1. Department of Foreign Trade Ministry of Commerce, Trade & Industry

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

3.  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

4.  COMESA Roadmap:  Launch FTA by 2000  Launch Customs Union by 2009  Launch Common Market by 2014  Attain Monetary Union and single currency by 2018

5.  FTA launched in Lusaka 2000  13 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.

6.  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

7.  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 13 th 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

8.  Access to wider market  Stimulus 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 Union  enhanced trade facilitation procedures for importers, reducing the cost of production and doing business

9.  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

10.  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;