COMESA Free Trade Agreement

The Common Market for Eastern and Southern Africa (COMESA) was established in December 1994 as a replacement to the Preferential Trade Area (PTA) which had been in existence since 1981. COMESA (as defined by its Treaty) was established 'as an organisation of free independent sovereign states which have agreed to co-operate in developing their natural and human resources for the good of all their people'.

The organisation has a wide range of objectives which prioritises economic integration and the promotion of peace and security in the region. COMESA's current strategy can be summed up in the phrase 'economic prosperity through regional integration'. With its 21 member states, population of over 389 million and an annual import bill of around US$32 billion with an export bill of US$82 billion COMESA forms a major market place for both internal and external trading. Its area is impressive on the map of the African Continent covering a geographical area of 12 Million (sq km). Its achievements to date have been significant.

Trade liberalisation, trade facilitation and market integration

The COMESA FTA was achieved on 31st October, 2000 when nine of the member States namely Djibouti, Kenya, Madagascar, Malawi, Mauritius, Sudan, Zambia and Zimbabwe eliminated their tariffs on COMESA originating products, in accordance with the tariff reduction schedule adopted in 1992. This followed a trade liberalisation programme that commenced in 1984 on reduction and eventual elimination of tariff and non-tariff barriers to intra- regional trade.

Mauritius officially joined the COMESA on 3 October 1994 and is fully participating in the Free Trade Area. Imports from COMESA Member States are duty free and quota free. Mauritius imports and exports with the COMESA region has grown significantly over the years and has remained relatively stable.

COMESA offers its members and partners a wide range of benefits which include:

• A wider, harmonised and more competitive market
• Greater industrial productivity and competitiveness
• Increased agricultural production and food security
• A more rational exploitation of natural resources
• More harmonised monetary, banking and financial policies
• More reliable transport and communications infrastructure

The trade related objectives of the COMESA include:

• Trade liberalisation and Customs co-operation, including the introduction of a unified computerised Customs network across the region.
• Improving the administration of transport and communications to ease the movement of goods services and people between the countries.
• Creating an enabling environment and legal framework which will encourage the growth of the private sector, the establishment of a secure investment environment, and the adoption of common sets of standards.
• The harmonisation of macro-economic and monetary policies throughout the region.

COMESA Member States

While most COMESA members have fully liberalised their markets, some members have undertaken partial liberalisation and a few are yet to join the FTA. Below is the list of COMESA Member States.

COMESA INSTITUTIONS

Several institutions have been created to promote sub-regional co-operation and development. These include:

• The COMESA Trade and Development Bank in Nairobi, Kenya
• The COMESA Clearing House in Harare, Zimbabwe
• The COMESA Association of Commercial Banks in Harare, Zimbabwe
• The COMESA Leather Institute in Ethiopia
• The COMESA Re-Insurance Company (ZEP-RE) in Nairobi, Kenya

In addition a Court of Justice was also established under the COMESA Treaty and became formally operational in 1998.

Further initiatives exist to promote cross border initiatives, form a common industrial policy and introduce a monetary harmonisation programme.

Rules of Origin

The 2015 COMESA Protocol on Rules of Origin provides the following:

Goods shall be accepted as originating from a Member State if they are consigned directly from a Member State to a consignee in another Member State and:

• (a) They have been wholly produced as provided for in Rule 3 of this Protocol; or
• (b) They have been produced in the Member States wholly or partially from materials imported rom outside the Member States or of undetermined origin by a process of production, which effects a substantial transformation of those materials such that:
  1. The c.i.f. value of those materials does not exceed 60 percent of the total cost of the materials used in the production of the goods; or
  2. The value added resulting from the process of production accounts for at least 35 percent of the ex-factory cost of the goods; or
  3. The goods are classified or become classifiable under a tariff heading other than the tariff heading under which they were imported (the workings and processing conferring origin under this Rule are in Appendix V);

Additional information regarding the applicable rules of origin for the COMESA can be accessed here :

Protocol on rules of origin

The documents required for approval are as follows:

1. Duly filled COMESA Certificate of Origin
2. Customs Declaration (Import and Export)
3. Export Invoice
4. Appropriate Certified Costing for value added requirements
5. Export Permit (if applicable)
6. Any other documents that may be required by the issuing authority

The Ministry of Commerce and Consumer Protection is the designated issuing authority for COMESA certificates of origins. Exporters may apply for the COMESA certificate of origin by contacting the Ministry of Commerce and Consumer Protection:

Level 2, SICOM Tower,
Wall Street, Ebène Cybercity,
Ebène 72202
Republic of Mauritius
Telephone Numbers: (230) 460-2500
Fax Number: (230) 468-7404 / 468-7395
Email: mcom@govmu.org

Non-Tariff Barriers

Non-Tariff Barriers (NTBs) refer to restrictions that result from prohibitions, conditions, or specific market requirements that make importation or exportation of products difficult and/or costly. NTBs also include unjustified and/or improper application of Non-Tariff Measures (NTMs) such as sanitary and phytosanitary (SPS) measures and other technical barriers to Trade (TBT).

NTBs arise from different measures taken by governments and authorities in the form of government laws, regulations, policies, conditions, restrictions or specific requirements, and private sector business practices, or prohibitions that protect the domestic industries from foreign competition.

The COMESA has established, in collaboration with the SADC and EAC, a trade barriers reporting and resolution mechanism which can be accessed directly by operators on :

Trade Barriers

NTBs may also be reported through the focal points for Mauritius:

National

Director
Trade Policy
International Trade Division
Ministry of Foreign Affairs Regional Integration & International Trade
Level 4, Medine Mews,La Chaussee Street
Port Louis
Tel: +230 260 2911
Fax: +230 212 6368
motas@intnet.mu

Private sector

Mauritius Chamber of Commerce and Industry
6 Adolphe de Plevitz Street
PORT-LOUIS
Tel: +230 203 4830
Fax: +230 208 0076
mcci@mcci.org

Trade in services under COMESA

In 2014, COMESA Members States completed the 1 ^st round of trade in services negotiations which opened the regional market for communications, financial, tourism and transport services. Schedules of Specific Commitments for 11 Member States namely; Burundi, Djibouti, Egypt, Eswatini, Kenya, Malawi, Mauritius, Seychelles, Sudan, Uganda and Zambia were adopted by Council of Ministers and gazetted in 2014.The Gazette can be accessed at the following link: Gazette schedule for 11 member states

The 2^nd round of trade in services negotiations for the new priority sectors is currently being held namely, business services, energy services and construction and related engineering services.

The COMESA Secretariat commissioned studies on the energy and business sectors. Both studies assessed the business and energy sectors with the COMESA. The Study reports can be accessed here: Report on energy related services and Assessment of construction and related engineering services

An Online Platform for Trade in Services is being developed for use by member states. The platform aims to expedite the negotiations, provide tools to improve the technical quality of the offers and increase transparency while also safeguarding confidentiality of information exchanged between the parties.

COMESA Regional Payment Settlement System (REPSS)

The COMESA Clearing House (CCH) has introduced the Regional Payment and Settlement System, (REPSS) which allows member countries to transfer funds more easily within COMESA. REPSS is built on open standards and is also accessible to non-member states and COMESA has the vision to make REPSS the single gateway for central banks within the region to effect payment.

The main aim of REPSS is to stimulate economic growth through an increase in intra-regional trade by enabling importers to pay for goods and services in their local currencies, whilst exporters will be able to invoice for their products in their local currency. Local banks will access the payment system through their central banks. Any participating bank will, therefore, be able to make payments to, and receive payments from, any other participating bank.

Benefits of the REPSS include:

• Payments are made through established and reliable national payment systems.
• Payments originate and are received in the formats of the financial institutions' national payment systems resulting in minimal system modifications.
• There is predictability in payment timing and reduced payment cycle time as compared to other international payment alternatives.
• The cost effectiveness of REPSS payments should translate into savings for the Originator.
• It provides one easy process for making cross-border payments.

Additional information about the REPSS is available here