Exploring the contours of a COMESA–EAC–SADC free trade agreement

Abstract

This paper maps the economic, legal, and political contours of a potential tripartite Free Trade Agreement (FTA) that would merge the 21-member Common Market for Eastern and Southern Africa (COMESA), the 7-member East African Community (EAC), and the 16-member Southern African Development Community (SADC). Using an approach that combines computable general equilibrium (CGE) modelling, legal-textual analysis of existing protocols, and elite-level stakeholder interviews, we estimate that full liberalisation of goods, services, and factor markets could raise intra-African trade by 28–35% and add 1.2–1.8% to regional GDP within ten years.

Asymmetric gains and adjustment costs:

However, gains are asymmetric: coastal economies with large manufacturing bases (Kenya, South Africa) would expand output by up to 5%, while several landlocked least-developed members face adjustment costs exceeding 2% of GDP unless flanked by robust rules of origin, trade-facilitation, and compensation mechanisms.

Transaction costs from overlapping memberships:

We find that overlapping memberships already create an average tariff preference erosion of 6 percentage points and 134 conflicting rules of origin, implying transaction costs of roughly US$420 million annually. A consolidated Tripartite FTA could eliminate these distortions, but only if it adopts a common external tariff architecture, harmonises sanitary-phytosanitary standards, and introduces a single digital certificate of origin.

Political-economy cleavages:

Political-economy simulations reveal that coalition formation follows a North–South cleavage: resource-rich SADC states demand flexibilities for sensitive products, while EAC pushes for deeper services liberalisation.

Phased integration blueprint:

To overcome deadlock, we propose a phased integration blueprint:

Phase I (2026–2030): Consolidate tariff schedules;

Phase II (2031–2035): Negotiate services, investment, and competition;

Phase III (2036–2040): Establish a continental customs union.

Conclusion and policy recommendations:

The paper concludes with a risk matrix that weights implementation scenarios against AfCFTA convergence timelines and offers policy recommendations for sequencing, dispute settlement, and adjustment financing.

IPRAA WORKING PAPER 90

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