Transcript T-FTA Negotiations - Amazon Web Services

Tripartite SADC-EAC-COMESA
Initiative and Free Trade Area
Negotiations
By
Dr Rob Davies,
Minister of Trade and Industry
Republic of South Africa
June 2011
South Africa’s New Growth Path and
Regional Integration
• NGP aims to accelerate growth and industrial
development in to generate employment
• A key element of the strategy is regional integration
• SA consistently runs a trade surplus in Africa
• Structure of exports to Africa is value added products
that support industrial and employment objectives
• Work has focused on integration in SACU and SADC
• Tripartite Initiative between SADC,EAC and COMESA
will extend these integration efforts
2
Africa’s Growth and Development
Prospects
• Africa is the second fastest growing region in the
world, after Asia
• Enormous reserves of raw materials
• 60% of unused arable agricultural land globally
• Young and growing population
• Growing middle class with considerable purchasing
power,
• Rapid urbanisation
• Improvements in economic governance
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Africa’s Growth and Development
Prospects
Over the next five years:
• Africa’s output will expand 50%: From US$1.6 to 2.6
trillion
• Growth will expand on average at 5.5% per annum
• Africa’s GDP per capita income will expand by 30%
• Private consumption in Africa’s 10 largest economies
will more than double
• Africa’s total trade will grow dramatically: from US$
654 billion to US$1.6 trillion by 2015; expanding by
17% per year with share of global trade almost
doubling from 3.2% to 6% in 2015
• Capital inflows expected to reach US$150 billion
4
Tripartite FTA Imperatives
• In context of growing competition for African markets,
T-FTA can ensure that we trade among each other on
equal terms to third parties
• Tripartite framework derives legal basis from Lagos
Plan of Action and the Abuja Treaty establishing the
African Economic Community (AEC)
• Strategic response to the AEC’s objective to
rationalise and consolidate existing regional economic
communities (RECs), to achieve an African common
market
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Tripartite FTA Imperatives
• T-FTA will strengthen economic growth and
development prospects in Africa
• Encompasses 26 countries; combined GDP
approaching US$1 trillion; population of almost 600
million
• Larger market attracts FDI and can boost intra-Africa
trade
• Allow Africa to compete more effectively on global
stage
• Allow Africa to join emerging economies in the South
as new centres of global economic growth, and
sources of trade and investment
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Tripartite Initiative
• In 2008, Heads of State of SADC, EAC, COMESA met
in Kampala to launch Tripartite Initiative
• Directed Secretariats of the 3 RECs to begin work on:
– Negotiations for a FTA among the RECs
– Cross-border infrastructure development, notably
North-South transport corridor
– Free movement of business people
• In 2009, 2nd Tripartite Summit in Lusaka mobilised
finance for the N-S Corridor
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Third Tripartite Summit
• President Zuma hosted 3rd Tripartite Summit in SA on
12 June 2011
• Summit adopted “development integration” approach
combining market integration, industrial development,
and infrastructure development:
– Agreed to initiate a work programme on building
production capacity across member states
– Received an update on current work on regional
infrastructure development (N-S Corridor); and
– Launched SADC-EAC-COMESA T-FTA
negotiations.
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T-FTA Negotiations
Summit adopted proposals on scope, phasing, timeframe and
principles for FTA negotiations:
• Trade in goods negotiations in phase one
• Technical preparations and data exchange of trade and tariffs –
6-12 months
• Overall indicative time frame: 3 years
• Phase two may cover services and trade related issues (eg.
services, competition, intellectual property, investment)
• Principles: build on acquis under 3 RECs; reciprocity;
acknowledge sensitivities; flexibility and variable geometry
• Address non-tariff barriers, regional standards and trade
facilitation (border measures)
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Movement of Business People,
Supply Capacity and Infrastructure
• Negotiations on free movement of business people to
be conducted on separate track lead by departments
of Home Affairs in phase one
• Secretariats to coordinate work on building production
capacity and identifying cross border value chains
• Infrastructure work on separate track with relevant
Departments (eg: transport, energy, communication)
• President Zuma requested by NEPAD/AU to
champion N-S transport Corridor
• Task Team set up under Presidency to lead this work
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