This is the question analysts are asking after Heads of State from the Common Market for Eastern and Southern Africa (Comesa), East African Community (EAC), and the Southern African Development Community (SADC), met in the South Africa last week to thrash out issues ahead of the planned integration.

The three African trading blocs, made up of 26 countries, with a market of close to 600 million people and with an estimated gross domestic product of $624 billion, are pushing for a free trade area. But drawing from the outcome of the South African meeting, individual blocs have huge tasks ahead of them as the meeting agreed on a raft of agreements last week.
The three blocs agreed on a three-phase roadmap including a preparatory phase of between six months to one year from June 13, 2011.

Phase one will involve negotiations on the trading of goods which should take place for between 24 to 60 months and the last phase will deal with the actual integration. Officials could not set the time lines for the final phase, signalling that the mega bloc could be years away from becoming reality.

So what must be done?

The first phase requires the three Tripartite Free Trade Area members disclose their trade agreements with countries within and outside the new bloc in the first phase. Different member countries have varying agreements with similar countries and there is urgent need for harmonisation if the 26 countries with a combined gross domestic product of $860 billion were to trade freely.

The EAC however agreed that as much as the greater bloc offered a larger market for its goods, it was a threat for its members to belong to more than one bloc and had to agree to the terms of the two blocs for the achievement of the final bloc.

Kenya’s EAC Permanent Secretary David Nalo said the most successful of the blocs might attract more attention leaving the EAC in peril.

“The world market would prefer the stronger and bigger bloc with an extended market,” explained Mr Nalo.

He however added that the bloc would enhance harmonisation of tariffs among the three member countries. Each of the three blocs has different tariffs for its non-member countries making it hard for fast growing intra trade compared with other blocs.“We do more business with outsiders and we are a core market to many of them.”

EAC intra trade for example accounts for 11 per cent of the region’s total trade compared with Europe’s that accounts for 60 per cent.

SADC exports on the other hand increased from 20 to more than 30 per cent of combined GDP over the past decade, but regional trade accounted for three per cent of the increase.

Phase 2 irons out the stumbling blocks including border-crossings and non-tariff barriers such as import bans and permits that cut into competitiveness by the end of the time frame.

EAC on its part said it was already in progress with the one-stop border point that would see goods cleared at a single point as opposed to passing through the Customs, Revenue authorities, immigration offices and the municipality stop points.

Infrastructural and industrial development will be covered in this phase as well

According to Kenya’s President Mwai Kibaki, infrastructural development is a key component to the process of regional integration if intra trade in Africa was anything to go with.

“In other parts of the world, countries with advanced levels of market integration trade more among themselves; produce more goods and services and have well developed infrastructure,” said the President in a statement.

Despite the first Tripartite Summit directive to the blocs to coordinate and harmonize transport and energy master plans and develop joint financing and implementation mechanisms for infrastructure, the three blocs have done little.

Flow of goods from Mombasa port to the rest of the region remains a challenge.

Experts from outside the continent said the FTA was a great step for the continent’s economic independence but a lot has to be done.

“There are barriers – tariff barriers, non-tariff barriers, longstanding suspicions that have to be overcome in order to take advantage of the economic engine that Sub-Saharan Africa can be,” explained Hillary Clinton US Secretary of State in a statement adding the United States was pursuing a partnership to help build a customs union and a common market within EAC member states.

The final phase is related to trade support and would deal with issues such as intellectual property protection and competition.

source: www.theeastafrican.co.ke