The ratification of the Tripartite Free Trade Area (TFTA) agreement by South Africa will send a strong signal of the country’s commitment to regional integration, Trade and Industry Africa multilateral economic relations chief director Wamkele Mene told members of the Portfolio Committee on Trade and Industry, in Cape Town, this week.
The TFTA comprises three regional economic blocks – the Common Market for Eastern and Southern Africa, the East African Community and the Southern African Development Community (SADC).
Additionally, the TFTA is based on the development integration approach that combines market integration with industrial and infrastructure development.
It will facilitate harmonisation of trade regimes, joint implementation of regional infrastructure projects and programmes and the development of regional value chains, explained Mene.
The ratification would also bring South African exporters a step closer to enjoying preferential treatment under the TFTA.
The TFTA was launched in Egypt in June 2015.
South Africa signed the agreement in July 2017. Twenty-two of 26 member States have signed the agreement, which will enter into full force once it has been ratified by 14 countries.
So far, besides South Africa, only Egypt, Uganda and Kenya have ratified the agreement.
Mene said there were numerous benefits that would accrue to South Africa as a result of the agreement. These include access to new and dynamic markets characterised by a combined gross domestic product of $1.2-trillion and a combined population of about 626-million people, which is over half the total African population and economy.
“Some TFTA countries such as Rwanda, Ethiopia, Kenya are among the fastest-growing economies on the continent. South Africa will build on its current share of the African market and have access to a larger, more integrated and growing regional market.
“This has the potential to stimulate industrial development, investment and job creation. Therefore, the TFTA will promote intraregional investment,” stressed Mene.
South Africa’s trade with TFTA countries represents about 16% of its trade with the world.
In 2017, total trade with TFTA countries was in excess of $27.6-billion. The bulk of the trade is with fellow SADC countries.