Bridges Weekly Trade News Digest • Volume 6 • Number 20 • 28th May 2002

Agriculture, Peace, And Expansion Dominate COMESA Heads of State Summit

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Leaders from nine African states of the Common Market for Eastern and Southern Africa (COMESA) gathered in Addis Ababa, Ethiopia, on 23 and 24 May for the seventh Heads of State Summit. The theme of the summit was "promoting trade and investment" in the COMESA’s nine-state Free Trade Area (FTA). Discussion topics included, inter alia, a fund for recovering losses resulting from participation in the trade bloc, food security concerns, peace in the region, as well as the expansion of the FTA.

The FTA was launched in October 2000 with the nine COMESA states of Djibouti, Egypt, Kenya, Madagascar, Malawi, Mauritius, Sudan, Zambia and Zimbabwe participating (see BRIDGES Weekly, 29 May 2001 ). The larger 20- member COMESA community also includes Angola, Burundi, Democratic Republic of Congo, Ethiopia, Eritrea, Namibia, Uganda, Rwanda, the Seychelles, Swaziland and the Union of the Comoros. Although not yet members of the FTA, this latter group enjoy preferential trading arrangements with each other and are gradually reducing tariffs on goods produced inside the bloc. Member states aim to develop the COMESA FTA into a customs union by 2004 and a monetary union by 2025 — encompassing all 20 members.

Resolutions to spur trade and investment

One resolution adopted at the Summit, which aims to increase trade and investment in the bloc, was a protocol to launch a fund from which member states can recoup revenue losses resulting from participating in the free trade area. The fund, with assistance from the New Partnership for African Development (NEPAD), is also expected to help spur private sector investments in infrastructure.

Members also adopted a declaration on ethics to combat corruption by customs officers and called on members to speed up consultations to implement the protocol on free movement of people, labour, and services.

Food security

Cooperation in agriculture and food security was also high on the summit’s agenda. Hoping to boost the agricultural output of the region, leaders discussed mechanisms to promote large-scale irrigation projects, reduce dependence on rain-fed farming, and encourage regional specialisation. "We want a common agricultural policy," said COMESA Secretary General Erastus Mwencha. Contrasting the huge drought-induced food shortfalls in some southern COMESA countries with the surpluses in some eastern countries, Mwencha added, "[we] should develop schemes so that food can flow freely in the region rather than when we have problems only,"

In that context, strengthening transport networks were also identified as a priority — as approximately three-quarters of goods within COMESA travel by road. Peace — an essential piece of the puzzle

The issue of regional stability and security was also prevalent in the minds of the leaders during the conference. Some members are involved in war while others face internal turmoil. The situation will need to greatly improve, according to several experts, if progress is to be made towards the desired goal of bringing all 20 members into a customs union by 2004 and monetary union by 2025.

Fear of domination by neighbours chills expansion

The summit was also attempting to attract more members into the FTA. Despite these efforts, only the five states of Burundi, Rwanda, the Democratic Republic of Congo, Namibia and Swaziland have signed up to join before January 2004. While African leaders acknowledge that intra- regional trade among the nine FTA countries, amounting to $370 million, has improved due to the FTA, they note that some members are reluctant to join because they fear domination by neighbours (see BRIDGES Weekly, 16 January 2002).

Another issue impeding expansion, and growth in general, are complicated rules of origin. Secretary General Mwencha noted the main delay in implementing the FTA is ‘rules of origin’ issues and the use by certain countries of such provisions to block or delay imports. This item is being considered such that the same procedure of administration for these rules can be put into place, he added.

Regarding the issue of a common negotiating position with multilateral partners, COMESA had agreed with other regional bodies like the Southern African Development Community (SADC) to pursue a common approach when negotiating in the WTO, with the European Union and the US, under the Africa Growth and Opportunity Act (AGOA) (whereby qualifying countries can export unlimited quantities of clothing made from US fabric, yarn and thread to the US duty-free, and a limited amount of apparel made from fabric produced in the country in question).

"Interview-Africa Regional Bloc Says Free Trade Deal Vibrant," REUTERS, 21 May 2002; "COMESA Heads of State To Meet In Addis Ababa To Boost Free Trade Zone," AFP, 22 May 2002; "Africa Trade Bloc Meeting Ends With Call For Peace," 24 May 2002; "Summit Ends With Resolutions To Boost Trade" THE HERALD, 24 May 2002.