The Tripartite Free Trade Agreement and What it Means for Africa
While many countries in Africa suffer from similar political and economic difficulties, they have been divided into isolated economic communities, with limited trade occurring between them. In fact, only about 10-12 percent of the trade that African countries engage in is with other African countries. In general, most African nations have stuck to exporting raw and crude materials to Europe, China, and the United States, while relying on importing finished products from China. The increasing burden to reconcile the lack of intra-African trade has been addressed at African Union summits in the past but has not gained ground until recently.
African leaders from three regional economic communities, namely the East African Community, the Southern African Development Community, and the Common Market for Eastern and Southern Africa (COMESA), gathered in Sharm El Sheikh, Egypt on June 6, and signed the Tripartite Free Trade Agreement (TFTA). A total of twenty-six countries agreed to this treaty, which will break down trade barriers within the continent in order to create a common market to spur economic investment. According to the agreement, members must agree to “progressively eliminate tariffs and Non-Tariff Barriers to trade in goods,” “liberalise trade in services,” and “cooperate on customs matters and implementation of trade facilitation measures.”
By adopting these measures, TFTA signatories continue a process of African trade liberalization that began over forty years ago. In 1975, Nigeria led the creation of the Economic Community for West African States (ECOWAS), headquartered in its capital, Abuja. This economic body of fifteen states, ranging from Benin to Togo, has established institutions that go beyond the realm of economic integration. Such institutions include the West African Health Organization, the ECOWAS Youth and Sports Development Centre, and the Regional Agency for Agriculture and Food.
One peculiar aspect about the newly-signed trade agreement is that Nigeria is excluded from it, despite anchoring ECOWAS and having the largest population, largest GDP, and fastest growing economy in Africa. Given the diversity of issues that ECOWAS covers, Nigeria and its member states may be too preoccupied with regional issues, such as the ongoing Boko Haram insurgency, to take interest in the Tripartite Free Trade Agreement.
Even without Nigeria’s participation, proponents of African free trade face major challenges. Many predict that the treaty will not fully be ratified until 2017; even then, many countries must undertake serious infrastructural changes to accommodate the increase in trade. This involves building better roads, improving air traffic control, and constructing sustainable ports. There are many who are hesitant to believe that this agreement will be successful due to various internal problems, ranging from civil unrest to political instability in each of the twenty-six participating countries. Despite these challenges, the sheer size of the TFTA gives it the potential to re-make Africa’s economy. This trade agreement will create a trading bloc from Cairo to Cape Town, spanning over 58 percent of the continent's GDP, and affecting over 600 million people.
If the Tripartite Free Trade Agreement is ratified by each of the twenty-six countries’ parliaments and respective governing bodies, it will affect more people than both NAFTA and the European Union. If all involved parties dedicate themselves to the cause, then the Tripartite Free Trade Agreement could potentially be an important step to making African economies more integrated with each other and more competitive in the global community.
The image featured in this article depicts the 17th Ordinary African Union Summit in Malabo, Equatorial Guinea. The original image can be found on the Embassy of Equatorial Guinea's flickr page.