The newly launched Tripartite Free Trade Area (TFTA) is estimated to produce a yearly Gross domestic Product (GDP) growth of US$1.3trillion from all the 26 countries under the treaty.
The TFTA, which has been signed by heads of state from Comesa, EAC and Sadc, creates a single market that will address challenges that arise from the fragmentation of countries within the region. Comesa Secretary General Sindiso Ngwenya said the 26 member states have a combined population of 625 million people and can produce a combined GDP of $1.3 trillion.
Ngwenya said the tripartite trade is dominated by trade in intermediate products and manufactured goods.
“This confirms the available evidence that the TFTA can serve as a basis for industrialisation anchored on value addition. Within the Comesa, EAC and Sadc regions we are witnessing increased cross-border investment in manufacturing, trade in services including logistics and financial services by companies that are emerging as regional champions,” said Ngwenya.
He further said the regional trade and industrial policies through the tripartite are likely to further stimulate and enhance investments. He said domestic companies that have decided to make cross-border investments within the region, support regional integration.
“This is not the case with multinational companies whose strategies within Free Trade Areas result in rationalization and closure of production plants in different countries, as they can only supply the single market from one production facility
“This has the potential of creating a resistance to FTA’s as these strategies result in factory closures with loss of employment, a situation that runs counter to public policy of job creation,” he said.
Outgoing Comesa chairperson Robert Mugabe said the tripartite agreement will rank the bloc number 13 in the world based on the estimated GDP. He said the 26 countries should use the tripartite arrangement to broaden trade activities within the region. Mugabe said the benefits of the TFTA is dependent on regional infrastructure and industrialisation.
“Infrastructure and industrialization should be prioritised, so that we offer competitive goods and services. GDP growth cannot be achievedwithout industrialization and infrastructure development.
“Let’s emphasise on building infrastructure and industrialising as a way of curbing migration by our youths, men and women. The agreement will also reduce the cost of doing businesses, making our goods attractive in other markets,” said Mugabe.
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