Comesa and Sadc: Prospects and Challenges for Regional Trade Integration

Abstract

This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. Regional integration has been seen in Africa as a means of encouraging trade and securing economies of scale. This paper examines in detail the prospects and challenges for trade expansion in the two most prominent arrangements in eastern and southern Africa: the Common Market for Eastern and Southern Africa (COMESA) and the Southern African Development Community (SADC). It finds that possibilities of growth in intraregional trade may be limited, but that the two arrangements offer opportunities for member countries to gain policy credibility for trade reforms and tariff liberalization and to address structural weaknesses. In this regard, the negotiation of the Economic Partnership Agreements with the European Union can also have a significant impact.

The competitiveness of Serbian agro-food sector

“…The question arises what is the complementarity of the exchange of products from the agro-food sector in Serbia (and the neighbouring EU member states) and the European Union (EU 28). In the literature individual opinions can be found which are related to the theme of complementarity in international merchandise trade (Drysdale, Garnaut, 1982;Michaely, 1996;Khandelwal, 2004, Lukauskas et al, 2013, as a phenomenon of correspondence between exports of one country and imports of another country. Despite the fact that the values of this index for Serbia are close to 1, it still has the lowest compatibility in the foreign trade of agro-food products with the EU 28 in relation to the observed countries.…”

Uganda’s Revealed Comparative Advantage in COMESA

“…Overlapping memberships often result in the stretching of negotiation resources such as membership fees, administrative costs, and operation capacity that most countries cannot afford. This also leads to conflicting objectives among rival arrangements hence the withdrawal of membership from COMESA by the aforementioned countries (Khandelwali, 2004). …”

“…The following are member states of the FTA; Burundi, Comoros, DRC, Djibouti, Egypt Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Zambia, and Zimbabwe (Barigaba, 2012). According to Khandelwali (2004), reasons for the delays in the integration process include indecisiveness in the agreed EAC tariff structure. The EAC first agreed to eliminate all tariff barriers.…”

Regional integration in Africa versus higher levels of intra-Africa trade

“…Khandelwal (2004) argues that progress in the SADC region is constraint by bottlenecks such as distortions in trade regimes, inadequacies in customs, transport and communication infrastructure. The World Bank's (2011) African competitiveness report states transport modes and trade facilitation regimes as factors that hinder growth in most African countries and therefore limit their ability to become regional players.…”