New African free trade deal opens opportunities
Publish date: 17 July 2017
Issue Number: 734
Diary: IBA Legalbrief Africa
A total of 26 African countries are rapidly moving towards finalising a preferential trade agreement that will open up significant opportunities for South African exports. A Business Day report says the countries included in the tripartite free trade area – seen as a critical driver of regional integration on the continent – have a combined population of 625m and a total GDP of $1.6trn. Once the tariff negotiations are finalised, the deal will offer exporters preferential or zero tariffs into the markets of member countries. The Department of Trade and Industry’s Xolelwa Mlumbi-Peter said this preferential access would provide better terms of trade than enjoyed at present. ‘It means that we will be able to increase our exports and advance a developmental integration agenda and the development of regional value chains as it would be cheaper, for example, for SA to import inputs from African countries.’ Trade Law Chambers director Rian Geldenhuys said the progress made with the tripartite free trade area was ‘fantastic’ and would offer huge opportunities for South African businesses if implemented. At this stage, the agreement consists only of the legal framework, with detailed negotiations on tariffs for the different products still to be finalised. Non-tariff barriers and infrastructural blockages will have to be addressed at a later stage. The agreement – which South Africa signed in Uganda last week – is built on the three existing trading blocs: the Common Market for Eastern and Southern Africa (Comesa), the SADC and the East African Community. It also includes non-bloc countries such as Egypt.