Last week, the Mulungushi International Conference Centre hosted a Regional Stakeholder Workshop on the COMESA Customs Union under the theme 'The Customs Union we Own'. COMESA plans to launch the Customs Union by mid 2009.
The first observation was the thin turn out of Zambian stakeholders on an initiative that will have great impact on the private sector. The few Zambian faces in the room were mainly employees of COMESA. The gurus of Zambian business from ZBF, ZACCI, ZNFU, ZAM, TCZ, ZCGA, MAZ, ZCSMBA, HCAZ, and so on were conspicuously absent. It may be that they were not invited, or that this workshop was not considered important enough to be attended beyond the official opening by the Zambian Minister for Trade, Commerce, and Industry.
Minister Mutati emphasised the importance of developing the COMESA Customs Union, and that the Union would create an African market of close to 400 million people. This would be the world's second largest Customs Union only beaten in size by the European Union.
The Minister highlighted that the development of the Customs Union should be seen as an opportunity by member states rather than a threat, and that the Union would provide for a level playing field for all COMESA countries.
The COMESA Secretary General focussed his address on the benefits of a Customs Union to individual states, the region, and the capacity of the region to trade with the rest of the world. Mr Ngwenya highlighted similar initiatives around the world and underlined the challenges that African countries faced in arriving at a consensus on a workable Customs Union that would encompass the biggest majority of sovereign states.
The stakeholder meeting kept in mind that the COMESA Customs Union will be a stepping stone to the larger goal of eventually developing the African Customs Union as prescribed by the African Union.
The meeting considered the transition from a Free Trade Area to a Customs Union and discussed the benefits, opportunities and challenges.
The meeting further looked at ways of consolidating the regional market through the promotion and enhancement of a regional trading and investment environment. To this end, Infrastructure, Agriculture, Manufacturing, and Trade facilitation were discussed.
A discussion on unlocking the potential for growth through regional liberalisation of Trade in Services was tabled. This issue considered the free movement of people within the Customs Union as a component of enhancing and facilitating Trade in Services.
The meeting discussed the roles of the multilateral trading systems such as the WTO, the EU-EPA's, and the USA AGOA initiative, on the performance of the Customs Union and possibly how these different instruments would assist in consolidating the rules and regulations governing the operation of the COMESA Customs Union.
Much reference was made to the forthcoming North South Corridor meeting scheduled for this month, as a possible vehicle for soliciting financing for the development of various infrastructure programs in the region. References were made to the building of new roads, the rehabilitation of old roads, the building of bridges, the rehabilitation of the railway networks, and the development of information technology networks by the use of Fibre Optic cabling within the region and interconnecting with under sea intercontinental cable systems.
Several challenges were acknowledged, and included import revenue sharing amongst member states, trade policy harmonisation, enforcement mechanisms, harmonisation of trade related laws, rules of origin issues, rigidity and protection of Common External Tariffs from domestic pressures, the convergence of sensitive lists by member states, and issues of standards and quality.
The COMESA Customs Union appears to be easier to talk about than to physically implement, given that member states are at different levels of development and industrialisation thereby presenting a myriad of different circumstances for protection of domestic industry, ability to effectively manage and enforce the rules and regulations, and establish an even playing field for uneven economies.
Three discreet issues come up for the stakeholders to consider amongst the many other important considerations discussed.
What opportunities are open to table a COMESA Currency for the region, much in the same way as the EU adopted the Euro? This issue would work towards developing that level playing field with a currency that was pegged at the same rate against other foreign currencies in all COMESA countries. As with the EU, some countries may opt to use their own currencies until they were ready or convinced that the COMESA currency would benefit their domestic economy.
Secondly, due to the differing development levels and needs of each of the COMESA member states, could we not start with a short list of goods and services that all member states agree to form the basic trading products within the Customs Union, and later expand this list through regular reviews and assessments which would bring about consensus? In a period of five to ten years we may find that more than 90 percent of the goods and services traded in the COMESA states will be within the Customs Union. This mechanism would provide for the COMESA secretariat to mentor and hand hold some states with programs and systems that will prepare the various countries to trade within the Customs Union regime.
A third consideration is to look for development resources wider than our current horizons which tend to limit our sight to the Bretton Woods institutions and Western countries. Can we not also consider engaging the Asian Tigers and the two emerging giants namely; China and India for infrastructure development financing?
The smaller East African Community and Southern African Customs Union have played their part and are being absorbed by the COMESA Customs Union and possibly the SADC Customs Union. Eventually, the desired goal is to absorb these two giants into the African Economic Community by 2025.
The first observation was the thin turn out of Zambian stakeholders on an initiative that will have great impact on the private sector. The few Zambian faces in the room were mainly employees of COMESA. The gurus of Zambian business from ZBF, ZACCI, ZNFU, ZAM, TCZ, ZCGA, MAZ, ZCSMBA, HCAZ, and so on were conspicuously absent. It may be that they were not invited, or that this workshop was not considered important enough to be attended beyond the official opening by the Zambian Minister for Trade, Commerce, and Industry.
Minister Mutati emphasised the importance of developing the COMESA Customs Union, and that the Union would create an African market of close to 400 million people. This would be the world's second largest Customs Union only beaten in size by the European Union.
The Minister highlighted that the development of the Customs Union should be seen as an opportunity by member states rather than a threat, and that the Union would provide for a level playing field for all COMESA countries.
The COMESA Secretary General focussed his address on the benefits of a Customs Union to individual states, the region, and the capacity of the region to trade with the rest of the world. Mr Ngwenya highlighted similar initiatives around the world and underlined the challenges that African countries faced in arriving at a consensus on a workable Customs Union that would encompass the biggest majority of sovereign states.
The stakeholder meeting kept in mind that the COMESA Customs Union will be a stepping stone to the larger goal of eventually developing the African Customs Union as prescribed by the African Union.
The meeting considered the transition from a Free Trade Area to a Customs Union and discussed the benefits, opportunities and challenges.
The meeting further looked at ways of consolidating the regional market through the promotion and enhancement of a regional trading and investment environment. To this end, Infrastructure, Agriculture, Manufacturing, and Trade facilitation were discussed.
A discussion on unlocking the potential for growth through regional liberalisation of Trade in Services was tabled. This issue considered the free movement of people within the Customs Union as a component of enhancing and facilitating Trade in Services.
The meeting discussed the roles of the multilateral trading systems such as the WTO, the EU-EPA's, and the USA AGOA initiative, on the performance of the Customs Union and possibly how these different instruments would assist in consolidating the rules and regulations governing the operation of the COMESA Customs Union.
Much reference was made to the forthcoming North South Corridor meeting scheduled for this month, as a possible vehicle for soliciting financing for the development of various infrastructure programs in the region. References were made to the building of new roads, the rehabilitation of old roads, the building of bridges, the rehabilitation of the railway networks, and the development of information technology networks by the use of Fibre Optic cabling within the region and interconnecting with under sea intercontinental cable systems.
Several challenges were acknowledged, and included import revenue sharing amongst member states, trade policy harmonisation, enforcement mechanisms, harmonisation of trade related laws, rules of origin issues, rigidity and protection of Common External Tariffs from domestic pressures, the convergence of sensitive lists by member states, and issues of standards and quality.
The COMESA Customs Union appears to be easier to talk about than to physically implement, given that member states are at different levels of development and industrialisation thereby presenting a myriad of different circumstances for protection of domestic industry, ability to effectively manage and enforce the rules and regulations, and establish an even playing field for uneven economies.
Three discreet issues come up for the stakeholders to consider amongst the many other important considerations discussed.
What opportunities are open to table a COMESA Currency for the region, much in the same way as the EU adopted the Euro? This issue would work towards developing that level playing field with a currency that was pegged at the same rate against other foreign currencies in all COMESA countries. As with the EU, some countries may opt to use their own currencies until they were ready or convinced that the COMESA currency would benefit their domestic economy.
Secondly, due to the differing development levels and needs of each of the COMESA member states, could we not start with a short list of goods and services that all member states agree to form the basic trading products within the Customs Union, and later expand this list through regular reviews and assessments which would bring about consensus? In a period of five to ten years we may find that more than 90 percent of the goods and services traded in the COMESA states will be within the Customs Union. This mechanism would provide for the COMESA secretariat to mentor and hand hold some states with programs and systems that will prepare the various countries to trade within the Customs Union regime.
A third consideration is to look for development resources wider than our current horizons which tend to limit our sight to the Bretton Woods institutions and Western countries. Can we not also consider engaging the Asian Tigers and the two emerging giants namely; China and India for infrastructure development financing?
The smaller East African Community and Southern African Customs Union have played their part and are being absorbed by the COMESA Customs Union and possibly the SADC Customs Union. Eventually, the desired goal is to absorb these two giants into the African Economic Community by 2025.
Published 7th April, 2009
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