24 Sept 2019
AFRICA: Tripartite Free Trade Area Agreement to Launch in 2020
Africa’s Tripartite Free Trade Area (TFTA), an agreement comprised of three regional economic blocs, is expected to be operational by 2020.
Francis Mangeni, Director of Trade and Customs with Common Market for Eastern and Southern Africa (COMESA) said that the TFTA brings together COMESA, the East African Community (EAC) and the Southern African Development Community (SADC) trading blocs. Five countries have ratified the TFTA so far, including Uganda, South Africa, Egypt, Kenya and Rwanda. In the 3 September interview with Xinhua, he said that another 11 countries are expected to ratify before the end of the year, so that the TFTA can be made operational.
The TFTA was originally proposed in 2015 to enable free trade between the member states of COMESA, EAC and SADC. An agreement was signed in Egypt in 2015 by 26 countries. When completed, it will create a single African economic community covering a population of 632 million, with a combined GDP of about US$1.3 trillion, based on figures at the time of signing. The TFTA will gradually reduce tariffs to zero for all goods traded in the bloc by consolidating the tariff structures of the various groups into a single regime.
According to an analysis released by the Harvard Kennedy School's Belfer Center for Science and International Affairs, the TFTA will benefit the African continent by creating a much larger market, with the free flow of goods and services helping to maintain stronger economic growth. It will also serve as an impetus for investment in Africa's cross-border infrastructure, spur industrial development due to the prospect of accessing larger markets, and improve supporting infrastructure. It will also help stimulate trade in services and encourage smaller African countries in the bloc to expand beyond their traditional products.
The TFTA will be a step towards the African Continental Free Trade Area (AfCFTA), which was activated in May 2019. This will create the world’s largest free trade zone by area, encompassing potentially 55 African countries in a single market of 1.2 billion people, with a combined GDP of US$2.5 trillion.