to the body • COMESA assists its members to prepare positions in negotiations in the WTO. For example, COMESA secured funds and supervised studies on national assessments of the situation in the services sectors of the member states. The results from this will be used to determine which service sectors to negotiate under the GATS. COMESA and the Economic Partnership Agreements • 16 of COMESA’s members came together to form the Eastern and Southern Africa (ESA) group for purposes of negotiating with the EU on trade relations post 2007. • The ESA has with one voice emphasised the development aspect in their relations with the EU. COMESA and the AGOA process • More than half of COMESA’s members have been declared eligible for AGOA by the US government. • COMESA interfaces with US authorities to have the extension of AGOA benefits and to mention some the AGOA aspects that tend to limit the countries from enjoying the benefits to the attention of the US authorities. KEY LESSONS • Some policies and trade facilitation focused on large firms when in some countries focus should be on small scale firms and cross-border traders. • United voice to speak to other trading partners, EU, WTO and AGOA • Some of trade facilitation programmes developed without pvt sector involvement, now pvt sector more involved • Rules of origin tend to constrain rather than promoting trade. • Large group of countries with multiple membership – no problem but sometimes tends to dilute commitment to the integration process.