Department of Foreign Trade Ministry of Commerce, Trade & Industry

Introduction and background COMESA Free Trade Area COMESA Customs Union Zambia’s state of preparedness Conclusion

COMESA Treaty signed – November 1993 COMESA – as an organisation independent states COMESA States - agreed to co-operate in developing

their natural and human resources Key objectives:

◦ Attain sustainable growth and development of member states (productions & marketing structures)

◦ Promote joint development in all fields of economic activity◦ Co-operate in the promotion of peace, security and stability ◦ Co-operate in the creation of an enabling environment for

investment ◦ Co-operate in strengthening the relations between COMESA

and the rest of the world◦ Contribute to the realisation of the objectives of the African

Economic Community

COMESA Roadmap: Launch FTA by 2000 Launch Customs Union by 2009 Launch Common Market by 2014 Attain Monetary Union and single

currency by 2018

FTA launched in Lusaka 200013 out of 19 member states part of FTA Trade between FTA countries is virtually

customs duty Volume of intra-COMESA trade increased

from USD 3 billion in 2000 to USD 8.6 billion in 2007

Since 2000 approx 6 Zambian companies received financial support from COMESA PTA Bank.

Customs Union - 2 or more customs territories adopt a Common External Tariff (CET) and common trade regulations on all goods coming from third countries

Trade between members of the Customs Union is virtually duty free as with the FTA

COMESA CET adopted by Council of Ministers in Nairobi in 2007:

0% for raw materials; 0% for capital goods; 10% for intermediate products; 25% for finished products Above CET endorsed June 2009 by Heads of State

Summit

Additionally , June 2009 Summit adopted following elements of the COMESA Customs Union:

- Council regulations governing the Customs Union;- Customs Union Management Regulations; and - Public procurement Regulations.

COMESA Customs Union was launched at the 13th Summit, 7-8 June 2009 in Zimbabwe.

To cushion the potential negative implications o the CET , member states were allow to develop lists of sensitive product to be shielding from CET application.

Criteria for designing sensitive products: - Revenue implications;- Infant Industry protection;- Merit goods COMESA Fund to help member States mitigate the expected

adjustment costs Five year transition period

Access to wider marketStimulus to increased/mass production

(economies of scale)Equal protection from outside competition

(CET)Wide range of products (variety/choice)Price advantage for goods produced in the

Customs Unionenhanced trade facilitation procedures for

importers , reducing the cost of production and doing business

Maintain macroeconomic stability; Promote economic diversification; Maintain borrowing within sustainable level; Increase investment opportunities in the

productive; Enhance competitiveness of the domestic

economy; Address bottle necks in the supply chain; Increase efficiency at border posts; CTI Policy revised 2007

COMESA states agreed to co-operate in developing their natural and human resources;

The Custom’s Union will create opportunities for countries to fully exploit their comparative advantages;

The Custom Union is a first step to wider integration under the tripartite, Africa and global level;