With the kickoff of the 18th Common Market for Eastern and Southern Africa (COMESA) heads of state summit on Monday, Aswat Masriya provides facts on the organisation's history and Egypt's role in it.
Egyptian Prime Minister Ibrahim Mehleb presented Egypt’s word before 18 other member states in this year's summit, hosted in Ethiopian capital Addis Ababa.
The annual summit this year is titled “inclusive and sustainable industrialisation”, addressing economic, trade and political challenges and developments facing the region.
When was the COMESA founded? When did Egypt join?
An agreement to form a Preferential Trade Area (PTA) between states in east and south and Africa was signed in 1981, going into effect the next year. A PTA is an arrangement in which countries provide one another with customs advantages when it comes to certain goods, achieving the minimum level of economic integration.
According to the COMESA’s website, the PTA had an “ultimate objective” of creating “an economic community” and so, a treaty establishing the COMESA was signed in 1993. The COMESA replaced the PTA and was ratified in 1994.
Egypt joined the COMESA in 1998 and started applying customs exemptions to imports from other signatories in 1999.
In October of 2000, several COMESA members launched a Free Trade Area and followed a trade liberalisation programme which saw tariff reductions and the eventual elimination of custom tariffs.
What are the advantages of belonging to a common market?
A common market allows for the free movement of goods, the creation of a unified customs tariff and the free movement of workers and capital between members states.
Investments within member states are considered local investments, allowing investors to benefit from facilitations, subsidies and tax benefits. COMESA citizens have equal employment opportunities in the public sector of other member states.
They are provided with access to healthcare, education and social services and are also allowed to benefit from the social security system of any member state.
Who are the COMESA’s 19 member states?
The members are: Burundi, Comoros, The Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe.
Are all countries applying the same tariff reductions?
Many members apply reductions worth 100 percent. These are Mauritius, Madagascar, Zimbabwe, Egypt, Malawi, Rwanda, Burundi, Kenya, Djibouti, Zambia, Comoros and Libya. The rest apply partial cuts.
The COMESA agreement aims to gradually lift tariff and non-tariff barriers on goods between members, but only for goods made locally by member states. However, there is a condition, that the minimum value added to the price of goods is 45 percent.
How much does Egypt export to the COMESA?
Egyptian exports to COMESA countries in the last three months of 2014 were worth 3.4 billion Egyptian pounds (around $445.5 million dollars), representing 9.7 percent of Egypt’s total exports in this period.
Almost two thirds of the Egyptian exports ended up in Libya and Sudan.
The Egyptian exports included construction materials, chemical and pharmaceutical products, and food products such as rice, fruits and vegetables. On the other hand, Egypt imported coffee, tea, tobacco, livestock and copper.
What are the obstacles to more cooperation with the COMESA?
There are several challenges to increasing cooperation with the COMESA, according to Egypt’s ministry of industry and trade. The most significant obstacles are transportation difficulties, shortages in funding for joint investment projects and a lack of information on conditions and resources in member states.
There are also differences in procedures and systems followed by members, in addition to a lack of coordination between banks in COMESA countries.
