Africa leaders sign 'Cape to Cairo' free trade bloc deal

Yahoo – AFP, Jay Deshmukh, 10 June 2015

Egypt's President Abdel Fattah al-Sisi was one of the four signatories to the 

Tripartite Free Trade Area (TFTA) during a summit in the Red Sea resort of 

Sharm el-Sheikh, on June 10, 2015 (AFP Photo/Khaled Desouki)

Sharm el Sheikh (Egypt) (AFP) - African leaders signed Wednesday a 26-nation free trade pact to create a common market that would span half the continent from Cairo to Cape Town.

The Tripartite Free Trade Area (TFTA) deal, which must still be fine-tuned and ratified, caps five years of talks to set up a framework for preferential tariffs to ease the movement of goods in an area home to 625 million people.

The Tripartite Free Trade Area (TFTA)

 is expected to boost economic growth 

across Africa (AFP Photo/Lucien Kahozi)

Analysts say it could have an enormous impact on African economies, which account for only about two percent of global trade despite strong growth.

Egyptian President Abdel Fattah al-Sisi, President Robert Mugabe of Zimbabwe and President Omar al-Bashir of Sudan were among those who signed the pact at a summit in the Red Sea resort of Sharm el-Sheikh.

But hurdles remain, with the timeline for bringing down trade barriers yet to be worked out and the deal needing ratification in national parliaments within two years.

"What we are doing today represents a very important step in the history of the regional integration of Africa," Sisi said as he opened the summit.

"We have told the word today... of our desire to adopt practices that are necessary to increase trade among ourselves... We will do whatever is possible to activate this agreement," he later said, wrapping up the summit.

World Bank President Jim Yong Kim said that with the launch of the TFTA "Africa has made it clear that it is open for business."

Bolster intra-regional trade

The deal will integrate three existing trade blocs -- the East African Community, the Southern African Development Community and the Common Market for Eastern and Southern Africa (COMESA) -- whose countries have a combined gross domestic product of more than $1 trillion (885 billion euros).

"The geographical area covers the Cape (of Good Hope) to Cairo... The agreement paves the way for a continental free trade area that will combine the three biggest regional communities," Ethiopian Prime Minister Hailemariam Desalegn said.

Egypt expects to export about $5 billion worth of goods over the next five

 years to fellow members of the Tripartite Free Trade Area (TFTA) (AFP 

Photo/Khaled Desouki)

And Mugabe said the deal would create a "borderless economy" that would rank 13th in the world in terms of GDP.

Members of the three blocs range from relatively developed economies such as South Africa and Egypt to countries like Angola, Ethiopia and Mozambique, which are seen as having huge growth potential.

"The establishment of TFTA will bolster intra-regional trade by creating a wider market" that would "increase investment flow... and enhance regional infrastructure development," a final statement said.

Negotiators were optimistic the deal would be ratified by parliaments, and would help not just developed economies but also smaller ones.

"On the ground it means jobs being created... or else there could be an Africa spring far worse than the Arab Spring," COMESA Secretary General Sindiso Ngwenya, who led the negotiations among the three blocs, told AFP.

Negotiators drafted the deal this week in Sharm el-Sheikh, and said it addresses such concerns as management of trade disputes and protection for small manufacturers once the TFTA comes into force.

The TFTA has been widely welcomed by world business leaders, with experts pointing out that only 12 percent of Africa's trade is between countries on the continent.

'One trade regime'

In 2013, the UN Conference on Trade and Development said Africa must focus on creating more space for the private sector to play an active role if it is to boost intra-continental trade.

Egyptian Prime Minister Ibrahim Mahlab

(R) and President of the World Bank Jim 

Yong Kim attend a meeting to sign a 

trade agreement on June 10, 2015

(AFP Photo/Khaled Desouki)

Analysts say although the continent's growth in the past 15 years outstripped global GDP expansion by nearly three percentage points, falling commodity prices, power shortages, political instability and corruption are still holding back its economies.

Egypt's Minister of Industry and Trade Mounir Fakhri Abdel Nour said the TFTA would help Africa boost trade and investment, while also building infrastructure and production capacities.

Egypt itself expected to export about $5 billion worth of goods in the next five years to TFTA countries.

Officials said companies would benefit from an improved and harmonised trade regime, which would reduce costs by eliminating overlapping trade rules.

"What we have realised is that having one trade regime is better than the costly multiple trade regimes," said Ngwenya.

"The ultimate goal is to expeditiously establish a single free trade area... then establish a single customs union and then merge" the three blocs, he said.

Related Article:

"The End of History"- Nov 20, 2010 (Kryon channeled by Lee Carroll) - (Text-Version)

" .... Africa

Let me tell you where else it's happening that you are unaware - that which is the beginning of the unity of the African states. Soon the continent will have what they never had before, and when that continent is healed and there is no AIDS and no major disease, they're going to want what you have. They're going to want houses and schools and an economy that works without corruption. They will be done with small-minded leaders who kill their populations for power in what has been called for generations "The History of Africa." Soon it will be the end of history in Africa, and a new continent will emerge.

Be aware that the strength may not come from the expected areas, for new leadership is brewing. There is so much land there and the population is so ready there, it will be one of the strongest economies on the planet within two generations plus 20 years. And it's going to happen because of a unifying idea put together by a few. These are the potentials of the planet, and the end of history as you know it.

In approximately 70 years, there will be a black man who leads this African continent into affluence and peace. He won't be a president, but rather a planner and a revolutionary economic thinker. He, and a strong woman with him, will implement the plan continent-wide. They will unite. This is the potential and this is the plan. Africa will arise out the ashes of centuries of disease and despair and create a viable economic force with workers who can create good products for the day. You think China is economically strong? China must do what it does, hobbled by the secrecy and bias of the old ways of its own history. As large as it is, it will have to eventually compete with Africa, a land of free thinkers and fast change. China will have a major competitor, one that doesn't have any cultural barriers to the advancement of the free Human spirit.. ...."