The document discusses regional integration in Eastern Africa through the Trade Facilitation Treaty Area (TFTA) and challenges to advancing integration. It notes that the TFTA aims to build on existing regional economic communities like the East African Community (EAC) and South African Development Community (SADC) to liberalize trade and investment. However, differences between member states like development levels and existing agreements could pose challenges to full integration. Deeper integration will require addressing non-tariff barriers, investing in infrastructure to support trade, and ensuring benefits to businesses and human rights. Overall, progressing from the TFTA to a Continental Free Trade Area will depend on how well integration is advanced at the regional economic community level first.

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2. Francis Osiemo, ECDPM
ICTSD/TMEA/UoN Policy Dialogue, 23 September 2015
Nairobi, Kenya
Advancing
Regional Integration

3. Overview of Presentation
Introduction
1. Trading in Eastern Africa
2. The TFTA: opportunities and challenges
3. Advancing regional integration
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4. • The East African Community (EAC), with a Customs Union
(since 2009), is negotiating TFTA as a block.
• South Sudan and Somalia expressed interest in joining EAC.
This might happen in 2016 according to the 16th EAC Heads
of State Summit communiqué.
• Ethiopia is not in the EAC. But has interests in EAC’s
Northern Corridor Integration Projects.
• Tanzania is the only EAC member state not in COMESA. It’s
the only EAC member state in SADC.
• What does this mean for the region with the recent launch
of TFTA? Are we getting closer to the CFTA?
Introduction
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5. Imports within EAC 2010 - 2014
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1. Trading in Eastern Africa

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Exports within EAC 2010 - 2014

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Two Key points from the data……
• Variation when it comes to imports among EAC member states
seems minimal.
• Kenya continues to dominate the export market within the EAC. Its
2014 total value of exports to other EAC member states was US$
1,467 million.

8. • 2003/04 – 2012/13: Ethiopia became the 2nd fastest growing
economy in Africa (after Angola) with an average growth of
10.6% per year. The World Bank projects an average of
10.5% for the 2015/16 despite being an LDC.
• Ethiopia is partnering with EAC on energy sharing and
transport corridors. It attended the 9th Northern Corridor
Integration Projects Summit as an observer.
• (1) Planned Lamu to Addis Ababa rail link. (2) Ethiopia has a
25 year master plan to be a top energy supplier in Africa
including to EAC member states(signed a 25 year power
purchasing agreement with Kenya in 2012).
• Grand Renaissance Dam project? Project started in 2009
before consulting Egypt. Talks now underway.
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The Ethiopian equation in the EAC

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• TFTA launch is a sign of political will for regional integration.
• Market integration, industrial development, and infrastructure
development – a developmental approach aimed at addressing
infrastructure gaps and supply side constraints.
• Tanzania is the only EAC member not in COMESA. Ethiopia is in
COMESA (but not in EAC) but has interests in EAC. TFTA might
benefit market access in EAC.
• If TFTA is a launching pad for CFTA, which approach works best
for integration: (1) “club” of countries; (2) building on existing
RECs; (3) an open agreement ?

10. The TFTA’s integration is based on existing RECs but
is also “open”
Article 2, TFTA
A Free Trade Area among the Member/Partner
States of COMESA, EAC and SADC is hereby
established.
"Tripartite Member/Partner States" means the
Member States of Common Market for Eastern and
Southern Africa, the Partner States of the East
African Community, and the Member States of the
Southern African Development Community who are
party to this Agreement and any other member of
the African Union that would have become
party to this Agreement;
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11. • TFTA has an MFN clause – Article 7, TFTA
• Tripartite Member/Partner States can maintain or
enter new preferential trade agreements with 3rd
countries or among themselves provided that any
advantage, concession, privilege or favor granted
to a third country under such agreements are
offered to the other Tripartite Member/Partner
States on a reciprocal basis.
• What is the implication of this provision on EPAs,
AGOA and any other possible future agreements?
TFTA interaction with other agreements
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12. Article 30 (7)
“In the event of inconsistency or a conflict
between this Agreement and the treaties and
instruments of COMESA, EAC and SADC, this
Agreement shall prevail to the extent of the
inconsistency or conflict.”
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Dealing with inconsistency/conflict between TFTA and
existing REC agreements

13. • TFTA has broadened, but not necessarily deepened integration.
• Key outstanding issues yet to be negotiated: Rules of origin, tariff
offers, and trade remedies
• When TFTA comes into force (on the 13th day when 14 of the 26
member states deposit their instrument of ratification – Article
39(3), TFTA) , the lack of complementarity among member
states might pose a challenge to integration. LDCs: SADC (6),
EAC (4), and COMESA (11).
• TFTA needs complimentary investments (infrastructure, market
access, industries) at REC level to contribute to integration at
TFTA and eventually CFTA level. Trade negotiations should cover
investments.
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The challenges facing TFTA

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• Deepening integration is a question of readiness among member
states and putting mechanisms/incentives to make it work.
• Deepening integration mechanisms/incentives must work for
businesses, especially SMEs that form the backbone of the
economies of member states.
• Deepening integration is about the people. It must incorporate
human rights (labor rights). Sustainability is key (especially in
relation to the environment).
3. Advancing regional integration
The How?

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• Deepening integration must work on the REC level, for it to work
on the continental level.
• For the EAC, deepening integration is about removing existing
NTBs. Might the passing of the Non Tariff Barriers Act, 2015 by
the EAC Legislative Assembly be a way forward?
• Sustainability is not a new concept for the EAC. It is part of EAC’s
Objectives under Article 5, EAC Treaty as read with other Articles
throughout the Treaty. There is now need for realization of the
concept practice.
Final takeaways….

16. Thank you
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