African leaders on 10 June 2015 signed the Tripartite Free Trade Area (TFTA) pact paving the way for creating Africa’s largest free-trade zone.
The pact was signed by Egyptian President Abdel Fattah al-Sisi, President Robert Mugabe of Zimbabwe, Prime Minister Hailemariam Desalegn of Ethiopia and Mohamed Bilal, Vice-President of Tanzania at the COMESA-EAC-SADC Tripartite Summit 2015 held at the Red Sea resort town of Sharm el-Sheikh in Egypt.
Key Features of Tripartite Free Trade Area (TFTA)
• It is intended to create a common market among 26 nations spanning half the continent from Cairo (Egypt) in the North to Cape Town (South Africa) in the South.
• It will be created by integrating three existing trade blocs viz., the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADCT).
• It will operationalise a framework for preferential tariffs easing the movement of goods across member countries.
• The pact needs ratification in national parliaments by 2017 for implementation.
Importance of TFTA
• The Tripartite FTA popularly known as the Grand Free Trade Area represents around 58 percent of the continent's Gross Domestic Product (GDP) with 1.2 trillion US dollars.
• It is expected to benefit 625 million people living in 26 member countries of the pact.
• The launching of the TFTA is the first phase of implementing a developmental regional integration strategy that places high priority on infrastructure development, industrialization and free movement of business persons.
• It offers significant opportunities for business and investment and will act as a magnet for attracting foreign direct investment into the region.
• The business community, in particular, will benefit from an improved and harmonized trade regime which reduces the cost of doing business as a result of elimination of overlapping trade regimes due to multiple memberships.
• It is expected to stimulate 1trillion US dollars worth of economic activity across the region.
• It will be the largest economic bloc on the continent and the launching pad for the establishment of the Continental Free Trade Are (CFTA) in 2017 covering the entire Africa.
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When: 10 June 2015