Beyond Political Rhetoric – the Meaning of the Grand Eastern and Southern Africa FTA

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The multiple and overlapping regional integration initiatives in Africa have for many years been used as examples of what it means to lack political will. Despite there being a general consensus that regional integration is an indispensable pillar of Africa’s development, it remains puzzling why the integration initiatives in the continent have not been rationalized. Several explanations have been offered why multiple and overlapping memberships to regional economic communities proliferated in Africa. It has been argued that the integration initiatives in Africa have been driven more by political economic issues, rather than a true desire to foster trade integration. Yet in recent years, some African institutions have elevated their criticism of the spaghetti bowl character of regional integration in the continent. The political leadership of the continent appears now to be listening, given the freeze imposed in 2006 by the Summit of the African Union in recognizing any new regional economic communities. The need for rationalization and harmonization of the integration initiatives has also been accepted in principle, with some African countries now going the extra mile to conduct cost-benefit studies to determine the viability of being in more than one overlapping regional economic communities. One example where progress appears to be starting is the coming together of the East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA), and the Southern Africa Development Community (SADC) and agreeing to work towards a fast-track process to lay the foundation for a grand Eastern and Southern Africa FTA. Besides the harmonization of trade policies, the three regional economic communities have agreed to undertake cross-RECs infrastructure projects to ensure that even as the trade policies are rationalized, trade facilitation efficiency will also be enhanced. This paper looks at what the grand COMESA-EAC-SADC (CES) FTA portends.

The paper uses the recent African GTAP database to uncover what the grand CES FTA could hold for the future of the member countries. Besides aiming to uncover policy lessons that the three RECs could draw from the analysis, the paper takes on board the Economic Partnership Agreements that the three RECs have individually been negotiating with the European Union, as they are likely to have impact on the optimality of the grand CES FTA.