Traders from the East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA) and South African Development Community (SADC) may soon trade freely across borders if their heads of states sign a tripartite agreement next week.

Speaking on the sidelines of the Trade Mark East Africa stakeholder forum at Serena Conference Centre, trade minister Amelia Kyambadde said all contentious issues have been ironed out and that heads of state of the three regional blocs will, on June 10, sign the Free Trade Area agreement.

“The contentious issues included dispute settlement and rules of origin, which is partially done,” he said.

If signed, it will pave way for the creation of a larger market to boost intra-regional trade and reduce the cost of doing business.

The signing had been postponed twice.

It had been planned for December last year but was pushed to mid-February 2015, as SADC reportedly requested for a postponement to allow for further internal consultations. It was again deferred from February to June.

Some trade analysts are sceptical whether Uganda will reap meaningful benefits from a larger market yet it has failed to fully exploit the EAC market.

“The agreement will open us to bigger economies like South Africa; the question is can we handle yet we still have challenges with Kenya under the EAC and Egypt under COMESA,” a source who asked not to be named for fear of being labelled a saboteur, said.

The source added that Uganda will become a supermarket for goods manufactured in other countries since it has a weak export base.

The Private Sector Foundation Uganda (PSFU) executive director, Gideon Badagawa, earlier said exportation of products from EAC to other blocs could be challenging since SADC is more developed than EAC in terms of standards, policies and processes.

Kyambadde, however, downplayed the fears, saying there is always an opportunity cost to every system and project. She maintained that there are more advantages to the tripartite than the disadvantages.

“We need a strong economic bloc because we need a market for our goods and services; we need our people to migrate to other areas for greener pastures. We cannot confine ourselves to Uganda or East Africa,” she said.

She added: “We can fine tune some of those fears as and when they arise but we cannot shy away from them.”

The plan to establish the FTA for the three trade blocs was initiated about nine years ago to accelerate economic integration of the African continent, enable seamless flow of trade to boost trade volumes, enhance competition and contribute towards economic growth.

The integrated market involves 26 member states with a combined population of 625 million people and a Gross Domestic Product (GDP) of $1.2 trillion (about sh3, 624 trillion).

The FTA is expected to create huge trade opportunities, increase the flow of foreign direct investment into the tripartite region and also help iron out the overlapping membership in these economic blocs.

Some countries belong to more than one trading bloc.

Source: New Vision

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.