Egypt's President Hosni Mubarak opened a summit of a 20-nation African trade bloc, COMESA, with a call for more of its members to join a free trade area.
The Common Market for Eastern and Southern Africa (COMESA), with a combined population of 400 million, is holding its first summit since nine of its members launched a free trade area (FTA) in October. COMESA wants to turn the FTA into a customs union by 2004 and achieve monetary union by 2025.
”I am confident that our success in activating the free trade area will be a good incentive for other member states that are still not part of the FTA to join it quickly,” Mubarak, taking on COMESA's rotating presidency, told the first session. Mubarak said the free trade area was necessary to enable member countries to cope with globalisation.
“Our summit is taking place at a time when we are faced with increasing challenges in light of the growing trend of economic, commercial and cultural globalisation… which carry the risk of economic marginalisation,” he declared.
Mubarak said COMESA should push ahead with moves to set up a customs union and set unified external tariffs by 2004, also the target date for the free movement of skilled labour. He said the trade bloc needed peace in the troubled African continent and said infrastructure needed to be improved and information networks needed to be linked.
While Egypt wants rapid progress to expand the free trade area, trade disputes emerged during summit preparations.
When COMESA trade and economy ministers met on Sunday, Namibia, Zambia, Madagascar and Kenya voiced concern at Egypt's plans to sign a trade pact with the European Union next month, Egyptian diplomats said.
Some countries fear Egypt's association agreement with the EU could give Europe back door access to COMESA markets. Trade within the bloc, which was established in 1994, has climbed 11% a year from $2.5 billion in 1996, according to an Egyptian Foreign Ministry document.
But even existing tariff cuts are making some COMESA members squirm – Kenya, Zambia and Malawi argue that the zero tariff area for tradeable goods and services is harming local industry.
Kenya's sugar industry has complained of dumping by COMESA countries. The bulk of its imports come from COMESA members Sudan, Mozambique, Malawi, Zimbabwe and Zambia.
Kenya, which already charges 18% value-added tax and 7% sugar development levy on all imports, is said to be considering introducing import quotas.
Zambia and Malawi, which are also concerned about rules of origin, want COMESA to let individual countries impose some duties to protect domestic produce.
The Seychelles is to join current FTA members – Djibouti, Egypt, Kenya, Madagascar, Malawi, Mauritius, Sudan, Zambia and Zimbabwe – in July. Burundi and Democratic Republic of Congo will also join this year, Egyptian diplomats said.
The Lusaka-based COMESA has named Rwanda, Uganda and Comoros as possible FTA joiners this year. COMESA's other members are Angola, Eritrea, Ethiopia, Namibia and Swaziland.
Tanzania quit COMESA last year, saying its businesses were too weak to compete in a free trade zone.
The COMESA region has a combined gross domestic product of about $166 billion and three-quarters of its people live below the World Bank poverty threshhold of $1 a day.
This article was first published by Reuters on 22 May 2001.