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COMESA

The Common Market for Southern and Eastern Africa (COMESA)

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Zambia is one of the founder members and home to the headquarters of the East and Southern African trading block, COMESA. The other members of COMESA are Angola, Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Namibia, Rwanda, Seychelles, Sudan, Swaziland, Tanzania, Uganda, and Zimbabwe.

The last two decades have been characterised by an expansion in the globalisation of economic activity and an increased economic interdependence between countries. The formation of trading blocs such as the European Union , NAFTA and Mercosur have resulted in substantial increases in regional trade and the mobility of factors of production and money amongst their members. With the lowering of trade barriers by organisations such as the WTO the opportunities for trade will grow.

Certainly many MDCs have benefited from such economic integration. Can trading blocs between LDCs be equally successful? Indeed, are trading blocs amongst the LDCs necessary if they are to grow and develop? Zambia is a member of two trading blocs the Common Market for Eastern and Southern Africa (COMESA) and SADC.

The History of COMESA

In 1965 representatives from governments of Eastern and Southern African countries meeting in Lusaka, recognised a real need for regional co-operation. Without co-operation they would be remain fragmented and vulnerable. They recommended the creation of an Economic Community of Eastern and Southern African states. The need for African countries to become economically less dependent on the former colonial powers grew. In 1978 a meeting of the regions government ministers recommended the creation of a regional trade bloc, beginning with a preferential trade area which would be gradually upgraded over a ten-year period to a common market until the community had been established.

Problems of COMESA

The economic performance of COMESA countries since the 1970s has been disappointing. Most of the countries including Zambia opted for inward-oriented, government interventionist policies of industrial import substitution and agricultural self sufficiency behind protectionist barriers. These have resulted in a low levels of domestic investment, limited foreign investment and accumulating foreign debt. In addition, political instability and strife and droughts have plagued the region.

A New Era in Regional Co-operation

The 1990s have seen recognition that a more outward oriented approach to international trade will enable the full benefits of the trading bloc. The member countries hope that the development of COMESA as a free trade area by the beginning of the year 2000 and the future prospect of evolution into a common market and an economic union will lead to sustainable economic development and political stability in the region.

COMESA is strongly in favour of trade liberalisation and advocates the following measures should be adopted:

• elimination of tariff and non-tariff barriers to trade
• the free movement of capital, labour, goods
• standardised technical specifications
• elimination of restrictions on the movement of goods and individuals
• standardising tax rates (including value added tax and excise duties)
• promotion of the adoption of a single currency and the establishment of a monetary union
• the adoption of a Common External Tariff (CET).

In the short term the success of COMESA following this new outward oriented approach might be measured in the extent to which trade within the trading bloc is increased. In the longer term the benefits of regional co-operation should result in increased in economic development.

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Related Glossary Items:
Trade Diversion
Trade Creation
Common External Tariff
Inward Oriented Development
Import Substitution
Outward Oriented Development
Tariff

Related Issues:
Protectionist Policies of Zambia
Zambia's Trade Policy

Related Theories:
Trade Creation and Trade Diversion
The Formation of Trading Blocs
Terms of Trade
The Imposition of Tariffs and Welfare Loss