From: Berhane Habtemariam (Berhane.Habtemariam@gmx.de)
Date: Sun Jun 07 2009 - 05:46:59 EDT
Africa's biggest trade bloc to launch customs union
By Godfrey Marawanyika
07/06/2009
VICTORIA FALLS, Zimbabwe(AFP) (AFP) - Africa's main trading bloc opens a
summit to launch a customs union that will stretch across the continent in a
bid to boost regional trade.
Under the deal, the 19 countries in the Common Market for Eastern and
Southern Africa (COMESA) will impose the same tariffs on goods from outside
the region.
Raw materials and capital goods will travel across borders without tariffs,
while intermediate products will be taxed at 10 percent and finished goods
at 25 percent.
Most countries have also lifted visa restrictions on travel within the bloc,
with members ranging from tourist hotspot Egypt to some of the world's
poorest and most conflict-torn nations, like the Democratic Republic of
Congo.
The COMESA region is home to 400 million people, with a combined gross
domestic product of 360 billion dollars.
Leaders hope the union will simplify trade across the region and provide the
basis for strengthening integration in the future, eventually leading to a
single currency.
"The customs union will therefore enable us to grow beyond the free movement
of goods and establish the foundations of a single market," Zimbabwe's Prime
Minister Morgan Tsvangirai told business leaders ahead of the summit in the
resort town of Victoria Falls.
"It will offer a more predictable economic environment for both investors
and traders across the COMESA region," he said.
The launch of the union had been set for May last year, but was twice
delayed because of Zimbabwe's political turmoil and to allow more time for
the 19 member countries to negotiate the harmonisation of tariffs.
Officials say COMESA has already succeeded in increasing trade within
Africa, which historically has exported most of its raw materials to rich
countries with little commerce within the continent
Kenyan Trade Minister Amos Kimunya said trade within the bloc had increased
fivefold over the past decade, from three billion to 15 billion dollars.
"The COMESA market is now the number one export market for several members
states, ahead of traditional export markets such as the European Union,"
Kimunya said.
But some economists doubt that the customs will change Africa's traditional
trade patterns.
"African states don't trade among themselves," said Bongani Motsa, an
economist at the Pan African Advisory Service financial consultancy.
"If you look at the trading account, African states trade in primary
products which they mostly export to the European Union, and then they
import high value products from other international countries."
The region will also have to overcome a series of conflicts and internal
tensions.
Just 10 years ago, nearly half of COMESA members were embroiled in Congo's
conflict. Sudan remains at civil war, while Madagascar saw its elected
leader toppled after street protests in March.
COMESA comprises Burundi, Comoros, Djibouti, the Democratic Republic of
Congo, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi,
Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and
Zimbabwe.
Copyright C 2009 AFP.
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