Tuesday, October 19, 2021

Botswana is now party to the COMESA-EAC-SADC Tripartite Free Trade Area Agreement

This week Tuesday marked an important milestone in the Agenda of the African Union as Botswana signed the Tripartite Free Trade Area Agreement. This happened during a dedicated signing ceremony hosted by Ministry of Investment Trade and Industry (MITI).  The agreement will boost intra African trade as a result of elimination and reduction of tariffs and non tariff barriers as well as market expansion. In 2015 Botswana opted not to sign the agreement as there were outstanding issues on rules of origin, tariffs and trade remedies which are critical to the Free Trade Area (FTA). The decision to sign was taken as a result of the conclusion of the outstanding annexes on trade remedies and rules of origin by tripartite trade Ministers at their meeting of July 2017. Following the positive outcomes of the Ministerial meeting Botswana made the all important decision to sign the agreement.  Botswana therefore just increased the number of states that have signed to 22.

The Tripartite Free Trade Agreement consists of the three regional blocs being Southern African Development Community (SADC), Common Market for Eastern and Southern Africa (COMESA) and East African Community (EAC). It is a collective of 26 states in all. The trade negotiations under the agreement were broken into phases. Phase one negotiations cover core FTA issues of tariff liberalization, rules of origin, customs procedure and simplification of customs documentation, transit procedures, non tariff barriers, trade remedies and other technical barriers to trade and dispute settlement. Phase two will cover trade in services, trade related issues like intellectual property and competition policy. An agreement on movement of business persons is also being negotiated parallel to phase one negotiations.

While officiating at the ceremony, Minister of Investment Trade and Industry Vincent Seretse said the agreement resonates well with Botswana National Development Plan 11 aspirations of becoming an export led economy.  “Local products which have been identified under this agreement as having export potential include veterinary vaccines, pharmaceutical products, electrical and machinery products, plastic products, salt and salt products, carpets and other textile floor coverings,” he said.

For her part Permanent Secretary at MITI Peggy Serame said what is important going forward is to ensure that all these markets have adequate goods and services directed at them. “Now that the agreement has been signed, Botswana has her work cut out for her in ensuring that she has enough competitive goods and services to export to the large markets that have just opened up to her in the said FTA,” she advised.

In 2016 Botswana exported goods to the tune of P997 million to its major trading partners in the Tripartite Region excluding Southern African Customs Union states, while she imported P1.9 billion worth of goods. These were to trade partner countries such as Kenya, Rwanda, Uganda, Zimbabwe and Zambia. This signifies an aggregated negative trade deficit of P945 million. It is believed that entry into the said agreement will enable the country’s local products to enjoy preferential treatment hence increase export volumes.

RELATED STORIES

Read this week's paper