Online Reporter
Prosper Ndlovu
THE Common Market for Eastern and Southern Africa (COMESA) Secretariat says eight of its member states could encounter trade challenges in the wake of the new reciprocal tariffs instituted by the Donald Trump-led United States government.
The affected countries include the Democratic Republic of Congo: 11 percent, Libya: 31 percent, Madagascar: 47 percent, Malawi: 17 percent, Mauritius: 40 percent, Tunisia: 28 percent, Zambia: 17 percent and Zimbabwe: 18 percent.
This could lead to reductions in trade volumes for the concerned countries this year, warned COMESA in a latest update on Tuesday.
In its recent policy brief titled “Implications of the US Tariff on COMESA: A Game Theoretic Approach to Trade Negotiations” compiled by the Division of Trade and Customs at the COMESA Secretariat, the 21-member bloc said while the US is not a primary trading partner for the COMESA region, its increased tariffs are poised to create major supply and demand shocks across member states.
The resulting high production costs and consumer prices in the US would likely contract its economy and further depress demand for exports from COMESA countries.
Key exports from COMESA, such as Kenyan textile products and Zambian copper, will face inflated prices in the US market, while the prices of essential capital goods from the US are set to spike.
Citing official trade statistics, COMESA said its share of exports and imports to the US ranged from three to four percent and four to five percent during the years 2019 to 2023.
COMESA’s director of trade and customs, Dr Christopher Onyango, noted that the US-Africa trade framework has historically been defined by the African Growth and Opportunity Act (AGOA) enacted in 2000.
This act granted preferential access at zero tariffs for numerous products from qualifying African countries to the US market, reflecting their relatively lower socio-economic development levels.
“The new tariffs posed by the US represent a stark departure from AGOA’s intent, which was originally advocated by the US government itself,” said COMESA.
“The uncertainty around AGOA raises concerns that these tariff policies may result in substantial production cuts and massive job losses across African economies.
At the moment, 35 African nations qualify for AGOA, including 10 COMESA member states — Comoros, the DRC, Djibouti, Eswatini, Kenya, Madagascar, Malawi, Mauritius, Rwanda and Zambia.
Moreover, COMESA has said there is heightened apprehension regarding potential retaliatory measures from major trade partners like China and the European Union.
These entities, which represent COMESA’s largest export and import markets — accounting for 24 percent to 40 percent and nine percent to 13 percent of trade respectively during the period from 2019 to 2023 — could exacerbate the challenges facing COMESA countries, said the bloc.
Online Reporter