Three of Africa’s leading regional trade blocs – the East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA) and the Southern African Development Community (SADC) – have simplified the rules of origin to be applied by all member states in a move to boost intra-continental trade.
Simplifying and merging the criteria used by traders in the three blocs was part of the mandate of a task force set up by the respective Heads of State during the first Tripartite Summit held in Kampala, Uganda in October 2008.
EAC Director-General in charge of Customs and Trade, Peter Kiguta, said a draft of the hybrid rules of origin is ready.
“It is much simpler; it is expected to facilitate trade once the three regional economic trading blocs establish a Free Trade Area”, Kiguta told The East African.
Rules of origin refer to the criteria used to distinguish between goods produced within the member states and thus eligible for the trading bloc’s preferential treatment, and those produced outside the region’s customs territory that attract duties.
For instance, the EAC trade regime specifies that goods qualify for EAC tariff treatment if they originate within the partner states. This means that all goods meeting requirements of the EAC Rules of Origin qualify for EAC tariff treatment when they are traded within the region.
Traders in the EAC, COMESA and SADC are currently forced to do business under three different rules of origin, a cumbersome and expensive affair. The three sets of rules of origin are also said to be “complicated”, with many business people calling for them to be simplified.
“The rules of origin belonging to the individual economic blocs will be abolished when the hybrid one comes into force. It is better and simpler”, Kiguta said.
However, the new criteria will not come into force immediately as they will have to wait until the three regional organisations become a Free Trade Area, he said.
The Tripartite Summit agreed, among other things, on a programme of harmonisation of trading arrangements among the three regional economic communities (RECs); free movement of business persons; joint implementation of inter-regional infrastructure programmes; and institutional arrangements on the basis of which the three RECs would foster cooperation.
With regards to trade, customs and economic integration, the Summit approved the “expeditious establishment of a Free Trade Area encompassing the partner states of the three trading blocs, with the ultimate goal of establishing a single Customs Union”
The Tripartite Task Force was also directed by the Summit to develop a road map for the implementation of this merger.
On measures to facilitate the movement of business persons across the trading blocs, the Summit directed that, among other things, the study report on the road map and legal framework be presented to a specially convened Tripartite Council of Ministers for consideration within 12 months (by October this year) in order to determine the timeframe for the establishment of a single FTA encompassing the three regional organisations.
The EAC-SADC-COMESA Summit was a historic event, marking the first time since the birth of the African Union that key building blocks of the African Economic Community met on how to integrate territories and move towards deepening and widening integration within the overall Abuja Treaty for the establishment of the African Economic Community.
The three blocs currently have a combined population of 527 million people and a combined gross domestic product (GDP) of US$625 billion.
