The COMESA-SADC-EAC free trade area: Rules of origin – an impediment to regional trade and economic integration.

Abstract

The Tripartite Free Trade Area is a regional economic integration initiative that brings together 26 African countries belonging to the Common Market of Eastern and Southern Africa (COMESA), the Southern African Development Community, (SADC) and the East African Community (EAC) regional economic communities (REC’s). Among the main objectives of the TFTA is the creation of a large single market with free movement of goods and services and the promotion of intra-regional trade. To this end, the tripartite member states undertake to progressively eliminate all tariffs and non-tariff barriers to trade. Despite concerted efforts to remove barriers to trade among African countries, non-tariff barriers (NTBs) remain an obstacle to regional economic integration and thus reduce investment in the region. Among these NTBs are rules of origin (RoO). RoO constitute an essential element of preferential trade agreements (PTAs) to ensure that only eligible products receive preferential treatment. Overlapping membership to the COMESA, SADC and the EAC has led to the proliferation of RoO regimes among the tripartite member states that are often restrictive, highly protectionist and different in detail and application. Negotiations on RoO in the TFTA have shown that it is difficult to agree on a common RoO standard. Against this background this dissertation discusses the role played by RoO in the multilateral trade system. It examines the RoO applicable in the COMESA, SADC and EAC REC’s and assesses the impact of these RoO on intra-regional trade and economic integration. Furthermore, the dissertation examines the legal framework of the TFTA Annexure on RoO (Annex 4 on RoO) and conducts a comparison of the RoO criteria employed in the TFTA, the Association of Southeast Asian Nations (ASEAN) FTA and the Southern Common Market (Mercusor). The dissertation shows that while COMESA and EAC RoO are similar and relatively simple, SADC RoO are complicated and restrictive. The study further shows that Annex 4 on RoO has been designed in a manner that it is trade facilitating and thus has the potential to increase regional trade and economic integration. The dissertation offers policy makers modest suggestions that can be adopted to address the problems of divergent RoO regimes in the tripartite territory and improve public-private sector participation in the design an appropriate RoO regime.