COMESA - Trade and Market Integration

Trade and market integration has had a central role in the evolvement of COMESA given its background as a Preferential Trade Area (PTA) for Eastern and Southern Africa. The previous foundation has therefore supported the establishment of institutions that foster trade liberalization and trade facilitation programmes. In addition, article 4 of the Treaty Establishing COMESA[1] reiterates the removal of obstacles to the free movement of persons, labour and services, along with the right of establishment and residence for investors in the COMESA region.

At present, COMESA operates a free trade area (FTA) among fifteen of its member States, Burundi, the Comoros, Djibouti, Egypt, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, the Sudan, Uganda, Zambia and Zimbabwe. The Democratic Republic of Congo joined the COMESA FTA in December 2015 and is currently finalizing its tariff phase-down. A Customs Union was subsequently launched by COMESA in 2009. From the time of the launching, member States agreed on a three-year transitioning period to domesticate the customs management regulations, common external tariff and the common tariff nomenclature that would gradually form the Customs Union. The plan was to finalize the Customs Union by 2012, however, even after a second postponement of the transition period to 2014, the Custom Union is still not operational.

In October 2008 COMESA, East African Community and Southern African Development Community agreed to negotiate a tripartite free trade agreement amongst the regional economic communities. After lengthy negotiations, the tripartite FTA was officially launched in June 2015. Although 17 out of the 26 Member States have signed the Tripartite FTA Agreement, it has not yet entered into force due to outstanding ratifications. Moreover, remaining technical work on tariff liberalization, rules of origin, and trade remedies are likewise delaying the process. However, interim arrangements were agreed to operationalize the Tripartite FTA, which would effectively make it the largest FTA in Africa. It has also been estimated that the Tripartite FTA could boost intra-regional trade by as much as one third.[2] It is therefore important that remaining member States join the FTA avoid undermining the establishment of the Tripartite FTA. 

The Investment Agreement for the COMESA Common Investment Area (CCIA) was adopted in May 2007. It is an instrumental tool that the COMESA Secretariat anticipates will ensure a stable investment environment that promotes and protects cross-border investments. It aims at harmonizing investment policies, regulations and legislation, setting the standards for investor and investment protection and encouragement along with creating an institution to facilitate intraregional economic community trade. For instance, expanding the number of bilateral Avoidance of Double Taxation Agreements, promoting arbitration mechanisms for investment disputes, harmonizing all company registration procedures, and developing capacity-building programmes on investors’ services for the national investment promotion agencies. Moreover, COMESA’s trade facilitation instruments, including the Regional Customs Transit Guarantee scheme and Yellow Card, are effective in the COMESA region and have been adopted by non-COMESA member States including Tanzania and South Sudan. Angola and Mozambique are soon expected to enlist even though they are not COMESA members.