using appropriate examples analyse the implications of the mauritian membership to comesa

8/22/2019 Using Appropriate Examples Analyse the Implications of the Mauritian Membership to COMESA

http://slidepdf.com/reader/full/using-appropriate-examples-analyse-the-implications-of-the-mauritian-membership 1/16

Using appropriate examples analyse the implications of the Mauritian membership to

COMESA

1.0 Introduction

Mauritius has over the years methodically fashioned the pre-requisites itself into a really

advantageous, safe and business friendly location of unparalleled quality for the

establishment of global entities as well as providing a conducive economic and political

environment for the development of trade among numerous countries.

Over the years, it has embraced bold reforms that have made it among the most open,

competitive and low tax economies in the world. Capitalizing on its strategic location and

relying on its sound economic base, Mauritius has positioned itself as a premier and reputable

International Financial Centre in the Indian Ocean.

It is proactively revising its legal and regulatory framework as well as its business

environment, in line with world market demand.

Some of the unique element that makes Mauritius an attractive and competitive jurisdiction

includes:

1. Political, economic and social stability.

2. Pro-business environment, with the government acting as the facilitator.

3. Preferential market access to the EU (under Cotonou Agreement), US (Under the Africa

Growth and Opportunity Act – AGOA) and Africa (under the common Market for Eastern

and Southern Africa – COMESA and under the Southern African development

Community – SADC

4. High level of protection to investors through a wide network of Double Taxation

Avoidance Treaties (DTAs) and Investment Protection Agreements (IPPAs). Mauritius is

also signatory member to a number of international, regional and bilateral conventions

and agreements.

5. Close historical, political, economic and cultural ties with countries on the competitive

edge of technology and information society (India, China, South Africa, Europe and

North America)6. Attractive package of fiscal and non-fiscal incentive and high level of facilitation

services.

7. Ease of doing business for incorporation or registration of a company.

8. Young, dynamic competitive and bilingual (English/French) workforce with good

qualifications, skills and experience.



2.0 Regional Agreements

One of the most striking development in the world trading system since the mid-1990s is a

surge in Regional Trade Agreements (RTAs). It is well documented that countries have been

engaging in international trade since ages. Regional economic integration has a long history

in virtually all parts of Sub-Saharan Africa. Regional integration is characterized along three

main dimensions namely Geographic Scope, The substantive coverage and the Depth of

integration. From about 50 till 1990, the number of RTAs notified to the World Trade

Organization (WTO) has crossed 250 in 2003 and estimates indicate that over 300 RTAs will

be in effect by 2007 (Pal, 2004).

Figure 1 The relationship between the various levels of regional agreements.

Source Das (2001)

Most of the sub-Saharan African (SSA) countries economic performance has been

disappointingly low compared to other developing regions. This has been attributed to manyfactors, among them; is the inability for most African countries to secure access to larger

markets, inherent high trade costs among neighbours, lack of an effective framework for

regional cooperation and resource pooling, inadequate infrastructure, and the pressure from

development partners pursuing their own foreign policy objectives in the continent. As a

consequence, among other measures geared towards promoting economic growth and

development, Africa is witnessing a renewed momentum for integration. Besides, the fear of

marginalization together with the fact that, most of the African economies are too small on

their own to negotiate with powerful trading blocs, has also led to increased interest towards

regional economic integration.



The continent has witnessed a shift from “closed regionalism” with import competing

approach to a more open approach. In a context of wanting to have in place World Trade

Organisation (WTO) consistent agreements when the Cotonou Agreement expired, the

European Union (EU) pushed hard in 2007 to define interim agreements that focus primarily

on reciprocal tariff reductions to satisfy GATT Article XXIV requirements. These requirethat the parties to a free trade agreement remove tariffs on “substantially all” trade under a

defined and reasonable timetable.

African Regional Trade Arrangements (RTAs) have largely been motivated by the

continent‟s desire to promote growth through regional cooperation. RTAs, by creating larger

markets, are thought to enable African countries to exploit economies of scale and enhance

domestic competition as well as to raise returns on investment and, hence, attract more

foreign direct investment (FDI). On average, each African country belongs to four RTAs

(World Bank 2004) and on top of the list are many Eastern and Southern African countries.

As for Mauritius, it is a member of South African Development Community (SADC),

Common Market for Eastern and Southern Africa (COMESA) and the Indian Ocean

Commission (IOC).

There is overlap of membership among Regional Economic Communities (RECs) in the

Eastern and Southern African region to an extent unparalleled anywhere else in the world.

For example, almost half of COMESA members are also members of SADC, whose

membership is smaller than COMESA's as shown in Figure 1 below. This may tend to

weaken the integration process. It leads to costly competition (even for attention and

resources); conflict; inconsistencies in policy formulation and implementation; unnecessaryduplication of functions and efforts; fragmentation of markets and restriction in the growth

potential of the sub-region. Yet, as most RECs in the Eastern and Southern African region

wish to move to a Customs Union (CU), member states with multiple memberships at present

will have to strike the balance of the costs and benefits of belonging to one or another CU

grouping.



Figure 2: Overlapping membership in regional integration groups

2.1 South African Development Community (SADC)

The Southern African Development Community (SADC), currently with 14 members started

as development cooperation in 1980, the Southern African Development Coordination

Conference (SADCC), and was reorganized as a development community (SADC) in 1994.

SADC approaches regional integration differently by concentrating on relaxing the supply

side constraints to trade through regional cooperation in various sectors such as

infrastructure, agriculture, transportation and human resources, etc. Although, SADC trade

protocol laid less emphasis on timetables for the establishment of a customs union or acommon market, SADC reached an agreement in 2000, to create a free trade area. SACU

(Southern Africa Customs Union) being a subset of SADC was established in 1910 and

recently renegotiated between South Africa, Botswana, Namibia, Lesotho and Swaziland as

the new SACU agreement on 21st October 2002. Four of the members fall under a Common

Monetary Area, with Botswana withdrawing from its predecessor the Rand Monetary Area in

1974. SACU over the years managed to maintain virtually free internal trade behind a high

common for large revenue payments to the smaller members.



SADC is an intergovernmental organization aimed at promoting economic development. The

objective of SADC is to foster harmonized regional development through the concerted

undertaking of economic activities on a sector-by-sector basis. Current member states are

Angola, Botswana, Democratic Republic of Congo (DRC), Lesotho, Malawi, Mauritius,

Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia andZimbabwe. SADC headquarters are in Gaborone, Botswana. All SADC counties are

contracting parties to the General Agreement on Tariffs and Trade (GATT), extending MFN

treatment to each other. They are members of the World Trade Organization (WTO).

SADC and its member states are expected to act according to the following principles:

• Sovereign equality of all member states;

• Solidarity, peace and security;

• Human rights, democracy and the rule of law;

• Equity, balance and mutual benefit;

• Peaceful settlement of disputes.

2.2 Indian Ocean Commission (IOC)

The Indian Ocean Commission (IOC) is a regional organization regrouping four African

Caribbean and Pacific (ACP) states (Comoros, Madagascar, Mauritius and Seychelles) plus

one ultra-peripheral region of the EU (Reunion, an overseas department of France). Set up in

1984, the IOC is one of the first formal experiences of regional cooperation in this part of the

vast region constituted by the Indian Ocean. The approach, essentially political in nature, was

at the time part of the drive to reinforce cooperation within the Southern hemisphere. Theobjectives and missions established by the founders of the IOC were primarily to strengthen

links between the peoples of its member states and improve their standard of living,

promoting cooperation in a number of areas: diplomacy, economy, trade, agriculture, fishing,

the conservation of resources and ecosystems, culture, science and education. In terms of

development, however, these islands are not all on an equal footing and are in fact at various

levels, which are often, very far apart. Reunion is part of the developed world; Comoros and

Madagascar are members of the group of least developed countries (LDCs); while Mauritius

is classified as a newly industrialized country and the Seychelles as a middle-income country.

2.3 Common Market for Eastern and Southern Africa (COMESA)

The Eastern and Southern Africa trade bloc that is the focus of this study is the Common

Market for Eastern and Southern Africa (COMESA). COMESA, currently with 19 members

was established in 1994 as a successor of the Preferential Trade Area (PTA), with the primary

objective of achieving regional economic integration and growth - as defined by its treaty “as

an organization of free independent sovereign states which have agreed to co-operate in

developing their natural and human resource for the good of all their people”.



COMESA free trade area was officially launched on 31 October 2000 and has currently 13

member states trading on a full duty free and quota free basis, with the remaining countries at

various stages of joining the Free Trade Area (FTA) that are in the process of abolishing

internal tariffs and quota restrictions (MCCI, 2013). COMESA has not yet adopted the

timetable for the abolition of all non-tariff barriers to intra-community trade. However, theusual non-tariff barriers such as quota restriction, licensing requirements, import permits and

foreign exchange controls have been lifted or abated in most countries (Carmignani, 2006).

COMESA was pushing ahead with its plan to adopt a common currency for regional

members by 2025.

2.3.1 Principles of COMESA

The Treaty establishing COMESA binds together free independent sovereign states which

have agreed to cooperate in exploiting their natural and human resources for the common

good of all their peoples. In attaining that goal, COMESA recognizes that peace, security and

stability are basic factors in providing investment, development, trade and regional economic

integration. Experience has shown that civil strives, political instabilities and cross-border

disputes in the region have seriously affected the ability of the countries to develop their

individual economies as well as their capacity to participate and take full advantage of the

regional integration arrangement under COMESA. It has now been fully accepted that

without peace, security and stability there cannot be a satisfactory level of investment even

by local entrepreneurs. Therefore, in pursuit of the aims and objectives stated in Article 3 of

the COMESA Treaty, the member states of COMESA have agreed to adhere to the following

principles:• Equality and inter-independence of the member states;

• Solidarity and collective self -reliance among the member states;

• Inter -State cooperation, harmonization of policies and integration of programmes among

the member states;

• Non-aggression between the member states;

• Recognition, promotion and protection of human and people's rights in accordance with

the provisions of the African Charter on Human and People's Rights;

• Accountability, economic justice and popular participation in development;

• The r ecognition and observance of the rule of law;

• The promotion and sustenance of a democratic system of governance in each member

state;

• The maintenance of regional peace and stability through the promotion and

strengthening of good neighborliness; and

• The peaceful settlement of disputes among the member states and the promotion of a

peaceful environment as a pre-requisite for their economic development.



2.3.2 Aims and objectives of COMESA

The aims and objectives of COMESA are defined in the Treaty and its Protocols. They have

been designed so as to facilitate the removal of the structural and institutional weaknesses in

the member states and the promotion of peace; security and stability so as to enable themattain sustained development individually and collectively as a regional bloc. These are as

follows:

• To attain sustainable growth and development of the member states by promoting a

more balanced and harmonious development of its production and marketing structures;

• To promote joint development in all fields of economic activity and the joint adoption of

macro-economic policies and programmes; to raise the standard of living of its peoples,

and to foster closer relations among its member states;

• To cooperate in the creation of an enabling environment for foreign, cross-border and

domestic investment, including the joint promotion of research and adaptation of

science and technology for development;

• To cooperate in the promotion of peace, security and stability among the member states

in order to enhance economic development in the region;

• To cooperate in strengthening the relations between the Common Market and the rest of

the world and the adoption of common positions in international fora; and

• To contribute towards the establishment, progress and the realization of the objectives

of the African Economic Community.

The COMESA agenda is to deepen and broaden the integration process among member states

through the adoption of more comprehensive trade liberation measures such as the completeelimination of tariff and non-tariff barriers to trade and elimination of customs duties;

through the free movement of capital, labor, goods and the right of establishment; by

promoting standardized technical specifications, standardization and quality control; through

the elimination of controls on the movement of goods and individuals; by standardizing

taxation rates (including value added tax and excise duties), and conditions regarding

industrial cooperation, particularly on company laws, intellectual property rights and

investment laws; through the promotion of the adoption of a single currency and the

establishment of a Monetary Union; and through the adoption of a CET.

By agreeing to the above, member states have agreed on the need to create and maintain:

• A full free trade area guaranteeing the free movement of goods and services produced

within COMESA and the removal of all tariffs and non-tariff barriers;

• A customs union under which goods and services imported from non-COMESA

countries will attract an agreed single tariff all COMESA States;

• Free movement of capital and investment supported by the adoption of common

investment practices so as to create a more favorable investment climate for the entire

COMESA region:

• A gradual establishment of a payments union based on the COMESA Clearing House

and the eventual establishment of a common monetary union with a common currency;



The adoption of a common visa arrangement, including the right of establishment leading

eventually to free movement of bona fide persons.

2.3.3 COMESA achievements

COMESA, as well as its predecessor the PTA, has achieved a lot in the area of trade,

customs, transport, development finance and technical cooperation. Impressive progress has

also been made in the productive sectors of industry and agriculture. Trade facilitation and

trade liberalization measures are bearing fruit.

• Intra-COMESA trade, valued at about $US4.2 billion, is growing at the rate of 20 per cent

per annum. Trade with third countries is growing at about 7 per cent per annum.

• Transport transit facilitation measures have resulted in a reduction of costs by 25 per cent.

• Inter -state movement of persons, goods and means of transport has been facilitated.

• In the sector of telecommunications, special emphasis has been placed on network

development to enable direct telecommunication links through more reliable infrastructure.

• Establishment of several important institutions was achieved, including the PTA Trade and

Development Bank, the COMESA Clearing House, the COMESA Re-insurance Company

and the COMESA Leather and Leather Products Institute.

• The PTA Bank has, over the years, been very active in promoting investments and

providing trade financing facilities.

• The Re-Insurance Company has, since its establishment in 1992, been able to carve out a

reasonable share of the regional insurance business and is now transacting business in some

nineteen countries.

• Investment in the region is promoted and this issue is addressed through facilitation of bilateral agreements; promoting export drives by individual member states, and identifying

specific projects, which have the potential to act as growth poles between two or more

member states.

The COMESA clearing house has introduced the Regional Payment and Settlement system

(REPSS) which allows members countries to transfer funds more easily within COMESA.

This service is also available to non-member countries. The vision behind such an ambitious

system is to stimulate economic growth through an increase in intra- regional trade by

enabling importers to pay in their local currencies whilst on the other hand exporters are able

to invoice in their local currency as well. The system operates through member countries‟

central banks to avoid any complex chains that may otherwise occur. (MCCI, 2013)

According to The Mauritius Chamber of Commerce and Industry (MCCI, 2013), the FTA has

boosted intra COMESA trade, increasing it by nearly six fold from USD 3.1 billion in 2000

to USD 17.4 billion in 2011.



2.4 Mauritius Implications

The following table depicts the membership of Mauritius in several regional trade

agreements.

The European Union (EU) is the main destination for COMESA members‟ products. These

countries products are exported to the EU under several initiatives, namely the Everything

But Arms (EBA) initiative and the Cotonou Agreement (following the Lomé Convention).

Under both these agreements some of these countries have preferential market access in the

EU. Lome (I-IV), the Cotonou Agreement and more recently the Economic Partnership

Agreement (EPA) have tremendously contributed towards the development of the Mauritian

economy.

Mauritius was an adherent of both the Sugar Protocol – giving duty-free access to sugar

exports from African, Caribbean and Pacific (ACP) countries into the European Union (EU)markets at a guaranteed price, and the Multi-Fibre Agreement (MFA) – setting quotas for

developing countries which export Textile and Apparel to the EU. On one hand, Mauritius

secured a lion‟s share portion of the sugar export to the EU while on the other hand, given

that our MFA quotas were not binding, many Taiwanese and Hong-Kongese firm expanded

their production of garments in the country. Mauritian firms benefited in terms of foreign

expertise and technology spill-overs. In the late 1990‟s, the Sugar sector and Textile sector

were the two main pillars of our economy making up respectively about 25% and 50% of

total exports.



After 1995, the country experienced its first „external shock‟, in terms of erosion of

preferences, when the World Trade Organisation (WTO) was institutionalized. With the

creation and rising importance of the WTO as a regulator of trade, the world went through a

period of liberalization whereby all quotas, tariffs and preferential agreements were gradually

being abolished so as to promote free and fair trade practices. The MFA was dismantled onthe 31st December 2004 while guaranteed prices under the Sugar protocol was slashed by

36%. Mauritius had to face tougher competition for its exports of sugar and apparel products

and could no longer depend exclusively on these sectors as a vehicle for growth. Policy

makers decided to move away from traditional exports and started to promote tourism

services as a new pillar. Now, some other sectors such as “Seafood Hub”, “Financial

Services”, “Knowledge”, “Healthcare” and the “Information, Communication &

Technology” are also becoming very important features of the Mauritian economy.

Over the last years, the Economic Partnership Agreement (EPA) has formed the basis for

discussion. The EPA is essentially a means to make the Cotonou Agreement more WTO-

compatible. However, it relates to all African Caribbean and Pacific (ACP) countries, which

makes the process more time consuming. For Mauritius, it will be more relevant to negotiate

from the bilateral front, either independently or through a regional organisation. In fact, the

Indian Ocean Commission (IOC) is the only regional organisation which includes a European

partner (France) alongside Mauritius. France is represented in the Organisation through

Reunion islands. So, this could be a basis for further bilateral talks to consolidate bilateral ties

with Europe. Cooperation between Mauritius and EU has mainly taken the form of

developmental cooperation and financing programmes. The 10 th European Development

Fund (EDF) provides some EUR 65.5 million for developmental funding with a totaldevelopment cooperation portfolio of EUR 308 allocated to Mauritius for the period 2008-

2013. In addition, EU has supported regional programmes to be implemented in Mauritius,

such as, the Africa Regional Technical Assistance Centre South (AFRITAC South) and the

Regional Multi-disciplinary Centre of Excellence (RMCE) falling under the Common Market

for Eastern and Southern Africa (COMESA). Other areas of cooperation include fisheries,

fight against piracy and promotion of maritime security and the movement of natural persons

in terms of the Schengen Visa waiver. A recent example of how Mauritius benefited from its

membership in the IOC was when the Malagasy Patrol Atsantsa caught two Sri Lankan

vessels fishing illegally 750 kilometers north of Mauritius. This demonstrated the

commitment of the IOC in the fight against illegal fishing. (l‟express online, 25.02.13)

Trade policy reform from the World Trade Organization (WTO) negotiations, regional

negotiations and/or bilateral agreements resulting in lowering of tariff for instance in

agricultural products would lead to an increase in import and declining of price of imported

goods thereby enhancing food security. The removal of support, however, is beneficial in the

long run as it would enhance competitiveness of agricultural products from African countries.

Mauritius should consider strategies to make use of its regional affiliations to the Southern

African Development Community (SADC), Common Market for Eastern and Southern

Africa (COMESA) and Indian Ocean Commission (IOC) to achieve a degree of food securityso that we need not divert resource from exporting enterprises to local production in order to



meet the demand of a growing population level. Two broad options have generally been

followed by countries attempting to achieve adequate levels of food security: food self-

sufficiency and food self-reliance:

(1) Food self-sufficiency, or the provision of a level of food supplies from national

resources above that implied by free trade, represents a strategy followed by a widerange of countries. While this approach implies the provision of sufficient domestic

production to meet a substantial part of consumption requirements, it does not

necessarily imply that all households in the country have access to all the food they

require. In a number of countries which are net food exporters, substantial numbers of

households are suffering from malnutrition.

(2) A strategy of food self-reliance reflects a set of policies where the sources of food are

determined by international trade patterns and the benefits and risks associated with it.

This strategy has become more common as global trade has become more liberal. It is

even argued that improved food security, as well as efficiency gains, may be achieved

more satisfactorily, even in countries where agriculture remains a major contributor to

GDP, by shifting resources into the production of non-food export crops and importing

staple food requirements.

Food Security Initiatives have been explored in the past by Mauritius from a bilateral

perspective. For e.g. Mauritius negotiated with Mozambique to use its land for agricultural

purposes for plantation of wheat and rice.

It is also interesting to note that COMESA internal trade is very minimal as a share of

COMESA trade to the world. Exports to non-COMESA countries (NONCOMESA) isobserved to have been very influential to the economic development of the countries. This is

principally due to the large export volume from COMESA to EU and USA under the Lomé

Convention/ Cotonou Agreement and the AGOA preferential regime. Moreover, the

preferential access to the European and the US markets attracted small Asian investors to

locate textile and garment manufacturing operations in the country. Interestingly the growth

of COMESA countries is principally determined by their level of investment. Mauritius has

been successful in channeling significant export oriented Foreign Direct Investment due to its

low-cost labour, efficient infrastructure, preferential access to large markets, sound legal

system, political stability, government policies favourable to foreign investors and a strong

business environment with a vibrant entrepreneurial culture.

FDI has contributed significantly to the diversification of the Mauritian economy. This type

of investment now plays a pivotal role in the development of the country‟s economy. Indeed,

Mauritius is among the most competitive and successful economies in Africa and actively

seeks FDI. At the same time, Mauritius remains one of the best performers of Africa with an

average annual growth rate of around 4 per cent. The significant contribution of FDI to the

Mauritian economy has been already highlighted in Seetanah (2006). Kamau notes that the

greater the pace towards deeper regional integration between members of a trade bloc leads to

higher economic performance. In addition, less restrictive trade policies within each countryand as a trade bloc with the rest of the world also promotes economic growth for countries of



Eastern and Southern Africa. This point to the important role played by deep economic

integration involving regional integration and WTO compatible tariffs reduction on growth.

Unilateral, multilateral and preferential trade reforms when pursued simultaneously have a

significant impact on growth.

Furthermore, according to (Gnany, MCB Focus, 2012) greater integration is expected to

result in the achievement of the following

(i) Economies of scale, with enlarged market sizes leading to lower average production costs

(potentially passed on to customers in the form of lower prices)

(ii) Dynamic gains emanating from greater competition across regional markets, which are

anticipated to bring about augmented production efficiencies and targeted strategic

orientations, in turn facilitating the expansion of firms serving niche markets

(iii) high levels of knowledge and technology transfer stemming from imports of capital

goods as well as increased linkages and interactions with foreign counterparts; and

(iv) Attraction of FDI from both within and outside the regional integration arrangements, as

a result of market enlargement and production rationalisation

2.5 Discriminatory effects of trading blocs

Initially, the WTO encouraged the growth of RTAs, as it is generally acknowledged that

regional and multilateral integration initiatives are complements rather than alternatives in

the pursuit of free trade. However, the proliferation of RTAs in global trade and the

increased diversion of trade through this route is becoming a cause for concern for the

multilateral trading system under WTO (Gupta& Pal, 2003). Pal (2004) further added that

by its very nature RTAs are discriminatory. With reference to WTO rules, the WTO

explains that countries within an RTA can trade among themselves using preferential

tariffs and easier market access conditions than those applicable to other WTO members.

Consequently, WTO member-countries that are not a part of the RTA lose out in these

markets.

Some empirical evidence shows a relationship between an increase in international trade,

wage dispersion and the level of employment, which has led a number of economists to

conclude that recent internationalisation of economies has contributed to the increase in

the dispersion of wages and unemployment (Sachs and Shatz, 1994; Leamer,

1996;Baldwin and Cain, 2000; Haskel and Slaughter, 2001).

Trade among non-equals (i.e. producers in developed vs. developing countries) can lead

to different adverse outcomes such as the decimation of entire industries in some



developing countries. Similarly, simply expanding the realm of free trade has, in many

cases, resulted in an actual increase in poverty and environmental degradation, and in an

adverse impact on women and food security across the developing world, undermining

efforts to achieve sustainable human development (McCulloch ,2001)

Since the establishment of the World Trade Organization (WTO), trade disputes between

its country members have escalated sharply. An increasing number of developing

countries have become involved in trade disputes, while more conflicts have arisen

between the developed countries. In addition, more of these disputes have been related to

non-tariff barriers and as such, have been more difficult to settle under the WTO than

under its predecessor, the GATT. These developments have caused public concern about

the consequences of the WTO and this has led to calls for more serious research attention

(Yin and Lee, 2004).

2.6 Opportunities to Member countries

Formation of economic alliances such as COMESA and ECOWAS will stimulate intra-

regional trade and commerce, particularly if these alliances also become Free Trade Areas

(FTA), as they intend to be.

Money which used to be spent on maintenance of disproportionate armies and police

forces which are used for repression can be spent on beneficial projects for development

and improvement of the quality of life of the people in the region.

The World Bank, IMF and other lenders are generous when it comes to aiding highly

indepted poor countries (HIPCs). They have put in place certain initiatives for helping

poor countries.

2.7 Problem that may arise from within economic alliances (Beraho, 2007)

It is usually the case that countries needing help are the ones that are heavily indebted and

burdened by debt. In such cases, the countries would not have funds to stimulate their economies as they would be spending most of their little money on debt service to remain

qualified for possible aid in the future.

Formation of political and economic alliances like COMESA or ECOWAS may not work as

well as originally envisioned because the members are not bound to stay in the alliance. That

means that there is always a danger of possible future disintegration, upon a member or

members disagreeing. Indeed, currently there have appeared two smaller alliances within

COMESA already and they are: the EAC, and the SADC. If EAC and SADC are independent,

then COMESA cannot declare a FTA for all its members. In fact, COMESA would not



function with those smaller alliances inside it. It is difficult to see the future of a COMESA

with fragmented interior. (PanAfrica News Agency, 2000)

Business Africa (2000) mentioned that though COMESA members have signed agreements

to have free trade with non-members, South Africa additionally has an agreement with theEuropean Economic Community and Kenya has a similar agreement with Egypt. It is fear

that if this practice is not abandoned it will tend to dilute COMESA‟s regional synergy and

make unity difficult to achieve.

3.0 Conclusion and recommendations:

Although the trade blocs have made considerable progress in integrating their economies,

there is room for improvement that would help member countries reap even high benefits

from economic integration. First, there is need to address the issue of lack of political will

among integrating economies. Lack of political will as demonstrated by poor implementationof agreed trade reforms could be improved by adopting proper monitoring mechanisms,

perhaps similar to the European Union‟s “Single Market Scoreboard”. In addition to

providing vital information, the scorecard is useful as a disciplinary measure- to shame

governments with a record of poor implementation into action and to empower governments

with good records of implementation and hence challenge those members who are not

meeting commitments. Second, more effort is required towards macroeconomic policy co-

ordination. These countries have been pursuing very similar policies under the auspices of the

IMF and the World Bank in terms of economic restructuring. However, from the results

obtained, it can be inferred that a more proactive economic policy co-ordination will be

beneficial to the region and should be encouraged. A resolute effort must be made to achieve

greater institutional and economic policy convergence. This assumes that countries establish

ambitious, but feasible timetables for instituting reforms and establishing regional

institutions, while realistically evaluating the resources required. These efforts will reduce

income divergence and as a result translate into deeper economic integration efforts by

members. The evidence of income divergence across and within the three trade blocs‟

countries is an interesting finding as it creates new challenges including political tension in

the process of pursuing deeper integration in the region.



4.0 References

Boodeo Nem & Takesk Luckhoo (2011). Predicting the impact of a Euro-Zone crisis on

Mauritius – A panel Gravity Model.

Boopen Seetanah & Sawkut Rojid (2011). The determinants of FDI in Mauritius: a dynamic

time series investigation.

Krishna Chikhuri (2013). Impact of alternative agricultural trade liberalization strategies on

food security in the Sub-Saharan Africa region.

Martina Metzger (2008). Regional Cooperation and Integration in Sub-Saharan Africa No.

189.

Njoroge Lucas Kamau (2010). The impact of regional integration on economic growth:

empirical evidence from COMESA, EAC and SADC trade blocs.

Rojid Sawkut, SannasseeVinesh, Seetanah Boopen & Fowdar Suraj (2008). Regional Trade

Integrations: A comparative study, Part C (COMESA).

H

http://www.mcci.org/trade_agreements_comesa.aspx

Pal, P. 2004. “Regional Trade Agreements in a Multilateral Trade Regime: An Overview”.

Available at http://www.networkideas.org/feathm/may2004/survey_paper_RTA.pdf

Proliferation of regional trade agreements — Implications for multilateralregime Mitali Das Gupta Parthapratim Pal

http://www.thehindubusinessline.in/bline/2003/01/28/stories/2003012800030800.htm

Das, Dilip. "Regional Trading Agreements and the Global Economy: An Asia-Pacific Perspective." Asian

Development Bank, March 2001.

http://www.lexpress.mu/services/archivenews-47472-deux-bateaux-sri-lankais-arraisonnes-pour-peche-illegale-dans-les-eaux-mauriciennes.html

Deux bateaux sri-lankais arraisonnés pour pêche illégale dans les eaux mauriciennes


http://www.networkideas.org/feathm/may2004/survey_paper_RTA.pdf







http://www.networkideas.org/feathm/may2004/survey_paper_RTA.pdf




http://www.wto.org/english/tratop_e/region_e/regfac_e.htm

McCulloch, N, L., Alan, W, and Cirera, X. 2001. “Trade Liberalization and Poverty: A

handbook.” London: Centre for Economic Policy Research (CEPR) and United KingdomDepartment of International Development (DfID).

Yin, J. Z. and Lee, D. 2004, “Explosion of Trade Disputes”.Available at -http://pirate.shu.edu/~yinjason/papers

Enoch K. Beraho, (2007),"Colonial history and its effects on Sub-Saharan economic development", Cross

Cultural Management: An International Journal, Vol. 14 Iss: 3 pp. 254 - 266

PanAfrica News Agency (New York) (2000b), „„Chronology of events leading to COMESA FTA (Lusaka, Zambia)‟‟, PanAfrica News Agency, 30 October.

Business Africa (2000), „„Market openings‟‟, Business Africa, January, Vol. 9 No. 2, p. 2.

Mauritius: Deepening and entrenching its reach in Africa August 2012 gilbert Gnany



using appropriate examples analyse the implications of the mauritian membership to comesa

Documents