AAMP Training Materials
description
Transcript of AAMP Training Materials
![Page 1: AAMP Training Materials](https://reader036.fdocuments.net/reader036/viewer/2022062810/56815be3550346895dc9d393/html5/thumbnails/1.jpg)
AAMP Training MaterialsModule 4.1: Regional Trade Agreements
& Cross Border TradeHelen Kenani (COMESA)
![Page 2: AAMP Training Materials](https://reader036.fdocuments.net/reader036/viewer/2022062810/56815be3550346895dc9d393/html5/thumbnails/2.jpg)
Contents
• What is a regional trade agreement?• COMESA vision and mission• Rationale for trade integration• Current trade agreements• Non-tariff barriers to trade in foodstuffs• Legal basis for export/import bans• Opportunities in the East and Southern Africa region• Enforcement mechanisms and procedures• Way forward
![Page 3: AAMP Training Materials](https://reader036.fdocuments.net/reader036/viewer/2022062810/56815be3550346895dc9d393/html5/thumbnails/3.jpg)
What is a regional trade agreement?
• Regional trade agreements aim to reduce or eliminate restrictions on items traded between the member nations
• COMESA aims to be a community of member nations within which goods, services, capital and labor move feely across borders
• The COMESA vision is to boost economic prosperity through integration and co-operation in– trade, customs & monetary affairs– Transport, communications and information– Technology, industry & energy– Agriculture, environment and natural resources– gender
![Page 4: AAMP Training Materials](https://reader036.fdocuments.net/reader036/viewer/2022062810/56815be3550346895dc9d393/html5/thumbnails/4.jpg)
Rationale for trade integration
• Fundamental Questions– Who should integrate and why?– How should integration happen?– Which countries benefit from integration?
![Page 5: AAMP Training Materials](https://reader036.fdocuments.net/reader036/viewer/2022062810/56815be3550346895dc9d393/html5/thumbnails/5.jpg)
Regional trade agreements in ESA
• COMESA, EAC AND SADC set up Free Trade Areas (FTA) established to carry out regional integration
• While they all mandate the establishment of customs unions, the EAC will also pursue the formation of a single political confederation
• Establishing an FTA implies that trade among member countries should be quota and duty free, provided that they meet agreed Rules of Origin and other standards.
![Page 6: AAMP Training Materials](https://reader036.fdocuments.net/reader036/viewer/2022062810/56815be3550346895dc9d393/html5/thumbnails/6.jpg)
Challenges of trading in food in ESA
• Infrastructure– High transport costs lead some countries in FTAs to source
food elsewhere to meet deficits (Kenya/Zambia, 2004, 2008)
• Supply side constraints– Interconnectivity is poor within countries, making transport to
borders costly and difficult– Low production is the norm, but when there is a bumper harvest,
storage capacity is unavailable
• Information– Planting and marketing information is often lacking
![Page 7: AAMP Training Materials](https://reader036.fdocuments.net/reader036/viewer/2022062810/56815be3550346895dc9d393/html5/thumbnails/7.jpg)
Challenges of trading in food in ESA
• Import / export bans– Arbitrary trade bans on food commodities for political, health or
security reasons
• Uncertainty– Unpredictable policy changes cripple private sector traders’
ability to plan, and discourages trade
• High production cost– High input costs and fragmented land use result in inefficient
production leaving ESA farmers uncompetitive
![Page 8: AAMP Training Materials](https://reader036.fdocuments.net/reader036/viewer/2022062810/56815be3550346895dc9d393/html5/thumbnails/8.jpg)
Challenges of trading in food in ESA
• Sanitary and Phytosanitary (SPS) issues– SPS concerns often limit trade in staple food crops during crises
• Standards– Until regional trade agreements harmonize, standards can be
used as an excuse to reject imports of food
![Page 9: AAMP Training Materials](https://reader036.fdocuments.net/reader036/viewer/2022062810/56815be3550346895dc9d393/html5/thumbnails/9.jpg)
COMESA Legal basis for trade bans
• The COMESA Treaty stipulates the circumstances under which a member state may restrict trade in food staples– To protect animal and plant health– Food security: to protect against famine or civil disturbance– To protect items of national importance
![Page 10: AAMP Training Materials](https://reader036.fdocuments.net/reader036/viewer/2022062810/56815be3550346895dc9d393/html5/thumbnails/10.jpg)
Opportunities from FTAs
• Expanded single market– Producers have access to a market of over 500 million people
which should boost production
• Food security– Increased food production and integrated markets should reduce
likelihood of food crises
• Competitiveness– As producers compete with a wider group for the larger market,
competitiveness will be enhanced
• Better Utilization of Resources– The open market will encourage specialization
![Page 11: AAMP Training Materials](https://reader036.fdocuments.net/reader036/viewer/2022062810/56815be3550346895dc9d393/html5/thumbnails/11.jpg)
Opportunities from FTAs
• Agro-based industries– Enhanced production arising from creation of the larger market
should trigger the development of agro-industries
• FDI and intra-investments flows– The expanded market will attract Foreign Direct Investment as
well as intra-regional investment
• Employment creation– Increased investment will in turn create new employment
![Page 12: AAMP Training Materials](https://reader036.fdocuments.net/reader036/viewer/2022062810/56815be3550346895dc9d393/html5/thumbnails/12.jpg)
Opportunities from FTAs
• Reduced imports from non-FTA countries– Regional efficiency improvement leads to increased production– Money not spent on expensive overseas imports can be put
toward health, education and infrastructure
• Economic growth and development– Ag-sector growth will increase farm-incomes which in turn will
reduce poverty
![Page 13: AAMP Training Materials](https://reader036.fdocuments.net/reader036/viewer/2022062810/56815be3550346895dc9d393/html5/thumbnails/13.jpg)
Trade Agreement Enforcement
• Article 49 of the COMESA Treaty stipulates that member states should eliminate all non-tariff barriers (NTB) to trade and refrain from introducing new NTBs to imports originating within the FTA
• Infant Industry: Member States must take reasonable steps over a specified period determined by Council before quantitative or like restrictions can be placed on similar goods from other Member States.
• Article 61 Safeguard Measures: serious injury
![Page 14: AAMP Training Materials](https://reader036.fdocuments.net/reader036/viewer/2022062810/56815be3550346895dc9d393/html5/thumbnails/14.jpg)
Way Forward
• Address supply-side constrains– Enhance production– Improve energy, road, and rail infrastructure– Create air-transport links for high value exports
• Hasten the process of standards harmonization– Agree on SPS measures and customs procedures– Comply with 24 hour operating border post
• Support the decision of the leadership of COMESA , EAC and SADC to merge into a single market for the region to experience prosperity.
• Promote PP Dialogue on issues of trade policy