Consultative Workshop on the Tripartite Free Trade Area Seychelles 28 th March 2011.

Consultative Workshop on the Tripartite Free Trade Area

Seychelles

28th March 2011

Seychelles Consultative Workshop - Tripartite FTA

09:00 – 09:10 Opening and Welcome

09:10 – 10:30 Rationale, Scope, Coverage and

Timetable of the Tripartite FTA – Presentation & Discussion

10:30 – 10:45 Tea/Coffee

10:45 – 12:00 Tariff Liberalisation and FTA Negotiating

Modalities - Presentation and Discussion

12:00 – 13:15 Lunch

13:15 – 14:45 Rules of Origin for the Tripartite FTA -

Presentation and Discussion

14:45 – 15:00 Tea/Coffee

15:00 – 16:30 Other Areas of Co-operation -

Presentation and Discussion

16:30 – 17:00 Wrap-up and Closure

Session I

Rationale, Scope, Coverage and Timetable of the Tripartite FTA – Presentation and

Discussion

Continental and REC Overview:

-Lagos Plan of Action (1980) foresees the creation of the African Economic Community (AEC) through the merging of the RECs. Problem has been the lack of direction from the centre so RECs made their own integration programmes.

-Proliferation of RECs with overlapping membership and now mandates leading to conflicting programmes:

- COMESA: 19 countries (4 EAC and 8 SADC)- EAC: 5 countries (4 COMESA and 1 SADC)- SADC: 15 countries (8 COMESA and 1 EAC)

-EAC launched a common market in Jan 2010. COMESA launched a customs union in June 2009. SADC to finalise FTA in 2012 and has established a CU task force, and 5 SADC members are already in the SACU CU.

The Trade Challenge for Africa

African trade is less that 2.5% of world trade. Non-oil exports about 1% since 1992 - half of 1980 value. Intra-African trade about 10%, (40% in North America; 60% in Western Europe).

Africa has the highest export product concentration and a high export market concentration reflecting continued reliance on primary commodity exports mainly to the EU, US, and China.

Seven African countries are in the bottom ten most restrictive trade regimes, and Africa has the lowest rating of any region for logistics performance. Markets are fragmented and borders are difficult to cross, preventing the emergence of regionally integrated industries and supply chains.

Tripartite GDP is US$624b and 527m people. Intra-Tripartite exports increased from US$7b in 2000 to US$27b in 2008 -Imports from US$9b to US$32b and high investment returns.

Establishment of the Tripartite:

The three Regional Economic Organisation Secretariats of COMESA, EAC and SADC (member driven - cannot dictate to Member/Partner States what the RECs’ regional integration agendas should cover or the membership of any REC) agreed to establish the Tripartite Task Force (TTF) in 2006.

The TTF is a coordination mechanism to ensure RECs do not put Member/Partner States into contradictory or compromised positions as a result of implementing integration programmes.

The TTF operates as one in all continental and international fora. It established sub-committees in trade (policy and facilitation) and trade infrastructure along corridors to develop common programmes in these sectors. Also have common programmes in other areas (such as climate change and CAADP) which are common but administered by one REC.

Tripartite Vision:

The Tripartite Vision has been prepared by the RECs and, together with the Strategy, will be circulated to Member States at the beginning of April for comment. The Tripartite Task Force (TTF) has ensured that its draft vision is in line with the African Union vision but at the same time is unique. The value added by the Tripartite, upon which the strategy is based is achieving economic growth through reducing the barriers to trade – reducing tariff barriers and non-tariff barriers. The draft vision of the Tripartite is:

To improve the economic and social welfare of the citizens of the COMESA-EAC-SADC Tripartite region through promoting regional economic growth by creating a conducive environment for regional trade.

Tripartite Strategy:

The draft Strategy to be used to implement the Vision consists of:-Design and implementation of the Tripartite Free Trade Area that involves the preparation of a draft Tripartite Agreement and the negotiation of the implementation modalities of the FTA.-The preparation of a Comprehensive Tripartite Trade and Transport Facilitation Programme and the implementation of this Programme along a corridor (or corridors).-The design and implementation of infrastructure projects along corridors so as to improve the region’s infrastructure.

All of these programmes, implemented in sequence, should reduce the costs of cross-border trade, leading to higher economic growth, job creation and poverty alleviation.

Tripartite Summit (Kampala) - Outcomes:

Summit agreed on need to harmonise trading arrangements amongst the three RECs, free movement of business persons, joint implementation of inter-regional infrastructure programmes as well as institutional arrangements.

The Tripartite Summit resolved that the three RECs should immediately start working towards a merger into a single REC and directed the Tripartite Task Force to develop a roadmap for consideration at its next meeting.

The three RECs were also directed to develop a FTA roadmap, within 6 months (April 2009), for the establishment of the FTA which would take into account the principle of variable geometry and the legal and institutional framework to underpin the FTA. The roadmap would also outline measures to facilitate the movement of business persons across the RECs.

Tripartite FTA Negotiating Principles:

-Tariff elimination would be across all products, covering all sectors (all tariff lines in the HS) provided they meet the Tripartite Rules of Origin. There should be no a priori exclusions or exceptions. The objective of the Tripartite FTA is to achieve DFQF treatment on all products. To this end, offers by Tripartite Member States should provide that, upon entry into force of the TFTA Agreement, the highest level of tariff liberalisation (i.e. duty free, quota free attained in the respective FTAs or other trading arrangements existing in the RECs) should be automatically granted to other Tripartite Member States.

-The Tripartite FTA should not provide for quantitative restrictions on imports and exports of goods that meet the Tripartite Rules of Origin.

Tripartite FTA Negotiating Principles (2):

-At the start of the negotiations, Tripartite MSs should make available their national tariff schedules containing applied MFN and preferential customs duty rates for all tariff lines. This shall be the base from which each country will make or extend its commitments on DFQF market access to other Tripartite Member States. Countries which have unilaterally eliminated or reduced customs duties on some tariff lines on an MFN basis (not on the basis of a binding or a contractual agreement) shall adopt these duties as the base duties from which the DFQF market access will be applied. Tripartite countries shall undertake not to raise customs duties on imports from other Tripartite countries before, during or after the negotiations, and to continuously reduce non-zero customs duties so that they are completely eliminated as part of the Tripartite FTA.


-Tripartite countries shall accord each other Most Favoured Nation (MFN) treatment. Any advantage, favour, privilege or immunity granted by any Tripartite Member State to any product originating in or destined for any other country in the world, shall be automatically extended to the like product originating in or destined for all other Tripartite Member States on a reciprocal basis. Tripartite FTA arrangements shall not prevent two or more Tripartite countries from maintaining or concluding a new preferential trading agreement provided such agreement does not go against the letter or spirit of the Tripartite FTA Agreement and that any tariff preference granted under such agreement shall be extended to other Tripartite countries on a reciprocal and non-discriminatory basis.


-Tripartite Member States shall apply National Treatment and shall not directly or indirectly, subject products imported from another Member State to internal taxes or other internal charges of any kind in excess of those applied, directly or indirectly, to like domestic products.

-The Tripartite FTA Agreement including tariff liberalisation schedules and Rules of Origin should be published in gazettes and websites of the Governments, Customs Authorities, RECs and Tripartite to ensure a high degree of transparency and accessibility of the information by the private sector and the general public. All modifications to instruments relating to this Agreement, national or otherwise, shall be notified in accordance with the provisions of this Agreement to the Tripartite Sectoral Ministerial Committee responsible for trade and published extensively.

Tripartite Bodies and Committees:

Heads of State and Government decided to establish the following Tripartite bodies/committees:-Summit – to meet at least once every two years;-Council of Ministers – to meet at least once every two years;-Sectoral Ministerial Committee on Trade, Finance, Customs, Economic Matters & Home/Internal Affairs – to meet at least once a year;-Sectoral Ministerial Committee on Infrastructure – to meet at least once a year;-Sectoral Ministerial Committee on Legal Affairs – to meet at least once a year;-Committee of Senior Officials and of Experts – to meet at least once a year; and-Task Force of the Secretariats of the three RECs that will meet at least twice a year.

Tripartite Trade Negotiating Forum (TTNF):

A negotiating body, the Tripartite Trade Negotiation Forum (TTNF), comprising national Chief Negotiators (and their teams), responsible for technical negotiations, will be set up.

Meetings of the Tripartite Trade Negotiation Forum (negotiating sessions) shall be chaired by a neutral and professional person experienced in regional and international trade negotiations.

Meetings shall be held in Johannesburg or Nairobi and all Chief Negotiators will be sponsored to official meetings of the TTNF.

Secretariat and technical back-up to the TTNF will be provided by the TFTA Coordinators in COMESA, EAC and SADC.

All TTNF negotiating sessions shall be closed but observers/ technical partners may be invited - a quorum shall be two-thirds of negotiating Members (i.e. have signed the Declaration).

Negotiating the TFTA:

-Negotiations for the TFTA will be open to all Tripartite MSs – considered equal, with the same rights and obligations.-All countries wishing to participate in the negotiations shall sign a Declaration Launching Negotiations for the Tripartite FTA, to signal their commitment to negotiate, prior to the commencement or during the course of the negotiations. Those countries that do not sign the Declaration shall participate in negotiations only as observers.-Negotiations will be in two consecutive phases. The first phase will negotiate the core TFTA which entails agreeing on tariff liberalisation; rules of origin; customs cooperation: NTBs; dispute settlement; and trade remedies.-This will be followed by negotiations of a built-in agenda covering the rest of the Annexes.-MSs that come to the TFTA later will need to accede.

Declaration Launching the Negotiations:

The Declaration should be signed by each Head of State or Government that wants to negotiate the TFTA. It covers:-A phased negotiation – first the TFTA then the TFTA+;-Timelines and milestone for key activities (the roadmap);-Agreement to proceed in accordance with the agreed modalities governing the negotiations;-Agreement to use the draft negotiating text as the basis for the negotiations of the TFTA;-Agreement to establish the TTNF;-Agreement to have an independent chair for the TTNF;-Agreement to appoint national Chief Negotiators;-Agreement to have REC FTA Coordinators; and-An agreement to have observers.

The signing of the Declaration will launch the negotiations.

Thematic Area

Activity Output Responsibility Time

Policy Organs

Meetings to Prepare for

Launch

Preparation of Ministerial, Council & Summit meetings

Ministerial, Council & Summit documents finalised

Tripartite Task Force and Troikas

March – April 2011

Meetings of the Tripartite Senior Officials, Sector Ministers, Council of Ministers and Summit

- Adopt Rules of Procedure, Road Map, FTA Agreement negotiating text and Official launch of the FTA negotiations and Declaration signed

- Chief Negotiators designated by Member States

- Tripartite FTA Coordinators appointed in RECs – to service negotiations

- Comprehensive publicity campaign initiated

Member States with assistance of Tripartite Task Force

May-June 2011

Post-Launch Pre-

Negotiations Preparations

Pre-negotiation preparations

Finalise negotiating modalities Monitoring and evaluation mechanism

established National negotiating positions prepared for

core FTA items Applied national tariffs and trade data

notified

Member States with assistance of Tripartite Task Force

July- August 2011

TFTA Roadmap to January 2016

Thematic Area Activity Output Responsibility Time

Negotiations

Completion of negotiations for core FTA

Monitoring and evaluation mechanism implemented and 6 monthly reports

Agreement on core FTA concluded

Member States -TTF assistance

Sept 2011 – Dec 2012

Commencement of negotiations of Built-in Agenda

Negotiations of Built-in Agenda commenced


Jan 2013

Finalisation of FTA Agreement and Entry into

Force

Tripartite Summit Core FTA approved by Summit and signed by Member States

Member States March 2013

Post negotiation processes

Ratification completed Publicity campaign sustained


April 2013 - Jan 2014

Commencement of Tripartite core FTA implementation

Tripartite core FTA implemented Individual Built-in Agenda

items/Annexes implemented as their negotiations are completed

Secretariats/Task Force & Member States

Jan 2014

Post Entry into Force

Accession by remaining Tripartite MSs

Accession instruments submitted and accepted


After entry into force of Agreement

Completion of negotiations of Built-in Agenda

All Built-in Agenda items concluded and implemented


Dec 2016

Performance Monitoring

Monitoring and Evaluation

Monitoring and evaluation reports considered

Tripartite Council On-going

TFTA Roadmap to January 2016 - continued

Session II

Tariff Liberalisation and FTA Negotiating Modalities - Presentation and Discussion

Tariff Liberalisation (Annex 1):

It is envisioned that all members of one REC FTA or customs union shall extend to members of other REC FTA or customs union members the highest attained level of tariff liberalisation achieved in each REC at entry into force of the Tripartite FTA Agreement.

This means that all COMESA FTA members shall extend DFQFMA for those products that conform to the Tripartite Rules of Origin to all members of the SADC FTA and the EAC customs union.

This approach implies that there will be no need for substantive tariff liberalisation negotiations for all countries irrespective of level liberalisation achieved under regional trading arrangements.

Extent of Tariff Liberalisation by Tripartite Members

Schedule 1: Countries Implementing Regional FTAs or Customs Unions

Botswana Libya SeychellesBurundi Madagascar South AfricaComoros Malawi Sudan

Djibouti Mauritius Swaziland

Egypt Mozambique Tanzania

Kenya Namibia Uganda

Lesotho Rwanda Zambia

Zimbabwe

Schedule 2: Countries Partially Implementing Regional PTAsEritrea Ethiopia

Schedule 3: Countries Not Yet Implementing Any Regional Trading Arrangement

Angola DR Congo

Seychelles Trade Statistics 2000-2009

Source: COMSTAT Database

Seychelles Top Trading Partners 2005-9


Seychelles Top COMESA Trading Partners 2005-9


Seychelles Top COMESA Export Products 2009


Seychelles Top COMESA Import Products 2009


Trade Summary for Seychelles:

-Trade deficit with RoW (-US$513.1m in 2009 and slightly down from 2008) and with COMESA (US$44m in 2009 and slightly down from US$46.1m in 2008).-Main export commodity by far is fish and fish products in a number of different SITC and HS lines.-Main imports in 2009 include petroleum, crown corks, steel, wood and rice (note fish imports as a statistical anomaly).-The European Union and the GCC countries are the main trading partners of Seychelles.-Exports to COMESA are mainly fish and re-exports.-Main imports from COMESA are packing materials, flour, wood, petroleum, machine parts and steel.-Mauritius and Libya were Seychelles’ two biggest COMESA export destinations in 2009 and Mauritius and Kenya were the two main COMESA import sources.

Seychelles and the COMESA FTA:

Seychelles joined the COMESA FTA with the signing of SI 50: Trades Tax (COMESA) Regulations which came into force on 11th May 2009. This SI has a number of listed sensitive products where duty provisions are not extended because of their revenue sensitivity or for socio-economic reasons or special arrangements products:

Revenue Sensitive Products-22.03 – beer made from malt-21.06 – food preparations-22.04 to 22.08 – wine etc.-24.01 to 24.03 – tobacco etc.-27.01 – petroleum-84.07 – engines-87.02 to 87.04 – motor vehicles-87.06 to 87.07 – motor vehicles-87.11 – motor cycles

Socio-Economic Products-03.04 - 03.05 - fish and fish products-09.02 – tea-16.04 – prepared fish-20.09 – fruit juices-22.01 – 22.02 – bottled water-39.26 – plastics-44.20 – wood products-83.06 – plated ornaments

Special Arrangement Products-02.03 – meat (zero tax)-02.07 – meat (zero tax-06.03 – cut flowers-07.02 – tomatoes (zero tax)-07.04 – cabbages etc (zero tax)-07.07 – cucumbers (zero tax)-07.09 – other vegs-08.07 – melons

SI 23 of 2nd March 2010 added the following:-08.03 – banana (zero tax)- 21.03 – tomato ketchup and chilli sauce

Potential impact of the TFTA on Seychelles:(Very preliminary analysis using TRIST default elasticities and 2007 data)

Implication is that, using 2007 data and assuming no exclusions of sensitive products, the TFTA will result in a 10% decline in trade tax revenues for Seychelles. Quantitatively this does not differ significantly with an FTA with South Africa alone (with a trade tax reduction of 9.3%). This clearly implies that the South Africa effect is significant in the determination of the impact of the TFTA.

It is recommended that the 2010 dataset is used to simulate the effects of the Tripartite FTA as:-additional trade taxes were introduced in 2009 and 2010 which are not captured in the 2007 data set;-Other effects would also need to be examined; and-The potential new markets for goods from Seychelles into the TFTA need to be captured.

ISIC SectorChange in protection

160 - Manufacture of tobacco products -43%155 - Manufacture of beverages -8%173 - Manufacture of knitted and crocheted

fabrics/articles -2%341 - Manufacture of motor vehicles -2%359 - Manufacture of transport equipment n.e.c. -2%154 - Manufacture of other food products -1%181 - Manufacture of wearing apparel, except fur

apparel -1%172 - Manufacture of other textiles -1%152 - Manufacture of dairy products -1%011 - Growing of crops; market gardening; horticulture -1%251 - Manufacture of rubber products -1%

Potential impact of the TFTA on Seychelles by Sector using 2007 data, assuming no existing exclusions or exemptions

Trade Remedies (Annex 2):

If it is proved that domestic or regional industries producing like, or directly competitive products, have suffered injury, or are threatened with injury, or establishment of a domestic industry has been curtailed the following actions may be taken:-safeguard action in the form of higher than otherwise applicable customs duties, or imposition of quotas;-anti-dumping duties not exceeding the margin of dumping;-countervailing duties to offset the subsidies; -price undertakings to appropriately raise the price of imported products;-orders to appropriate enterprises to ensure and maintain conditions for fair competition and for sustainable human development; or-any other measures in the public interest, consistent with the appropriate protection of a domestic or regional industry.

Customs Cooperation, Simplification, Transit Trade:

Annex 5: objective is to simplify and harmonise Customs laws and procedures by: providing for common measures with which MSs and Customs Territories shall comply in the formulation of their Customs laws and procedures; establishing appropriate institutional arrangements at Tripartite, regional and national levels; and facilitate cooperation to prevent fraud & illegal trade.

Annex 6: objective is to promote co-operation among Tripartite MSs in simplifying and harmonising trade documentation and procedures for purposes of facilitating intra-Tripartite trade.

Annex 7: The general provisions specify that MSs shall undertake to grant all transit traffic freedom to traverse their respective territories by any means of transport suitable for that purpose. This is applicable mainly to mainland countries of the Tripartite.

Non-Tariff Barriers (Annex 3):

Provides for a mechanism for the elimination of NTBs through:-Institutional structures for the elimination of NTBs;-A general classification of NTBs;-Reporting and monitoring tools;-NTB elimination mechanisms and resolution procedures;-Penalty system; and-A dispute settlement mechanism.

Dispute Settlement (Annex 14)

If an amicable solution fails dispute settlement shall be done through the establishment of dispute settlement panels and he selection and operations of the panels are described in the Annex

Session III

Rules of Origin for the Tripartite FTA - Presentation and Discussion

Why have Rules of Origin?

Rules of Origin are important to avoid trade deflection (transiting without adding value) from occurring. To be effective the TFTA must have transparent and simple RoO that promote trade while ensuring that no, or minimal, trade deflection takes place. RoO can be, and are, also used as a protectionist measure by the country offering DFQFMA, especially to protect domestic producers of “sensitive goods”.

Strict Rules of Origin reduce the effectiveness of the preferential or free trade agreement they apply to – they do not promote either industrialisation or foreign direct investment.

The Summit directed that the TFTA should build on the existing regional trade liberalisation schemes and be implemented expeditiously. This means a FTA with more liberal RoO than existing RoO (Note: REC RoO cannot be harmonised).

Determination of Origin.

Wholly Produced: - goods extracted – not usually contentious.

Substantive Transformation: If imported components are used then the good only originates from a country where “substantial transformation” takes place.-Value added in the production process - value of the inputs expressed as a percentage of the finished product value.-Change of Tariff Classification - usually CTH rule. If the HS heading changes in the process of manufacture - such as making bread (HS 1905) from wheat flour (HS1101).-Process application - where a specific process has to be applied to a product for origin to be conferred.-Value of material calculation - more than a certain pre-determined percentage of local materials, or less than a pre-determined percentage of imported materials are used to manufacture a finished product .

Challenges in Determining Origin

How to get the correct balance between avoiding trade deflection and promoting regional trade. Need to ensure value addition takes place but not be too strict. Double transformation rules (e.g. from yarn to fabric and from fabric to finished garment in the same country) are usually regarded as too strict. On the other hand, simple assembly is not usually considered to be substantial transformation but definitions of what constitutes simple assembly differ. For example, gluing a chair together from parts made in another country would be simple assembly and should not confer origin. Importing fresh fish and drying the fish should no confer origin. But assembling a mobile phone or computer or motor vehicle from component parts should constitute substantial transformation and origin should be conferred to the country where that manufacture from component parts occurs.

Substantial Transformation Challenges:

The HS system is not designed to be used as a RoO conferring criteria but has become a valuable tool for determining origin. None of the ways of calculating substantive transformation are perfect or ideal:

Value Added: Value added calculations are complex and prone to challenge since they require the addition of several elements that take place during the manufacturing process and the exclusion of others, resulting in challenges being difficult to settle. In addition, exogenous variables, such as exchange rate fluctuations, can change the value addition calculation and so change the origin of a product without there being any change in inputs or the manufacturing process. The general rule used by COMESA is a valued added rule of 35% (with exceptions). There are a number of unresolved (and unresolvable?) value addition disputes – e.g. cooking oil, air conditioners, mini vans.

Substantial Transformation Challenges (2):

Change of Tariff Heading: Relatively easy to determine and is predictable but also significant disadvantages. In some tariff lines a change of tariff heading may not signify substantive transformation - transforming milk (0401) into yoghurt (0403). Also can be substantive transformation with no change of tariff heading - making an engine (8412) from components (8412).

Process Application: The main constraints to using process application rules (where conferring origin is from a specified manufacturing process) are that, by definition, they are product specific and they tend to be restrictive and difficult to negotiate. If the main rule were to be a product specific rule this would mean that each tariff line would need to be negotiated and, as there are between 5000-8000 tariff lines, depending on the country, this would be a negotiation that would take many years to complete.

Substantial Transformation Challenges (3):

Value of Materials: The value of materials calculation is easy to compute as it only takes account of the value of materials used in the manufacturing of a product and can take into account the costs of local (or regional) transport costs.

The Value of Materials rule is being proposed as the general rule for the Tripartite FTA (not more than 70% of ex-works price for non-originating materials and not less than 30% of ex-works price for originating materials). But a single method for origin determination based on a percentage criterion may not be suitable for certain sectors and other specific rules will need to be negotiated. In all instances simple criteria which are easily understood by operators and easily controlled by administrations should apply and the number of exceptions to the general rule should be as few as possible

Sufficient Working: Annex 4 of the TFTA Draft Agreement specifies that products which are not wholly obtained are considered to be sufficiently worked or processed in the Tripartite Member States when:-the value of non-originating materials used in the production of the good does not exceed 70% of the ex-works price; or-the value of the originating materials used in the production of the good is at least equal to 30% of the ex-works price.

CumulationProducts originating in any Tripartite MS and used in further manufacture in another Tripartite MS shall be treated as if they originated in the Tripartite MS where final processing or manufacture takes place. Working or processing carried out in any of the Tripartite MSs shall be considered as having been carried out in the Tripartite MSs when the materials undergo further working or processing in a Tripartite MS.

Origin Calculations using the COMESA formula (adjusted to take account of regional transport costs): Value of originating materials (VOM)Value of materials from a TFTA member (VOM)Value of non-originating materials (VNM) Value of regional transport - cif (VOM)Rent and rates Depreciation of machineryDirect Labour Ex-Works Price (EWP)

= 400= 100= 900 = 200= 100= 80= 300= 2080

VA = (EWP–VNM)/EWP = ((2080-900)/2080)x100 = 57%

Import Material Content = ((VNM)/(VNM+VOM))x100= ((900)/(900+400+100+200)) = 56%

Local Material Content = ((VOM/(VNM+VOM))x100= ((400+100+200)/(900+400+100+200))x100 = 44%

Material Content Calculations using Annex 4 criteria:

Value of originating materials (VOM)Value of materials from a TFTA member (VOM)Value of non-originating materials (VNM) Value of regional transport – cif (VOM)Rent and rates Depreciation of machineryDirect Labour Ex-Works Price (EWP)

= 400= 100= 900 = 200= 100= 80= 300= 2080

Import Material Content = (VNM/EWP)x100= (900/2080)x100 = 43% (originating as ≤70%)

Local Material Content = (VOM/EWP)x100= ((400+100+200)/2080)x100 = 34% (originating as ≥30%)

Session IV

Other Areas of Co-operation - Presentation and Discussion

Negotiating the Built-in Agenda:

Negotiation of the remaining components (built-in agenda) will take place in tandem with implementation of the main FTA. The built-in agenda will cover the following areas:

-TBTs and SPS;-Trade in services;-Competition policy and consumer protection;-Intellectual property rights; -Movement of business persons; and-Trade development and competitiveness.

Note that there has not been an Annex developed on Trade in Services as yet.

Competition Policy and Consumer Protection (8):

The Tripartite MSs recognise the importance of fair competition in promoting trade and investment, supporting industrialisation and promoting consumer welfare. The proposal is for MSs to, in their trade relations, work together in tackling anti-competitive practices, regulating mergers and acquisitions, and protect consumers from unfair trade practices.

Annex 8 deals with:-Prohibition of anti-competitive business behaviour;-Determination and abuse of a dominant position;-Prohibited practices;-Mergers and acquisitions;-Consumer Protection; and-Cooperation and exchange of information and a forum.

Standardisation, Metrology, Conformity AssessmentAnd Accreditation (Annex 9):The Annex addresses cooperation in standardisation, metrology, conformity assessment and accreditation s well as addressing co-operation in movement of goods, environmental standards and training.

Sanitary and Phytosanitary Measures (Annex 10):The objectives are to:-facilitate harmonisation of SPS measures in the Tripartite region;-strengthen Tripartite Member States’ SPS capacities to protect human, animal and plant life and health;-promote production and trade in food and agricultural commodities to achieve regional food security; and-strengthen collaboration, cooperation and capacity building on SPS matters in the tripartite region.

Intellectual Property Rights (Annex 11):

The Annex on IPRs, in essence, is designed to:-Encourage MSs to develop IPRs as a development tool;-Take part in trade negotiations that consider IPRs;-adopt effective policy and legal frameworks to promote and protect cultural and creative industries and derive the maximum benefits from these industries;-promote the use of traditional knowledge (TK), genetic resources (GR) and folklore including the recognition of the rights of TK, GR and Folklore holders and actively ensure they are duly rewarded;-take policy and legislative measures to promote and protect copyright and related works; and-encourage companies within the region to undertake an audit and evaluation of their IPRs, and promote the use of IPR as one of the key tools for raising finance.

Free Movement of Business Persons (Annex 12):

-It is proposed that each Tripartite MS shall grant temporary entry to a business visitor without requiring that person to obtain an employment authorisation, or advance entry visa in the country of origin, provided that the business visitor shows proof of residence in a Tripartite country and proof of business.

-Similar provisions should apply to:- Traders ad investors- Intra-company transferees- Professionals

No numerical limits should apply

Trade in Services:

Article 30 of the Draft Agreement makes the following provisions:

-Tripartite Member States undertake to liberalise trade in priority sectors subject to such flexibilities as the Tripartite Council may approve;-A Committee on Trade in Services is established to oversee the Tripartite services liberalisation programme;-Liberalisation of service sectors shall be progressive and shall take place on the basis of negotiations conducted in the Committee on Trade in Services;-The Tripartite Council shall adopt guidelines on each successive round of the services negotiations; and -The schedules of specific commitments resulting from the negotiations shall be annexed to the Agreement.

Session V

Wrap-Up and Closure

Tripartite FTA – Progress and Milestones:

The Summit decided to convene a Tripartite Council of Ministers before October 2009 (missed) to determine the time frame for the establishment of a single FTA for the three RECs.

Draft FTA Agreement and Road Map adopted by the TTF in Dec 2009. Some target dates have been missed. Progress so far is:-Secretariats shared Draft FTA Agreement/Roadmap with MS in December 2009. National consultations underway.-Preparation of draft FTA Agreement and annexes now completed - commenced in July 2010;-Negotiations for the FTA Agreement, based on the draft prepared, should be launched at the second Tripartite Summit due to be hosted by South Africa in June 2011 (?).-The FTA implementation should start by January 2014.

Moving Forward – Planned Meetings by the TTF:

Preparatory meetings for Tripartite Council & Summit (Zambia)6-7 May 2011 - Tripartite Task Force Sub-Committee;8 May 2011 - Tripartite Task Force Meeting;9-11 May 2011 - Tripartite Experts and Senior Officials’;12 May 2011 - SADC Ministerial Council Meeting;13-14 May 2011 - Tripartite Ministerial Preparatory Meeting

.

Second Tripartite Council and Summit (South Africa) 8-9 June 2011 - Tripartite Experts/Senior Officials’ Meeting;10 June, 2011 - Tripartite Council of Ministers’ Meeting;12th June 2011 - Second Tripartite Summit of Heads of State and/or Government.

Discussion Points: How can Seychelles benefitfrom the Tripartite FTA and Tripartite Programmes?

-Export of tuna into Tripartite markets – niche markets.-Other sectors for export of goods.-Trade in Services (eg):

- Back office functions (assumes broad-band internet)- Tourism (targeting high-value, low volume market) - Transit port using advantaged of deep water port – in

2009 Victoria container terminal landed 18,121 TEUs and trans-shipped 1,880 TEUs. Djibouti handles about 1m TEUs of containers a year. Also in 2009 a total of 444,540 MT of fuel was landed in Seychelles and 225,792 MT was re-exported. Tuna trans-shipments in 2009 totalled 157,822 MT, down from 335,686 MT in 2005.


-Take advantage of the Tripartite project preparation and financing instruments:

- The PPIU, to be housed in the COMESA Secretariat, will be responsible for the following:- Harmonise regional master plans – with the plan

being to develop a Tripartite Infrastructure Master Plan;

- Prepare a pipeline of priority projects and a projects database for the Tripartite;

- Prepare project information memoranda;- Prepare tender documents as an when required; and- Carry out project management activities and

implement small projects when required.


-Significant funds are needed to improve transport infra-structure. The Tripartite Trust Account (TTA) has been established to assist with the funding of infrastructure. The TTA is a grant-funded account that is held by DBSA; also the Fund Manager. The TTA leverages other monies - other grants, concessionary loans or commercial loans.-Tripartite is responsible for identification of projects, preparing project identification sheets, preliminary analysis to ensure the project is economically viable and to ensure that the project’s implementation will deepen integration. -Project then presented to Tripartite Investment Committee (IC), or any other potential funder, and, once approved for funding, the appropriate Fund Managers work with other stakeholders to design the funding for the project.

Thank You

Mark PearsonProgramme Director

TradeMark Southern Africa

[email protected]

mailto:[email protected]

http://www.trademarksa.org/

Consultative Workshop on the Tripartite Free Trade Area Seychelles 28 th March 2011.

Documents

Transcript of Consultative Workshop on the Tripartite Free Trade Area Seychelles 28 th March 2011.