South Africa is the 19th country to sign the agreement for a Tripartite Free Trade Area (TFTA) in Africa.
The area includes 26 countries from three regional economic communities: the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (Comesa), and the East African Community (EAC).
Tinashe Kapuya, a trade specialist in agribusiness at the USAID Southern African Trade and Investment Hub, said the joint worth of the agricultural trade opportunities equals R475 billion (US$ 35.05 billion).
“For South African farmers, this means opportunities for the export of maize (non-GMO), durum wheat, wheat and mixed wheat (meslin), beef, soybean cake, sugar, soybean crude oil and apples.”
Dr Ron Davies, South Africa’s Minister of Trade and Industry who signed the agreement on behalf of the country, said the TFTA is important to speed up regional integration to ensure trading between African countries.
The 26 countries have a combined population of 625 million people and a gross domestic product of US$1.6 billion.
Davies said the agreement will have commercial advantages for businesses, as it will allow them to trade products at lower or no tariff costs between SADC and EAC countries.
Dr Francis Mangeni, Comesa’s Director of Trade and Customs, said in an article on the website tralac South Africa signing the agreement is a breakthrough.
It comes after three outstanding appendices to the agreement, namely the rules of origin, trade remedies and dispute resolution were accepted at a ministerial meeting.
The main agreements were signed two years ago, but some countries wouldn’t sign until all outstanding issues were dealt with.
The agreement must still be ratified by the countries. So far only Egypt has done so, but at least 14 ratifications are needed before the agreement can take effect.
The deadline to complete all outstanding issues – like ratification and tariff negotiations – is 30 October, writes Mangeni.
In a press release, Davies said tariff negotiations between SADC and EAC is almost complete.
Madagascar and Botswana are also expected to sign the TFTA agreement soon.