Report and Decisions: Fifteenth Meeting of the COMESA Council

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Report and Decisions: Fifteenth Meeting of the COMESA Council of Ministers, 13th -15th March 2003, Friendship Hall, Khartoum, Sudan

A. INTRODUCTION

1. The Fifteenth Meeting of the Council of Ministers was held from 13th -15th March 2003 at the Friendship Hall, Khartoum Sudan.

B. ATTENDANCE, OPENING OF THE MEETING, ADOPTION OF THE AGENDA AND ORGANISATION OF WORK

Attendance

2. The meeting was attended by delegates from Burundi, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Namibia, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Union des Comores, Zambia and Zimbabwe. The People's Bureau of the Great People's Arab Libyan Socialist Jamahiriya attended as an observer. The meeting was also attended by the following COMESA institutions: the COMESA Clearing House, the COMESA Court of Justice, the Eastern and Southern African Trade and Development Bank (PTA Bank), Federation of Women in COMESA (FEMCOM), PTA Re-Insurance Company (ZEP-RE); and the Leather and Leather Products Institute (LLPI). The following co-operating institutions and regional organisations also attended: the African Development Bank (AfDB), the African Trade Insurance Agency (ATI), African Union (AU), the Arab Bank for Development of Africa (BADEA), African Regional Standards Organisation (ARSO), the East African Community (EAC), the European Commission (EC), Intergovernmental Authority on Development (IGAD), Southern Africa Development Community (SADC), Joint United Nations Programme on HIV/AIDS-Intercountry Team for Eastern and Southern Africa (UNAIDS/ICT/ESA), the United Nations Economic Commission for Africa (UNECA), United Nations African Institute for Economic Development and Planning (IDEP), International Civil Aviation Organisation (ICAO), the United States of America Agency for International Development/Regional Economic Development Services Office for East and Southern Africa (USAID/REDSO/ESA), and the World Meteorological Organisation (WMO). India was also represented. The list of participants is at Annex III.

Opening of the Meeting (Agenda item 1)

3. His Excellency Ali Osman Mohammed First Vice President of the Republic of the Sudan opened the meeting. On behalf of the Government and the people of The Sudan he warmly welcomed the delegates to Khartoum, Sudan and wished them a pleasant stay.

4. He noted that COMESA was a building block of the African Union and that the realisation of the African Economic Community objectives started with strengthening of the regional economic groupings. He informed the meeting that, as a regional organisation, COMESA needs to address the key issues of peace and stability, food security, investment, jobs, access to health and education and a safe environment to live in.

5. He noted that many countries in COMESA were facing food deficits arising out of drought and diseases, such as HIV/AIDS and malaria, continued to ravage the region. He, however, observed with satisfaction that a number of Member States previously afflicted by civil wars were moving towards peace. He applauded the development as it would release resources for productive activities.

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6. He reiterated the importance of good infrastructure in the region and He noted that movement and distribution of food could only be done if there was good transport network.

7. He noted that competition arising out of the liberalisation of the trading regime affected some industries in some Member States. He encouraged member States to use regulations on Safeguards and Trade remedies if they needed to protect local industries affected by competition. He offered the assistance of Sudan to those member States wishing to study Sudan's experience in development of industry.

8. Finally, he pointed out the importance of strengthening cooperation with all partners. He assured the co-operating partners of COMESA's resolve to continue to implement the bilateral programmes in an efficient and transparent manner.

9. In his statement the Secretary General of COMESA, Mr. Erastus, J. O. Mwencha, MBS, welcomed all delegates and expressed his gratitude to the Guest of Honour, His Excellency Ali Osman Mohammed, First Vice President of the Republic of The Sudan for gracing the opening session of the Council of Ministers Meeting. He paid tribute to the people of Sudan for their warm hospitality. He also welcomed the participation of cooperating partners and sister organisations.

10. Mr. Mwencha reminded the meeting that the theme for the Summit was “COMESA: Towards a Customs Union”. He stated that Article 45 of the Treaty provided for the establishment of a Customs Union, ten years from the entry into force of the COMESA. The meeting observed that based on the Treaty provisions, the Customs Union should be launched in December 2004.

11. The Secretary General gave an account of how the FTA had performed since it was launched. He stated that the FTA has resulted in new product categories being traded amongst the countries. He welcomed this development especially because it showed that the FTA was working.

12. Mr Mwencha requested member States to comply with the deadline set by the Authority for indicating their time frames for joining the FTA. In this vein, he commended Rwanda and Burundi for giving a concrete indication of their time frame of joining the FTA. He requested non-FTA member States to share their concerns with the Council so that the Bureau could undertake further consultations.

13. On the Customs Union, Mr. Mwencha stated that the Secretariat would continue to provide technical support to member States through their National working groups. He reported that work on the Customs Tariff Nomenclature had been completed and the draft harmonised customs legislation had been prepared and would be considered by the technical committees.

14. He appealed to member States to continue working together, so as to achieve the goal of establishing a Customs Union by the target date, which would send a powerful signal to investors that COMESA had embraced deeper regional integration.

15. On the food situation, Mr. Mwencha noted that, despite the food deficit in some parts of COMESA, countries like Kenya, Rwanda and Uganda had expanded their cereal production. He stated that Uganda hoped to export up to 100,000 tones of maize in 2003. To improve the information flow, he reported that the Secretariat in collaboration with the Common Fund for Commodities initiated a study on the feasibility, viability, and logistical and institutional support required to establish a Regional Agricultural Commodity Exchange in the COMESA region.

16. Mr. Mwencha observed that co-operation with European Union continued to grow. Under the 9th European Development Fund an Inter Regional Co-ordinating Committee (IRCC) had been established comprising COMESA, EAC, IGAD, IOC and SADC. COMESA holds its rotating

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Presidency for 2003 whilst the COMESA Secretariat would permanently host its Secretariat. He also reported on the strong partnerships COMESA had with other bilateral and multilateral institutions.

17. On the forthcoming 5th Ministerial Meeting of the WTO to be held in Cancun, Mexico in September 2003, the Secretary General raised his concerns regarding the progress in implementing the Doha Development Agenda. He noted that no substantial progress has been made on issues of immediate priority to COMESA Member States. This included the implementation of the Declaration on TRIPS and Public Health, which remained outstanding, and agreement on special and differential treatment for developing countries. A combination of increasing domestic subsidies and prohibitive tariffs in agriculture by OECD countries meant market access to this sector remained closed to developing countries' products.

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18. Finally, he called upon the Council to be proud of the progress COMESA was making in the regional integration process and noted that the challenges ahead were many. He further called upon member States to consolidate the resources that each country individually posses and together the countries could form a formidable resource. He noted that a high standard of living would only be secured if regional integration was strengthened. He then expressed his gratitude to delegates for attending this meeting.

Vote of thanks

19. His Excellency, Mr. Saleban Omar Oudine, Minister of Trade and Industry of Djibouti moved a vote of thanks. On behalf of all the delegates, he thanked His Excellency Ali Osman Mohammed, First Vice President of the Republic of the Sudan, for gracing the occasion and officially opening this Fifteenth Meeting of Council of Ministers. He thanked the people of the Sudan for the brotherly hospitality extended to all the delegates.

20. He noted that COMESA was consolidating regional integration and that the region faced many challenges. He further noted that the Free Trade Area was a necessary tool to attain benefits in regional integration. He acknowledged the fact that the journey was long and COMESA should strengthen instruments of integration. He expressed gratitude for First Vice President's wise counsel and guidance and assured the Vice President that the Council would pay particular attention to the issues he raised in his address.

21. Finally, he expressed the delegates' appreciation to the Secretary General and the Secretariat for the high quality of the papers that have been presented before Council.

Election of the Bureau (Agenda item 2)

22. The following Bureau was elected:

Chairman - Sudan

Vice-Chairman - Uganda

Rapporteur - Ethiopia

Adoption of the Agenda and Organisation of Work (Agenda item 3)

23. The Council adopted the following agenda:

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1. Opening of the meeting

2. Election of the Bureau

3. Adoption of the Agenda and Organisation of Work

4. Report of the Chairman of Council

5. Report of the Secretary General

6. Report of the Fourth Meeting of the Ministers of Transport and Communications

7. Report of the Seventh Meeting of the Ministers of Justice and Attorneys-General

8. Report of the First Meeting of the Ministers of Industry

9. Report of the Fifteenth Meeting of the Intergovernmental Committee:

i. Trade Liberalisation

ii. Customs Co-operation

iii. Monetary

iv. Agriculture

v. Economic and Social Development

10. Report by COMESA Institutions

i. Report of COMESA Court of Justice

ii. Other COMESA Institutions

12. Brief by Cooperating Partners

13. Report of the Bureau of the Council of Ministers (Closed Session)

14. Report of the Fifteenth Meeting of the Intergovernmental Committee on Administrative and Budgetary Matters (Closed Session)

15. Any other Business

16. Adoption of the Report and closure of the meeting

24. The meeting adopted the following working hours:

Morning : 0930 - 1200 hours

Afternoon : 1400 - 2000 hours

C. ACCOUNT OF PROCEEDINGS

Report of the Chairman of Council (Agenda item 4)

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25. The Chairperson of Council, Her Excellency Dr. Mulu Ketsela, State Minister, Ministry of Finance and Economic Development of Ethiopia, presented a report which focused on the strengthening of relations and cooperation with development partners and covered the four months since the last meeting of Council.

26. The Chairperson recalled the November 2002 meeting of European Commission Trade Commissioner Pascal Lamy and the Council which discussed the status of Economic Partnership Agreement (EPA) negotiations; the WTO Doha Development round and the Eastern and Southern Africa Regional Indicative Programme. She proposed that Council should explore the possibility of instituting formal dialogue with the European Commission on development and trade issues.

27. The Chairperson further reported that, following the mission by the Bureau to Washington in September, 2002 the United States Administration has responded favourably to the request of COMESA regarding Pest Risk Assessment. Council was advised that the Second United States - Africa Trade Forum (AGOA Forum) was successfully held in Mauritius from 13 - 17 January, 2003 and that at the Forum President George Bush announced that he will be requesting the US Congress to extend AGOA beyond 2008 to encourage business to invest in Africa. Council was also informed that at the same AGOA Forum the US Trade Representative Ambassador Zoellick committed the US Administration on a number of other issues.

28. Council was invited to prepare for the 2nd COMESA-US Trade and Investment Framework Agreement (TIFA) and the CCA Summit that will take place in June 2003 in Washington DC and place high priority on the extension of AGOA beyond 2008 and the negotiations with the Government of USA to make AGOA a contractual arrangement.

29. The Chairperson also informed Council on the MOUs between COMESA and France and India. Council noted the need for putting in place a mechanism for operationalising the MOUs.

Report of the Secretary General (Agenda item 5)

30. Council noted the Secretary General's report to the Authority on the State of Integration which traces the progression of the COMESA integration, starting with the Preferential Trade Area in 1984, the attainment of the Free Trade Area in 2000, the Customs Union scheduled to be established in 2004, the Common Market in 2015 and the Economic Community in 2025, with a single currency issued by a common Central Bank, and harmonised economic policy. The report also covers the relationship of COMESA and other regional economic communities (RECs) to the African Economic Community and the role it is expected to play to prepare the countries of the region to compete in the international market place and participate effectively in the global economy.

STRATEGIC FOCUS: TRANSPORT AND COMMUNICATIONS

Report of the Fourth Meeting of the Ministers of Transport and Communications (Agenda Item 6)

31. The Chairman of the fourth Meeting of the Ministers of Transport, Communications and Public Works, His Excellency Mr. Phillippos W/Mariam, State Minister, Ministry of Infrastructure of Ethiopia, presented the report of the meeting held in Lusaka, Zambia on the 10th February 2003, document No. COM/INFRA//TC/M/IV/4.

A. CIVIL AVIATION

(a) Liberalization of Air Transport

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32. Council noted that a good number of member States had already liberalised air transport services. Council further noted that weekly frequencies between city pairs had increased considerably as a result of the implementation of Legal Notice No. 2 of 1999. However there had been decreases in frequencies on some sectors due to market rationalisation and increased airline co-operation through alliances, code sharing and franchising.

33. Council noted the appreciation expressed by the airlines through IATA and AFRAA regarding the progress made by COMESA in implementing Air Transport Liberalisation under the Yamoussoukro Decision. The airlines also urged COMESA to take the lead in harmonising the implementation of Air Transport Liberalisation with other Regional Economic Communities in order to improve air transport services between COMESA and other regions such as ECOWAS, CEMAC etc.

34. Council also noted that African States, at a preparatory seminar organised by AFCAC and ICAO held in Arusha, Tanzania in November 2002, agreed to adopt a common position at the forthcoming ICAO 5th Worldwide Air Transport Conference.

Decisions

35. Council adopted the following decisions:

a. Member States are urged to attend the forthcoming ICAO 5th Worldwide Air Transport Conference and participate in the AFCAC meeting prior to the conference in order to agree on a Common African position; and

b. COMESA, in consultation with EAC and SADC should coordinate and arrange a meeting in Montreal, Canada between member States attending the Conference prior to the African meeting and agree on a common position.

(b) COMESA Air Transport Competition Regulations

36. Council noted the progress made in drafting of the Air Transport Competition Rules through a consultative process involving all stake holders and that a joint meeting of COMESA, EAC and SADC Ministers responsible for civil aviation held in Pretoria, South Africa, adopted the Draft Competition Regulations. Council further noted that the SADC Legal Sector organs had adopted the regulations with some minor adjustments, and it was now expected that COMESA and EAC would meet to align and harmonise the two texts so that the three organisations would adopt a common text.

37. Council also noted the need to address market access issues e.g. subsidies, ownership and control of aircraft, complaints and dispute resolution mechanism, application of safeguard measures, guidelines on the implementing provisions, etc. Council further noted that the consultative process and meetings between COMESA and EAC would include member States and stake holders in order to ensure that all outstanding issues were addressed.

(c) CNS/ATM Implementation

38. Council noted the progress made by the working group and the constraints it faced since its establishment. Council also noted that ICAO, in conjunction with AFCAC, IATA and AFRAA, had carried out extensive work in the field of Communications, Navigation, Surveillance/Air Traffic

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Management (CNS/ATM) and that there was to be a regional conference at the ICAO East and Southern Africa Office in Nairobi in April 2003 to discuss both air transport liberalisation and CNS/ATM to which the COMESA Secretariat was invited.

39. Council further noted with gratitude the offer by Madagascar to develop a technical proposal for regional cooperation in the implementation of CNS/ATM Systems and Aircraft Operations and to convene, in consultation with the COMESA Secretariat, a meeting of experts in Antananarivo, Madagascar to discuss the proposal.

Decision

40. Council adopted the following decisions:

a. The Secretariat should seek additional funds to enable the Working Group continue with its work; and

b. The Working Group should participate in the regional ICAO Conference, which will deal with CNS/ATM matters among others.

(d) War Risk Insurance Scheme for Airlines

41. Council noted that in the aftermath of September 11, Insurance Underwriters have stopped giving Third Party War Risk Insurance coverage to airlines. In association with all stakeholders airlines urged ICAO to propose a worldwide insurance scheme affordable to developing countries' airlines.

42. More specifically, this global scheme should be offered at an affordable price and should provide coverage which meets regulatory requirements, and, save certain exceptions, should be cancellable. It should also offer safeguards against potential future disruption of air transport services and foresees adequate oversight over the insurance entity.

B. ROAD TRANSPORT

(a) Road Transport Facilitation Instruments

43. Council noted the status of implementation of the COMESA road transport facilitation instruments. On the issue of implementing some of the instruments regarding overload, the meeting noted that, although countries had instituted national overload check processes, some of these had not been translated into the COMESA Overload Control Certificate Programme.

44. Council noted that at its meeting held in Lusaka in January 1993 it had adopted a model certificate for axle load control and urged member states to adopt it for application in axle load control. Council further noted that, due to lack of national implementation programmes, the Axle Load Certificate was not operationalised.

45. Council also noted that GTZ (German Technical Co-operation Agency) was funding a survey on Axle Load Control in Sub-Saharan Africa, including COMESA, EAC and SADC, and that the survey would assist in defining modalities for implementation in the entire region. Axle load control is one of the projects being considered by the COMESA/SADC Task Force.

Decisions

46. Council urged:

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a. member States to adopt the Axle Load Certificate and to make it operational in the region;

b. the Secretariat to facilitate implementation through consultations with EAC and SADC, member States, private sector and other stakeholders in order to establish a harmonised system for implementation and to arrange for national workshops to build capacity to implement the road transport facilitation instruments; and

c. member States to provide information on axle load control through the questionnaire sent out by the Consultant on Overload Control.

(b) Road Infrastructure Management

Decision

The Council at its 12th Meeting in Lusaka in 2001 urged member States to adopt appropriate approaches in order to establish and sustain a proper road network in the region

47. Council noted that some member States had established autonomous road boards and road funds and that other countries had also started setting up road infrastructure databases to assist in the management of maintenance, enforcement of axle load limits and monitoring of road safety among other issues.

Decision

48. Council urged Member States who had not established road boards and road funds to do so where appropriate.

C. RAILWAYS AND RAIL TRANSPORT

49. Council noted the status of commercialisation of railway systems in the sub-region. Council further noted that a feasibility study would be carried out on the Great Lakes Railway and that participating countries (i.e. Burundi, D.R. Congo, Kenya, Malawi, Rwanda, Sudan, Uganda and Zambia) would be included in the feasibility study.

Decisions

50. Council urged:

a. that for connected rail networks (e.g. East Africa) concessioning where should possible be undertaken as a single unit in order to provide seamless services; and

b. the Secretariat to source funding to undertake a detailed feasibility study for the Great Lakes Railway Project.

D. MARITIME AND INLAND WATER TRANSPORT

(a) Ports

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51. Council noted that some ports in the sub-region had already concessioned some core activities such as container handling, grain and other bulk handling operations, whilst other ports were undertaking studies to implement commercialisation.

52. Council also noted that there were ongoing projects by the Port Management Association of Eastern and Southern Africa (PMAESA) to establish and benchmark performance indicators and other information, which PMAESA was prepared to share with COMESA.

Decision

53. Council urged COMESA and PMAESA, in consultation with other RECs, to co-operate in establishing performance indicators and other information for region-wide utilisation by all stakeholders.

(b) Shipping

54. Council noted that there were countries in the region owning shipping lines but whose ships do not trade significantly in the region. This resulted in costly shipping services in the region that were being provided by foreign shipping lines.

Decision

55. Council requested the Secretariat to bring together shipping lines from the sub-region and facilitate their collaboration in order to improve their services provided in the region.

(c) Inland Water Transport

56. Council noted that the process of preparing safety regulations and implementing them in the inland water transport was ongoing in collaboration with EAC, SADC and IMO along the lines recommended at the Mwanza Workshop. In East Africa work had advanced in the enhancement of safety through a project charting Lake Victoria to produce up-to-date hydrographic maps and also to provide navigation aids.

Decision

57. Council urged the Secretariat to explore ways of extending the activities being undertaken on Lake Victoria to other inland watermasses such as Lake Malawi/Nyasa, Lake Tanganyika, Lake Edward, Lake Mweru, Lake Kivu, Lake Albert and the Congo and Nile rivers.

E. INTERMODAL TRANSPORT FACILITATION

(a) Regional Transport Tracking System

58. Council noted that funding for a new regional transport tracking system project would be sought. Council also noted the initiative being undertaken by ECA, PMAESA and TTCA for the East African region to provide a transport tracking system from the ports of Dar-es-Salaam and Mombasa to the interior.

Decision

59. Council urged:

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a. the COMESA Secretariat to harmonise the Joint ECA, PMAESA, TTCA initiative with the COMESA project to avoid duplication of efforts; and

b. COMESA to continue with their efforts to source funding for the proposed regional transport tracking system Project.

(b) Study on Transport Costs in Southern Africa

60. Council noted the recommendations of the Study conducted through an Inter-Agency Co-ordinating Committee comprising COMESA, ECA, EAC, IGAD, SADC and TTCA together with other stakeholders providing services or undertaking regulatory functions in the transport sector on the Southern Africa Transport Network. The meeting further noted the need for stakeholder awareness in order to lower the costs of transport. The meeting also noted that this could be achieved through establishment of networks, which would provide for interactions, where the stakeholders could set performance indicators and monitoring mechanisms.

Decisions

61. Council decided that:

a. appropriate instruments to implement the proposals of the Study be set up on the various transport corridors in the subregion;

b. there should be continuous monitoring of performance in the various corridors through an active method of reporting preferably through the use of Websites, as recommended by the study on the Southern Africa Transport network; and

c. the Secretariat should examine all the previous studies on transport facilitation instruments and develop a consolidated Action Plan.

F. COMMUNICATIONS

(a) The COMTEL Project

62. Council noted the status of the COMTEL Project and the phasing proposed by the eighth meeting of the COMTEL Steering Committee.

63. Council took note of the current efforts by the Secretariat to attract potential investors and that negotiations were underway with two potential investors.

Decisions


a. National Telecommunications Operators should be encouraged to commence remitting the COMTEL initial share subscription as per agreed payment schedule and for those who have not yet signed the Shareholders Agreement to do so;

b. Efforts to secure potential investors should continue whilst also exploring possibilities for local COMESA private sector participation; and

c. The implementation of the COMTEL Project should be speeded up.

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(b) Harmonisation of ICT Policy and Regulatory Framework

65. Council noted that the study carried out in Phase I was the basis for the implementation of Phase II of the Regulatory Harmonisation Project. Phase II focuses on providing solutions for improving and harmonising the telecommunications regulatory environment of the Member States. The meeting also noted that in recognition of the evolving convergence of technologies the scope of the Project had been widened to embrace all Information and Communications Technologies and services (ICTs) including postal services.

66. The main outputs from Phase II would include development of legislation and guidelines; establishment of an association and capacity building programmes.

67. Council noted that the ICT Policy provides a broad and comprehensive coverage of institutional and policy issues including vision and goals for the sub-region.

68. Council also noted that the Model Bill captures and elaborates the policies and principles articulated in the ICT Policy. The purpose of the Model Bill is to facilitate the integration of the principles and strategies in the ICT Policy into legislation in the Member States in a harmonious manner.

69. Council further noted the establishment of the Association of Regulators of Information and Communications (ARICEA) which was launched in Addis Ababa on 24th January 2003.

70. On national implementation, Council noted that Member States would integrate the ICT Policy and Guidelines in national policy and regulatory framework once these instruments have been adopted at regional level.

Decisions

71. Council decided as follows:

a. Member States adopt the Policy together with the accompanying Model Bill as guidelines for harmonising institutions, policy and regulations in the region;

b. Member States implement the strategies set out in the ICT Policy document within a period of five (5) years from the date on which Council of Ministers approves it; and

c. Member States should provide support to the Association of Regulators of Information and Communications for Eastern and Southern Africa (ARICEA).

(c) Postal Services

72. Council noted that on postal services, there was no forum for service providers to interact and discuss issues of common interest in order to improve their industries. Council recognised the need to provide such a forum, given the importance of postal services in the delivery of mail and other services.

Decision

73. Council urged Secretariat to create a forum for postal services providers to facilitate the establishment of a programme of cooperation in the Sector.

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G. DEVELOPMENT OF PHYSICAL INFRASTRUCTURE

Priority Projects for Implementation under NEPAD

74. Council noted that the projects contained in the priority list were submitted to the Secretariat by member States and the list needed updating regularly. However, not all member States provide their updates on the status of implementation.

75. Council further noted that the NEPAD Secretariat through the ADB organised a Workshop in Abidjan, C?d'Ivoire for Regional Economic Communities (RECs) to discuss regional projects in infrastructure covering transport, communications, energy and water. Following this meeting ADB has prepared a short-term Action Plan and is now working on a medium to Long Term Action Plan.

76. Council also noted that the COMESA Infrastructure Investment Plan would be based on the NEPAD Framework and in preparing projects for submission, Member States would need to give priority to projects that improved regional inter-connectivity. The meeting noted that the primary criterion for selection was for the enhancement of regional interconnectivity in physical infrastructure, facilitation and capacity building.

Decision

77. Council urged member States to submit their current priority projects to Secretariat as soon as possible.

H. METEOROLOGY

78. Council noted that the programme to launch METEOSTAT Second Generation Satellites (MSG) commenced in 2002. The project would enable some national meteorological and hydrological services in Africa to replace ground receiving equipment so as to achieve compatibility with the new generation satellites. The meeting further noted that five economic groupings in Africa are co-ordinating the project which is funded by the EU and will cover 47 countries. The project is co-ordinated at the Kenya Meteorological Department and the Director has also been designated as the Regional Authorising Officer for the project.

79. On the COMESA Strategic Meteorological Programme Council noted that the constituted Working Group had not yet met to prepare the Draft Strategic COMESA Meteorological Programme.

Decision

80. Council agreed on the need for the COMESA Secretariat to convene the Working Group Meeting as soon as possible to prepare the Draft Strategic COMESA Meteorological Programme.

STRATEGIC FOCUS: LEGAL AND INSTITUTIONAL MATTERS

Report of the Seventh Meeting of the Ministers of Justice and Attorneys-General (Agenda Item 7)

81. A presentation was made of the report of the Seventh Meeting of the Ministers of Justice and Attorneys-General contained in document No. COM/MJAG/VII/4.

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(a) Amendment of the COMESA Treaty

Decisions

The Seventh Summit of the COMESA Authority held in Addis Ababa, Ethiopia in May 2002 decided that:

"(a) the process for consideration of the proposed amendment of the Treaty proceed according to the Treaty provisions. The proposed amendment of the Treaty should take account of the need to introduce an Appellate System; and

(b) the process for filling-in the posts of the Judges of the Court when the term of the current serving Judges comes to an end in June 2003 be deferred until the proposed amendment of the Treaty is considered by the member States.”

82. Council noted that the Seventh Meeting of the Ministers of Justice and Attorneys-General considered different options on how to amend the COMESA Treaty to introduce an appellate system. Council also noted that the meeting of the Ministers of Justice and Attorneys General agreed on one of the three options.

Decisions

83. The Council endorsed the decisions of the Seventh Meeting of the Ministers of Justice and Attorneys-General and decided as follows:

a. Option C on the structure be adopted - the Court should remain as one Court of Justice with two divisions. The two divisions would be - a First Instance Division and an Appellate Division. The functions of the two divisions should be distinct;

b. The composition of the Court should be increased from seven to twelve. Seven Judges should constitute the First Instance Division and five should constitute the Appellate Division;

c. The proposed draft amendment of the Treaty be revised taking account of the following:

i. clarify the definition of the term “Court” throughout Chapter Five of the Treaty having regard to the functions of each Division;

(ii) define a more precise distinction of the functions of the two Divisions (First Instance and Appellate) as well as whether they would be “Divisions” or “levels”;

(iii) include a recommendation on the presiding Judges in each Division;

(iv) review of the proposed amendment of Article 38 on the Rules of Court regarding the role of the Court as well as the possibility for involvement of the Ministers of Justice and Attorneys-General in the process of making the Rules of Court;

(v) Specific criteria should be made in the electoral process to determine the seniority of Judges. The selection of the Judges and their appointment into either Division should be based on the specific criteria for seniority adopted by the Ministers of Justice and Attorneys-General;

(vi) Detailed procedural provisions on appeals should be contained in the Rules of the Court and not in the Treaty; and

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(vii) A transitional provision be included in the amendment to ensure that the right of appeal would only commence after the amendment of the Treaty comes into force;

(d) the revised amendment to the Treaty be circulated to all the Member States, requesting them to submit comments within ninety days after circulation of the draft; and

(e) in preparation of the revised draft the Secretariat should consult as widely as possible.

(b) Host State for the Court of Justice

Decision

84. The Council endorsed the following decisions of the Seventh Meeting of the Ministers of Justice and Attorneys-General regarding the process of determining a host State for the Court of Justice:

a. a task force composed of the Bureau of the Ministers of Justice and Attorneys-General (Zambia, Mauritius and Rwanda) and three additional States, (Egypt, Ethiopia and Uganda) be established to make a recommendation on one of the four Member States to host the Court. The composition of the task force accommodates the three legal systems of COMESA and the principle of geographical distribution; and

(b) the task force should carry out a study of the offers made by the four Member States; establish a grading criteria for determining the most suitable State to host the Court; and make a recommendation to the next meeting of the Ministers of Justice and Attorneys-General on the most suitable State to host the Court.

(c) COMESA Public Procurement Reform Project

Decision

Council in Kinshasa in June, 1998 (Document COM/CM/V/2 at paragraph 54) decided that the Secretariat embarks on a comprehensive Study on Procurement Rules and Practices of the Member States with a view to attain their harmonisation. The project has since been commenced with the support of the African Development Bank.

85. Council noted the objectives of the project on Public procurement. Council agreed that a consolidated approach to Public Procurement Reform would help to prevent unnecessary divergences between the procedures applicable to different types of procurement and to ensure that a single high standard of economy and efficiency, competition, transparency and fairness applies throughout the procurement system. Consolidation and harmonisation of the legal framework also renders procurement systems more user-friendly, both to the concerned public officials and to the private sector. Such consideration assumes added importance in the context of regional integration of procurement markets.

Decision

86. Council endorsed the decision of the Seventh Meeting of the Ministers of Justice and Attorneys-General that Public Procurement Reform in COMESA should best be attained through:

a. the adoption of modern national legislation on public procurement where it does not exist or the improvement of national legislation where it is outdated;

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b. the adoption of the principles and essential components of national legal frameworks as contained in Document No. COM/IC/XV/3(a) for supporting the project on public procurement reform in COMESA and enhancing regional integration;

c. the establishment of a technical committee on public procurement; and

d. the adoption of the institutional and organizational arrangements contained in document COM/IC/XV/3(a).

(d) Model Information and Communications Bill

87. Council noted that the Model Information and Communications Bill was based on regional and international best practices and on principles relating to the regulatory framework for the sector. A common policy will facilitate the harmonisation and development of the sector. The Model Bill should be used for those Member States that have not yet consolidated their legislation on Information and Communications or as reference for amending existing legislation that requires updating.

Decision

88. Council adopted the Model Information and Communications Bill issued in document COM/IC/XV/3(a) as a guideline for the enactment of legislation in Member States.

(e) Regional Competition Regulations

89. Council noted that the recent economic developments in the structure of industry in COMESA, particularly the emerging dominance in some sectors and industries of the regional economy by some corporations who are taking advantage of the liberalised environment warrant the conclusion of Regional Competition Regulations which are envisaged under Article 55 of the Treaty.

90. Council further noted that in terms of scope, the regional law (Regulations) would only deal with anti-competitive practices of a regional nature, emphasizing that any anti-competitive practices whose effects were confined to the boundaries of one country would be dealt with under national law.

Decision

91. Council decided that the Regional Competition Regulations as cleared by the Seventh Meeting of the Ministers of Justice and Attorneys-General be considered by the next meetings of the Trade and Customs Committee, Intergovernmental Committee, and Council of Ministers after review of any comments that may be received from the Member States.

Report of the First Meeting of the Ministers of Industry (Agenda Item 8)

92. The Honourable Minister of Trade and Industry of the Government of Kenya presented the report.

(a) Cooperation of COMESA and the Centre for the Development of Enterprises (CDE)

93. Council noted that CDE is managing a new EU private sector support programme called PROINVEST. Council further noted that following a COMESA/PROINVEST workshop held in Lusaka in February 2003 a number of areas were identified requiring PROINVEST support.

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(b) Programme of Co-operation with the Corporate Council on Africa (CCA)

Decision

Council at its 14th meeting held in Lusaka Zambia in 2002, noted the co-operation between COMESA and CCA, pursuant to article 153 (a) of the COMESA Treaty.

94. Council noted the collaboration between COMESA and Corporate Council on Africa. Council further noted that CCA staff seconded to COMESA for 6 months had provided guidance to African and US businesses in the COMESA region on the utilization of US Government-sponsored trade and investment resources. Council also noted that the Secretariat would continue to work with the CCA, particularly for the forthcoming CCA Trade and Investment Summit to be held in Washington DC, USA from 24th - 27th June 2003.

95. Finally, Council noted that Kenya had already confirmed its participation at the CCA Summit in June 2003.

Decisions


a. that Member States be urged to participate in the Corporate Council on Africa Summit to be held from 24th - 27th June 2003 in Washington DC, USA; and

b. That Member States initiate dialogue with USA Embassies in their countries as well as USAID Missions for financial support to participate in the CCA Summit.

(c) COMESA Annual Business Leader of the Year Awards

Decision

Council at its meeting held in Lusaka Zambia in 2000 decided that a Quality Award for business excellence be established for COMESA Companies.

97. Council noted that the Ministers of Industry had considered a proposal for awards of an Annual Business Leader of the Year which would be awarded to companies that have made outstanding contribution to regional and international business. Council also noted that the Ministers had reviewed the proposed objectives, the criteria, prizes to be awarded, categories of companies to be considered, countries that would be eligible to participate, composition of the panelists, fees for participation and the organisation of the awards at regional and national levels.

.

Decisions

98. Council approved the establishment of a COMESA Annual Business Leader of the Year Award and decided that:

a. the manufacturing and export of high value products should be included as a criteria to ensure that manufacturing of high value products is encouraged;

b. the criteria should include the growth in Intra-Africa trade to encourage intra-regional trade;

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c. the proposal should recognize non-indigenous companies, as they contribute to the growth in the region; and

d. the Secretariat should study other schemes to enrich the proposal.

(d) Country Reports

99. Council noted the Country reports presented by the Ministers of Industry highlighting the major developments in their respective countries. Council took note of the amendments to the Country reports as presented by Sudan and Ethiopia.

Decisions


a. that meetings of Ministers Industry should be held annually and the next meeting be held in 2004 in Khartoum, Sudan with the Bureau following up implementation of agreed programmes in the interim;

b. that COMESA should continuously address the issues of competitiveness of industry;

c. that COMESA should endeavour to achieve complementarity rather than duplicate industries;

d. that COMESA should address the issue of mobilisation of finance along with other constraints to industrial development like the transfer of technology, capacity building, etc.;

e. that in the development of standards, quality assurance and metrology, member States should share capacities by specialising in given areas (e.g. food) rather than each member trying to build their own capacity;

f. that appropriate mechanisms should be developed to support disadvantaged countries;

g. that COMESA should undertake a study on second-hand clothing and come up with appropriate strategies to support the clothing and textile industries; and

h. that the Secretariat should constitute a Working Group to visit countries such as the Sudan and Egypt to learn from the experiences of the two countries as offered by their delegations and identify support that can be offered to other member States.

(e) Co-operation with WIPO/ARIPO - Intellectual Property Rights

101. Council noted that the COMESA Treaty provides for investment protection, under Article 159. To this end COMESA had signed a Memorandum of Understanding (MOU) with the African Regional Industrial Property Organization (ARIPO) on March 2002.

102. Council further noted that COMESA and ARIPO agreed to co-operate in matters relating to intellectual property and in any other matters of mutual interest and benefit to the parties and their respective member States. COMESA has also had meetings with the World Intellectual Property Organization (WIPO), which outlined the broad areas of co-operation, with a view of signing an MOU at later stage. The other areas of co-operation were that the Secretariat would prepare and submit programmes/projects to WIPO for consideration and possible financing and/or co-financing, and that WIPO give preference to COMESA nominations in their training programmes, as a basis for building in-house capacity.

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Decisions

103. Council decided that the Memorandum of Understanding signed with ARIPO should be implemented and the Co-operation Agreement with WIPO should be concluded and areas of co-operation synchronized with those of ARIPO and implementing bodies in member States.

(f) Status of AGOA in COMESA

Decisions

Council in December 2000 (document COM/CM/X/2) in paragraph 153(i) decided that the “Secretariat should monitor the implementation of AGOA and open dialogue on areas of concern to COMESA member States and report back to Policy Organs.”

104. Council noted the key issues in AGOA and Decisions, from the second AGOA Forum, held in Mauritius from 13 - 17 January 2003.

105. In the discussions that ensued, Council noted that the Secretariat had among other recommendations, requested the US Government to consider elements that would make COMESA operate as one consolidated regional grouping. This included eligibility as well as some of the special provisions of AGOA.

106. The Secretariat was requested to facilitate the strengthening of capacity of member States, especially those that have not benefited from AGOA.

Decisions


a. AGOA should enhance regional integration in COMESA, hence the need for eligibility to be extended to all Member States;

b. the forthcoming CCA Summit should be inclusive of all Member States;

c. the US to be requested to include cotton, groundnuts and sugar as eligible for duty free treatment without reference to a Tariff Rate Quota (TRQ);

d. COMESA should request fast track approval (6-12 months) procedures for sanitary and phytosanitary (SPS) certification of agriculture exports and capacity to comply with the USA SPS regulations; and

e. negotiations should be undertaken with the US to make market access provision provided under AGOA, into a contractual arrangement.

(g) The COMESA Common Investment Area (COMESA Investment Framework Agreement)

108. Council recalled the Authority decision of June 1998 and May 1999 declaring COMESA a “Common Investment Area.”

109. Council noted that Chapter 26 of the COMESA Treaty is the basis of these decisions under Articles 158 to 162. Article 159 (3) provided for the need for member States to extend investment protection and guarantee. Article 161 and 162 provided for Double Taxation Arrangements and Multilateral Agreements respectively.

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110. Council further noted that the Ministers of Industry had reviewed the draft policy paper prepared by the Secretariat, which outlines some of the issues that could be incorporated into the Investment Framework Agreement for the COMESA Common Investment Area (CCIA). Council also noted that the draft Policy Paper would form the basis of national consultation before further consideration.

111. In the discussion that ensued, Member States raised a number of issues and Council noted that the Policy paper should take due recognition of the following:

a. the specificities of Member States in the Investment Framework Agreement;

b. the need to consult and work with UNCTAD to draw on their expertise and experience;

c. the need to have a phased approach in liberalising FDI to take into account special and differential treatment; and

d. the need to have a lean institutional set-up for the regional implementation mechanism of the Investment Framework Agreement.

Decisions


a. the CCIA draft Policy Paper be revised;

b. Member States should undertake wide consultations at National level to review the various issues raised in this paper;

c. the Secretariat should seek financial support for Member States to undertake the consultations;

d. Investment Promotion Agencies or relevant organisations should be designated to facilitate the consultations and the designated institution and contact person should be communicated to the Secretariat; and

e. a regional workshop should be held mid 2003 after all national consultations had been completed to review the various Decisions and determine the legal instrument for the CCIA.

(h) Investment and Competitiveness in COMESA

113. Council noted the report on the potential opportunities for investment and competitiveness. Council also noted that FDI flows into the region were very low and the most Transnational Corporations (TNCs) are headquartered outside the region.

Decisions


a. The Secretariat should pool resources under regional programmes and consult all member States prior to undertaking firm the competitiveness studies to ensure that needs of member States are taken into account and duplication is avoided;

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b. The Secretariat should assist in identifying Regional and International Transnational Corporations that could invest in the region in relation to the industries/sectors that member States are targeting; and

c. The Secretariat should facilitate the development of a private sector and investment promotion strategy for the region.

(i) Report on the Study of the Pharmaceutical Industry in COMESA

Decision

Council at its Fourteenth Meeting held in Lusaka Zambia, Noted that a study on `Enhancing production and trade in quality pharmaceutical products was undertaken and a workshop held from 22-23 October, 2002.

115. Council noted that the Secretariat with the support of the Commonwealth Secretariat (COMSEC), undertook a study on “Enhancing Production and Trade in locally Manufactured Quality Pharmaceutical Products within COMESA”. The study covered five selected countries, namely Kenya, Uganda, Swaziland, Zambia, and Zimbabwe. The study revealed a number of opportunities and aspects on commercial, regulatory environment, and manufacturing environment that are inhibiting development of the industry.

116. Council noted that the study found that the range of provisions in respect of legislation and regulations, National Drug Authorities, National Quality Control Laboratories and inspection was extremely varied ranging from minimal to comprehensive and emphasized the need for harmonisation of the regulatory environment within the region.

117. Council noted that some of these decisions only require policy change and very little or no financing to implement while others require private sector intervention.

Decisions

118. Council decided as follows regarding general issues in the development of the pharmaceutical industry in COMESA:

a. COMESA should facilitate joint ventures;

b. the region should initiate R & D activities for extraction of active ingredients from medicinal plants for use in the local pharmaceutical industry; and

c. the Secretariat should initiate a programme on mutual recognition in drug registration.

119. Council also decided as follows regarding policy issues in the development of the pharmaceutical industry in COMESA:

a. Member states that have ZERO rated import duty and charge no VAT on imported finished pharmaceutical products should reduce import duties to ZERO and remove VAT on inputs used in the manufacture of pharmaceutical products (raw materials excipients and packing materials); while those that charge duty and VAT on imported finished pharmaceutical products reduce duties and VAT to Zero or review the duties and taxes so as not to disadvantage the local pharmaceutical manufacturers;

b. Member States should harmonise their legislation, regulations and enforcement procedures relating to the pharmaceutical industry;

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c. Member States should improve the standard of facilities within national regulatory Authorities, to WHO recommended standards as a minimum;

d. COMESA should develop and adopt COMESA GMP guidelines for industries in COMESA and promote mutual recognition of products meeting these guidelines;

e. a COMESA pharmaceutical desk be established within the COMESA Secretariat; and

f. COMESA Secretariat should constitute a COMESA Regulatory Affairs Conference (CMRAC), a multi-disciplinary technical group, to provide advice on implementation of the pharmaceutical programme in the region.

120. Council further decided as follows regarding the involvement of the private sector in the development of the pharmaceutical industry in COMESA:

a. Member States should establish/strengthen national pharmaceutical associations;

b. Member States should strengthen the regional pharmaceutical association taking into consideration current developments;

c. the Secretariat should set-up an electronic marketplace, initially as part of the COMESA web-site, to allow individual companies to establish a presence in the regional; and

(d) the Secretariat should establish databases and a mechanism for regulatory authorities/manufacturers and other stakeholders to share the information.

(j) Regional Projects Identified for Funding

121. Council noted that COMESA had signed a Memorandum of Understanding (MOU) with US-AFRICA Trade and Aid Link Corporation (UATALCO) to collaborate with UATALCO to implement a light industry capacity building programme in the Eastern and Southern Africa region. The MOU was as a result of the new USA - Africa relationship through African Growth and Opportunities Act (AGOA).

122. Council also noted that UATALCO would establish a regional manufacturing and training centre in Kenya to address capacity constraints in the region. The Centre would act as a training ground for regional industry, as a showcase to attract capital from investors from the USA, and as a demonstration of the efficacy of modern manufacturing systems for African producers.

Decisions

123. Council endorsed the following decisions:

a. the promoters of the UATALCO project should be requested to work closely with LLPI and ESALIA on the footwear training component;

b. the promoters of the UATALCO project should be encouraged to create synergies with other textile as well as leather and leather products training centers in the region;

c. training under the UATALCO project should comply with regional standards and certification; and

d. UATALCO project should be adopted subject to the incorporation of the above decisions.

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Report of the Fifteenth Meeting of the Intergovernmental Committee (Agenda item 9)

124. The Chairman of the Intergovernmental Committee presented the report of the Committee and Council discussed the report as follows:

STRATEGIC FOCUS: TRADE LIBERALISATION

(a) Operations of the Free Trade Area

Decision

The Seventh Summit of the COMESA Authority of Heads of State and Government urged all member States to resolve any outstanding issues relating to the implementation of the Free Trade Area.

125. The Council noted that:

(a) Zambia had lifted the ban she had imposed on the fourteen categories of products affecting 22 tariff lines imported from Zimbabwe;

(b) Malawi had import licensing requirements for imports of poultry and dairy products and had no prohibition on imports of such products from Zambia;

(c) bilateral agreements among member States could either enhance or reduce the effects of the FTA; and

(d) the capacity building activities on the Rules of Origin and the on-line business directory being developed utilising Internet technologies would promote intra-COMESA trade.

126. Kenya submitted a request to extend the safeguard measures on sugar and wheat flour for a further 12 months. The Council noted that Kenya had taken safeguard measures in accordance with Article 61 of the COMESA Treaty, which allows Member States to apply safeguard measures for a period of 12 months, unless extended by the Council of Ministers.

127. The request for extension was based on the following three considerations:

a. the need to review the impact of Kenya's application of the safeguard measures for sugar and wheat flour and their suitability towards inducing the desired change;

b. the need to conduct a study that will highlight the specific areas that need to be addressed in order to enhance industry competitiveness and avoid resorting to application of safeguard measures; and

c. through the study, the development of master plans which will examine the social and technological aspects of the re-structuring.

128. Council noted that the COMESA Secretariat had responded positively to Kenya's request to finance the study and had proposed to undertake a study of the sugar industry covering the entire COMESA region. In this regard The Council urged Kenya to use the 12 month extension to undertake the necessary restructuring to improve the competitiveness of the sugar and wheat flour industries.

129. Council noted with appreciation Egypt's offer to assist Kenya in a programme of restructuring the sugar industry.

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Decisions

130. In order to support and consolidate the FTA, The Council made the following decisions:

a. the Secretariat should re-enforce capacity of member States in the implementation of the Rules of Origin and expedite implementation of the on line directory within the next six months to promote intra-COMESA trade;

b. Member States entering into bilateral agreement between themselves should deposit copies of the agreements to the Secretary General in accordance with Article 56 of the Treaty;

c. Kenya's request for an extension of the safeguard measures for sugar and wheat flour for another 12 months be granted; and

d. Kenya should resolve impediments associated with inspections and packaging requirements by the Standards body on sugar.

b. Time Frames by non-FTA member States for joining the Free Trade Area

Decision

The Seventh COMESA Authority held in May 2002, in Addis Ababa, Ethiopia agreed “on the need for all member States to join the COMESA Free Trade Area. It further urged all member States not yet in the FTA to submit before the end of 2002, their time frames and tariff reduction schedules for joining the FTA.”

131. The Council noted that Burundi and Rwanda would join the FTA in January 2004.

132. The following reports were received from member States, which had not yet joined the Free Trade Area:

Burundi

133. Confirmed that she had reduced tariffs from 60% to 80% in January 2003 and would reduce tariffs by 100% in January 2004 when the legal instrument promulgating the participation of Burundi in the Free Trade Area would be issued.

Union des Comores

134. The Council was informed that the Union des Comores was committed to joining the Free Trade Area.

Democratic Republic of Congo

135. The Democratic Republic of Congo reiterated her commitment to the FTA but her joining would depend on the magnitude of revenue losses and industry competitiveness owing to her peculiar situation. She was therefore exploring the possibility of using safeguard measures and benefiting from the COMESA Fund under its budgetary support window.

Eritrea

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136. Eritrea reported that she had reduced tariffs on COMESA originating goods by 80% in 1998 but had not been able to effect further reductions owing to various other factors, such as, barriers to free movement of goods and people that affected intra-COMESA trade.

Ethiopia

137. Ethiopia reported that she had reduced her maximum MFN tariff to 35% as part of her fiscal restructuring. The report of the study on the effects of the Free Trade Area on its economy had been submitted and was being reviewed by the evaluation committee. A timetable for joining the FTA would be given in due course.

Namibia

138. Namibia reported that the new SACU agreement was concluded at the end of 2002 and was awaiting ratification. Under Article 31 of the new Agreement, Namibia is under obligation to seek SACU concurrence for joining the Free Trade Area. In this regard, Namibia would pursue negotiations within SACU and may seek assistance from the Secretariat if and when required.

Swaziland

139. Swaziland reported that she had decided to join the FTA and that the concurrence of partner SACU States had been requested. Swaziland further informed the meeting that a tariff reduction schedule would be submitted to the Secretariat before the end of 2003 with a view to implementing the programme by April 2004 after receiving SACU concurrence. Swaziland requested an extension of the derogation to April 2004 to enable this process to be completed.

Rwanda

140. Rwanda reiterated her commitment to joining the FTA in January 2004 and in this regard advised that she had reduced her tariffs on COMESA goods by 90% in January 2003.

The Seychelles

141. The Council was informed that Seychelles had re-affirmed its commitment to join the Free Trade Area.

Uganda

142. Internal consultations were on-going and it was expected that the time frame for joining the FTA would be finalised in the next few months. Uganda expressed its commitment to joining the FTA.

143. Council underlined that the full benefits of the larger COMESA market were not being realised due to the limited FTA membership. This had resulted in undue pressure being exerted on the FTA members by stakeholders and slowed the COMESA integration arrangement. Accordingly, Council underscored the need to consolidate the FTA and increase its membership to provide a platform for the establishment of the COMESA Customs Union. Council urged the non-FTA Member States to give a clear indication of when they intend to join the FTA and requested the Secretariat to visit and consult with the countries affected. Council also commended Swaziland for its bold decision to join the FTA.

Decisions

144. Council made the following decisions:

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a. that the FTA be consolidated and its membership increased to realise the full benefits of the market integration arrangement and to pave the way for the establishment of the Customs Union;

b. all countries should honour their commitments regarding the FTA;

c. member States that are not yet in the Free Trade Area be urged to comply with the Council decision related to the FTA membership;

d. Namibia be urged to pursue negotiations with SACU to secure her participation in the FTA; and

e. the derogation for Namibia and Swaziland be further extended to April 2004.

(c) Framework for Trade in services

Decision

The Twelfth Meeting of Council decided that a framework strategy paper on trade in services be prepared. (Document No.COM/CM/XII in paragraph 167)

145. The Council underscored the need to expedite the development of a framework for trade in services and proposed that COMESA should collaborate with SADC and UNCTAD in this exercise.

Decisions

146. The Council made the following decisions:

a. that a Working Group comprising Egypt, Democratic Republic of Congo, Kenya, Malawi, Mauritius, Rwanda, Uganda, Zambia and Zimbabwe be established to spearhead the development of a regional Framework for Trade in Services, with participation open to other member States;

b. the Secretariat should develop the Terms of Reference for the Working Group, which should be circulated to all member States for comments before their first meeting which would take place before October 2003. The Working Group will meet three times in a year; and

c. that special meetings of the Trade and Customs Committee dedicated to trade in services among COMESA member States be convened.

(d) Guidelines on Trade Remedies

Decision

The Twelfth Meeting of Council directed the Working Group on Trade Remedies to develop Guidelines for the application of the COMESA Trade Remedy Regulations. (Document No. COM/CM/II at paragraph 148)

147. Council noted that the Guidelines, which outlined the procedures to be followed in the invocation of the COMESA Trade Remedy Regulations, were adopted by Council in December 2001.

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148. The Council observed that the Guidelines offered practical guidance on the invocation of the Trade Remedy Regulations, but further national consultations were necessary before consideration by the next meeting of Trade and Customs Committee.

Decisions

149. The Council decided that:

a. Member States should be given more time to undertake national consultations on the Guidelines on Trade Remedies; and

b. Member States should submit their comments to the Secretariat for consolidation before the next meeting of the Trade and Customs Committee.

(e) Rules of Origin

Decisions

1. Council decided in May 2001 (Document No. COM/CM/XI/3 at paragraph 73(d) that “the Working Group on Rules of Origin should consider the proposals of the WCO for the workings and processes leading to a change in tariff heading “

2. Fourteenth Council decided in November 2002 (Document No. COM/CM/XIV/3 at paragraph 112 that the Working Group should review the procedures for the re-exportation of originating goods taking into account re-exportation of whole and partial consignments where a new Certificate was not required.

3. Fourteenth Council had also decided at paragraph 121 of Document No. COM/CM/XIV/3 that a study be undertaken on the 25% value added origin-conferring criterion for goods of economic importance in COMESA

150. The Council noted that the following tasks had been accomplished:

i. Re-exportation of COMESA originating goods

151. Council noted that the IC had reviewed the procedure previously developed to take into consideration the re-exportation of whole and partial consignments when the issuance of a new Certificate would not be required.

152. Council further noted that the procedures were meant to prevent transhipment of third country goods and to build confidence in the COMESA trade regime.

153. The Council agreed that the Working Group should examine the issue of re-exportation of originating goods which had entered for home consumption.

Decisions

154. Council agreed on the need for Customs Administrations to cooperate on the basis of mutual trust in order to avoid any fraud.

155. Council further decided that the following procedures be adopted for the re-exportation of COMESA originating goods:

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a. Re-exportation of COMESA originating goods shall be allowed only when goods remain under customs control and do not undergo any operations except those meant to preserve the goods and unloading and reloading;

b. Where a whole or a partial consignment of the originating goods is meant for re-exportation from one importing COMESA member State to another COMESA member State, the re-exporter in the second COMESA exporting member State shall, make an application on the form shown in Annex I. After approval the exporter shall submit an export customs declaration together with the COMESA Certificate of Re-Exportation of Originating Goods as shown in Annex II. A photocopy of the original certificate of origin shall be attached to the Certificate of re-Exportation of Originating Goods;

c. If the Customs or Designated Authorities in the second COMESA exporting country are satisfied that the consignment being re-exported is originating from the exporting COMESA member State, the Certificate of Re-exportation of Originating Goods shall be accordingly approved and provided to the re-exporter. The Customs Authorities in the second importing country shall accept this Certificate of Re-exportation of Originating Goods with the appropriate entries from the second exporting country to grant COMESA preferential treatment;

d. The Customs Authority in the second importing country may in exceptional circumstances require, in case of doubt, further verification of the authenticity and accuracy of the statement contained in the certificate of re-exportation. Such request of verification should be made within three months from the date of issuance of the certificate of re exportation. The re-exporting country should forward the result of the verification to the second importing country as soon as possible but not later than twelve weeks from the date of the request being made; and

e. The original Certificate of Origin issued by the first exporting country and other relevant documentary evidence shall be preserved, by the appropriate authorities of the second exporting Member State for at least five years.

(ii) Study on the 25% value added origin for goods of particular importance

156. Council noted that the study undertaken by the Secretariat revealed that goods of particular economic importance were those goods that made a contribution to the economy of member States in terms of:

a. increasing production and expansion of intra-COMESA trade;

b. creation of employment from increased production and trade;

c. facilitation of production of other goods and the provisions of services in other member States;

d. service to rural communities; and

e. acquisition and enhancement of technological capability.

Decision

157. Council decided that there was need to undertake more work on the list of goods of economic importance requiring 25% local value added, taking into consideration the present duty levels in member States and trade volumes.

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(iii) Procedures for Retrospective Issue of the Certificate of Origin and Replacement Certificate of Origin

Decisions

158. Council noted that the Protocol did not provide for such procedures and recommended the following procedures:

(a) Procedures for the retrospective issue of the Certificate of Origin

159. A Certificate of Origin may be issued retrospectively if a registered exporter makes an application in writing to the designated authority stating the reasons for such an issue. In his application, the exporter will also attach a copy of the export declaration of the products to which the Certificate relates. A Certificate of Origin will be issued retrospectively if an application is made within three months from the date of exportation of the products. The designated authority may exceptionally issue a Certificate of Origin in the following cases:

a. no Certificate of origin was issued at time of exportation;

b. the Certificate contained involuntary clerical or typing errors or involuntary omissions; and

c. any other unforeseen circumstances relating to the issuance of the Certificate of Origin as accepted by the designated authority.

160. In issuing a retrospective Certificate of Origin, the designated issuing authority will make the necessary origin verifications before supplying the Certificate.

161. The Certificate of Origin issued retrospectively must be endorsed with the following insert in Box 5 of the Form:

“ISSUED RETROSPECTIVELY”

(b) Procedures for the Issuance of a replacement Certificate of Origin

162. A replacement Certificate of Origin can be issued if a registered exporter makes an application in writing to the designated authority stating the reasons for such an issue.

163. The designated authority may issue a replacement certificate of origin on the basis of export documents in their possession in the event of theft, loss and destruction of the original Certificate of Origin.

164. The replacement Certificate of Origin must be endorsed with the following insert in Box 5 of the Form:

“REPLACEMENT CERTIFICATE NO…..

OF CERTIFICATE OF ORIGIN NO……ISSUED ON……….”

165. The designated issuing authority will keep a photocopy of these Certificates for five years for verification purposes.

(iv) Processes and Workings leading to a Change in Tariff Heading

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166. Council noted the processes and workings drafted by the Working Group leading to a change in tariff heading for the application of Rule 2.1.b (iii) of the Protocol as shown in Appendix V of Document COM/TCM/WKG/VII/10.

167. Council observed that in the development of the workings and processes for some Chapters of the Harmonised System, the Working Group had also introduced elements, which had trade policy implications for the regional trading system. These would have the effect of originating goods being subjected to more competition than similar goods imported from third countries, thereby negating the objective of regional trade and isolating the essential aspects of preferential arrangements. Council also observed that the region did not have the capacity of producing raw materials and intermediate inputs for the agricultural products (Chapters 1-24), plastics (Chapter 39), textiles (Chapter 50-63) and machinery and equipment (Chapters 84-85) of the H.S. The “wholly produced” concept needed a revision for the agricultural sector.

168. The Council also observed that some of the workings and processes proposed would result in contradicting the 35 percent value added criterion of the Protocol.

Decisions


a. the Working Group should review the proposed workings and processes taking into consideration the implications of the proposed rules and capacity of economies of member States to produce the affected goods; and

b. the workings and processes should be equivalent to the 35% value added criterion.

(v) Simplified Certificate of Origin

170. Council noted that member States were not using the Simplified Certificate of Origin, as per Council decision.

Decision

171. Council decided that Member States should be urged to comply with Council decision on the use of the simplified Certificate of Origin for small-scale traders.

(vi) Printing of the Certificate of Origin and other Forms

172. Council noted that the printing of the Certificate of Origin and Other Forms relating to origin of goods should be made in only one of the languages of the Treaty, as applicable in the country of export, to improve the space available in the boxes in the forms.

Decision

173. Council decided that COMESA should maintain the printing of the forms in all the languages of the Treaty.

(f) Economic Impact Assessment Study

174. Council noted that The COMESA and SADC Secretariats were carrying out the Economic Impact Assessment Study (EIA) as a joint exercise. The output from the EIA study would assist the COMESA and SADC Secretariats and their member States to implement the region's agenda

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more effectively through highlighting the expected benefits and identifying where any short-term negative impacts may occur.

175. The Council noted that the EIA was in two sections, the first being on trade data and trade policy and the second on the collection of firm level data. Council further noted that regional consultants have been engaged to collect this information.

(g) Standards and Implementation of the WTO TBT Agreement

176. Council noted that the Work Programme for the Standards, Quality, Metrology and Testing (SQMT) programme up to 31st December 2003 focuses on 3 activities, these being:

a. developing an approach to managing technical regulations within the context of the WTO TBT Agreement, including carrying out a stock-taking exercise to evaluate the current situation;

b. harmonisation of standards; and

c. preparation of a more detailed programme on standards, quality assurance, accreditation and metrology to be financed under EDF9.

(h) Regional Integration Facilitation Forum (RIFF)

177. Council noted that the current funding for RIFF was scheduled to come to an end by June 2004 and participating RIFF countries needed to determine whether RIFF should continue after 2004, and, if so, in what form.

Decisions


a. All COMESA countries should be encouraged to establish RIFF TWGs, develop and implement a Letter of RIFF Policy and formulate a TWG annual work plan, thereby becoming eligible to receive funding for a Secretariat to service the TWG and to have the annual work plan funded; and

b. Participating RIFF countries should consult nationally on the future of RIFF and be prepared to make their views known at a regional meeting of TWGs on 5-6 May 2003 and Ministerial meeting which will follow on 7 May 2003.

STRATEGIC FOCUS: COMESA CUSTOMS UNION

Article 45 of the Treaty provides that “there shall be progressively established in the course of ten years from the entry into force of this Treaty, a Customs Union among member States.”

Decision

Council at its Eleventh Meeting held in Cairo in 2001, (Document No.COM/CM/XI, at paragraph 71), adopted a Roadmap to the COMESA Customs Union.

Fourteenth Council further decided (Document No. COM/CM/XIV/3, under paragraph 100) that the Secretariat should prepare a holistic study on the status of the implementation of the road map towards the establishment of the Customs Union to be submitted to the Twelfth Meeting of the Trade and Customs Committee.

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I. CUSTOMS UNION AND COMMON EXTERNAL TARIFF

(a) Roadmap to the COMESA Customs Union

179. In view of the multiplicity of stakeholders Council stressed the need for the involvement of all relevant ministries in preparation for the Customs Union.

Decisions

180. Council decided that a Sub-committee of the Trade and Customs Committee should be formed, comprising relevant experts to undertake the following tasks:

a. Elaborate terms of reference for impact assessment studies of the transition into the CET, including measures to mitigate eventual impacts and modalities for administering the Customs Union.

b. Facilitate and co-ordinate country studies by National Working Groups on CET Structure and rates for the Customs Union by developing common terms of reference and study methodologies;

c. Suggest appropriate CET bands and rates based on the findings of the studies in (b) above;

d. Develop a programme for the alignment of member States tariff rates with the CET target rates;

e. The Sub-committee should present its report to the Committee by October 2003; and

f. A Joint Ministerial meeting involving Ministers of Trade, Finance, Agriculture and other economic ministries be organised to consider issues related to the Customs Union.

(b) WTO Tariff Bindings and the CET

Decision

Thirteenth Council decided that tariff bindings of member States under the WTO framework should be examined to determine whether the COMESA CET would be consistent with the WTO and to propose appropriate recommendations. (Document No. COM/CM/XIII/3 under paragraph 95 (vi))

Fourteenth Council further decided (Document No. COM/CM/XIV/3, under paragraph 100) that: the Secretariat should undertake further analytical work on the implications of tariff bindings taking into consideration all the WTO provisions relating to regional arrangements.

181. Since there were negotiations taking place in Geneva under the Doha Development Agenda, there was need for COMESA to establish linkages with the Geneva-based COMESA Missions in order for the interests of the COMESA region to be taken on board in the on-going negotiations.

182. Council noted that the renegotiations of the tariff bindings would have to be done by the individual affected Member States with the WTO Members that had Initial Negotiating Rights, Principal Supplying Interests, or those with Substantial Interests. Council stressed that in setting the CET rates, the economic interests of COMESA region should be the main determinant of the duty levels set for the CET.

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Decisions


a. COMESA Ministers should issue a Declaration before the 5th WTO Ministerial Meeting (September 2003) to influence the review and clarification on the WTO-RTA rules;

b. Geneva-based missions of COMESA member States should be more involved in the COMESA processes in order to take on board the concerns of the COMESA region in the on-going WTO negotiations; and

c. COMESA CET should be worked out taking into account developmental aspects of the region.

(c) The Common Tariff Nomenclature: Report of the Second Meeting of Trade and Finance Experts

Article 64 of the Treaty provides for the establishment of a Common External Tariff and member States to adopt a uniform, comprehensive and systematic classification of goods with a common and specific basis of description and interpretation.

Fourteenth Council decided that the Trade and Finance Experts working on the Common Tariff Nomenclature to re-examine the duty exemption regimes, taking into account international conventions and national obligations, in Document COM/TCM/XIV/3 at paragraph 89.

Decision

184. Council agreed that on the study on goods of economic importance, each Member State should submit a list of goods prepared by National Working Groups for inclusion in the regional listing of goods of economic importance.

(d) The Customs Management Act

Decision

At its meeting held in May 2001, Council “established a Working Group to spearhead the harmonisation of customs procedures and legislation.

Fourteenth Council noted that the Working Group had completed the drafting of the Customs Management Act. Document COM/CM/XIV/3, at paragraph 91

185. Council noted that the Heads of Customs would examine the proposed Act in late April 2003 in Kigali, Rwanda, after further internal consultations by member States.

Decision

186. Council decided that Member States be urged to finalise their internal consultation on the Customs Management Act and submit comments to the Secretariat before end of March 2003 for consideration by the next meeting of Heads of Customs Administrations.

(e) Formulation of Regional Competition Policy

Decision

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Council in November 1999 (Document No. COM/CM/VIII/6 at paragraph 212 (i) had decided that Article 55 of the Treaty should be used as a starting point as a starting point for developing a regional competition policy. Fourteenth Council further decided that more consultations should be undertaken with all stakeholders in order to build consensus and create greater awareness of the regional law and make amendments where appropriate before consideration at the next Trade and Customs Committee. (Document No COM/CM/XIV/3 at paragraph 102)

187. Council re-iterated the importance and significance of the COMESA Competition Policy.

188. Council acknowledged the need for a regional competition policy owing to anti-competitive behaviour of some multinationals and domestic companies in the region which was adversely affecting the functioning of the FTA. A regional policy was needed to deal with cross-border anti-competition behaviour as national law does not have cross-border jurisdiction. Competition policy at the multilateral level is treated with caution as it is suspected that it would be used to open up developing countries' markets to developed countries.

189. Council noted that Article 55 of the COMESA Treaty provides for the prohibition of anti-competitive practices. The proposed Regulations are therefore intended to provide the operational aspect of the Regional Competition Policy.

Decision

190. Council decided that member States continue with consultations and submit their comments to the Secretariat by the end of August 2003.

(f) Regulations on Customs Procedures for COMESA Trade Fairs and Exhibitions

Decision

Council in November 2001 (Document no. COM/CM/XII/2 at paragraph 179 (b) decided that “agreement on harmonised treatment of goods brought for exhibition at trade fairs be concluded”.

191. Based on this decision, Council was informed that draft Regulations on Customs Procedures for COMESA Trade Fairs and Exhibitions were prepared and presented.

Decision

192. Council decided that the Heads of Customs Administrations should examine the draft Regulations on customs procedures for COMESA Trade Fairs and Exhibitions.

(g) Co-operation for Development Programme of WIPO

193. Council noted the activities of the World Intellectual Property Organisation (WIPO) on the protection and use of intellectual property, including the fight against counterfeiting, enforcement, assistance and co-operation.

194. Council stressed the need for WIPO to take account of the interests of COMESA Member States in its enforcement activities especially in areas such as protection of indigenous rights in plants, flora and fauna and intellectual property rights of indigenous artists and musicians, among others.

Decision

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195. Council decided that COMESA should collaborate with WIPO to build capacity on intellectual property rights issues.

MULTILATERAL TRADE ISSUES

a. ACP/EU Economic Partnership Agreement

Decision

In May 2001, Council directed (Document No. COM/CM/XI/3 at paragraph 28(d)) the Secretariat “to prepare an orientation paper on the nature of the ACP-EU Partnership Agreement”

Council in May 2002 (document COM/CM/XIII/3 at paragraph 31(iii) decided that “EPA's should have development dimension and be coherent with the overall objectives of the COTONOU Agreement and the development needs and choices of the ACP States and regions. Council further re-affirmed its decision regarding the two-tier approach to EPA negotiations. Council called on Member States to determine what elements should be negotiated at the all-ACP and regional levels. It reiterated its concern for specificities of LDCs, small landlocked and vulnerable countries to be taken into account during the negotiations.

196. Council noted that the EPA Working Group continued to meet to implement the agreed work programme and that the ACP had decided on the negotiating Troikas at Ambassadorial and ministerial levels and of the African Union position on the EPA negotiations

197. Council noted that COMESA needed to make a decision on regional configuration as a matter of urgency if it wanted to be able to negotiate an EPA rather than have one prescribed by the EU. Council noted the request by Sudan to be a member of the EPA Working Group.

Decisions


a. Eastern and Southern African countries which are also ACP countries should negotiate an EPA as a group; and

b. that an ESA meeting (officials and Ministerial) be held in May/June 2003 out of which a regional negotiating strategy and mechanisms would be developed for the ESA region.

(b) WTO Doha Development Agenda

199. Council noted the lack of progress being made in areas of interest to developing countries and emphasized that it was crucial that COMESA countries actively participate in the WTO negotiations in Geneva in order to advance their interests. Council however pointed out that it was important for COMESA to come up with issues that would be tabled at WTO rather than react to proposals from the developed world. Council noted that the Secretariat was holding consultations for the convening of back to back Ministerial meetings on EPAs and WTO in May/June 2003.

Decisions

200. Council made the following decisions:

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a. that the WTO Working Group should comprise Burundi, Egypt, D. R. Congo, Kenya, Malawi, Mauritius, Rwanda, Sudan, Uganda, Zambia and Zimbabwe. The Working Group Terms of Reference should include accession of COMESA Member States to the WTO;

(b) workshops on WTO issues be organised before the Cancun Ministerial Meeting;

(c) a joint COMESA/SADC ministerial meeting should be convened in preparation for the 5th Ministerial Session; and

(d) the Secretariat should build capacity and sharpen trade policy negotiation skills on WTO issues; expedite the acquisition of COMESA observer status at the WTO; and exploit synergies between the WTO Doha Development Agenda and the recent Monterrey Consensus on Financing for Development (FfD) process.

STRATEGIC FOCUS: MONETARY AFFAIRS

(a) Regional Financial Stability and Macro-Economic Convergence Indicators

Decision

The Thirteenth Meeting of Council of Ministers which was held in May, 2002 (Document COM/CM/XIII/3 paragraph 46) agreed that bank supervision and regulation need to be strengthened and harmonised, in order to ensure the safety and soundness of the financial systems in the region.

201. Council noted that the Second Meeting of Bank Supervisors, was held from 3-5 February 2003 in Lusaka, Zambia. The report of this meeting would be submitted to the Sixth Meeting of the COMESA Ministers of Finance, which will be held in August 2003 in Bujumbura, Burundi. The issues discussed included, financial sector assessment programme; regulatory policy; regulatory policy and institutional mechanism for micro-finance institutions; supervision of banking group; harmonisation of bank supervision and regulation in the COMESA region; and implementation of banking and financial standards in Africa under NEPAD.

202. Council emphasized the need to link the financial stability indicators to the COMESA macro-economic convergence criteria and assess whether macro-economic convergence is occurring within COMESA.

(b) Modernisation of the Domestic Payment System

Decision

The Ninth Meeting of Council of Ministers of COMESA, which was held in Pointe Aux Piments, Mauritius, from 15 to 16 May 2000, (Document COM/CM/IX/7 Paragraph 113) decided that member States should modernise their national payments as a matter of urgency.

203. Council was informed that the World Bank had expressed an interest to support COMESA (Non-SADC) member States in modernising their national payment systems, along the lines of the assistance currently provided to SADC member States under the SADC Payments System Programme.

204. Based on this, the Secretariat requested central banks in non-SADC member countries to confirm their interest. Burundi, Djibouti, Egypt, Ethiopia, Eritrea, Rwanda and Sudan expressed their interest in the project. Confirmations of interest from Uganda, Kenya, Madagascar and

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Comoros were also expected. The Secretariat would formally submit a project proposal to the World Bank as soon as confirmations from the remaining countries were obtained.

(c) PTA Travellers Cheques Fund

Decisions

Council of Ministers also decided, at their Twelfth Meeting held on 30th November 2001 in Lusaka, that (a) The Bureau of Governors decides on where the PTA Travellers Cheque Fund should be deposited and that the Fund should be used for COMESA projects. Ministers also agreed that proposals must be submitted to the Bureau of Governors for consideration and approval.

205. Council noted that an account had been opened at Citibank, Lusaka, to which the PTA Bank, through the Reserve Bank of Zimbabwe, would pay the amount outstanding from the PTA Travellers Cheques Fund. The Reserve Bank of Zimbabwe had undertaken to cede the money by end January 2003.

(e) COMESA Bankers Association

Decision

The COMESA Bankers Association was formed to provide a forum for the exchange of information on banking, to harmonise banking practices in the region and to promote links among banks in the region

206. The Association undertook seminars on Banking Fraud, Credit Risk Management and Marketing for banks during the year 2002 which were attended by 136 participants. The Association recently started joint programmes with organisations with similar interests on a cost-sharing basis. In this regard, agreements have already been made with the African Project Development Facility and Credit Reference Bureau (Holding) Limited (CRB). Based on the agreement with APDF a course on asset based finance was held in Mangochi, Malawi, from January 13-17, 2003.

STRATEGIC FOCUS VI: AGRICULTURE

Article 129 of the Treaty provides that “The overall objectives of co-operation in the agriculture sector are the achievement of regional food security and rational agricultural production within the Common Market. To this end, the member States undertake to adopt a scheme for the rationalisation of agricultural production with a view to promoting complementarity and specialisation in and sustainability of national agricultural programmes in order to ensure:

a. Common agricultural policy;

b. Regional food sufficiency;

c. an increase in the food productivity of crops, livestock, fisheries and forestry for domestic consumption, exports within and outside the Common Market and as inputs to agro-based industries; and

d. replacement of imports on a regional basis”.

207. Council underscored the importance of the agriculture sector in the economies of most COMESA countries, as it had the capacity to create employment, trigger industrial growth, and

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ensure national and regional food security in an environmentally sustainable way. Council further noted that the Secretariat was promoting programmes aimed at attaining food security through increased supply of fish, crops and livestock.

208. Council noted that the Ministers of Agriculture met in Kampala, Uganda in November 2002, where among other things, they discussed the draft Common Agriculture Policy and Strategy. Council noted that the Ministers adopted an action plan during the meeting. The Committee of Agriculture will be meeting before the end of the year to review programme implementation.

209. Council agreed that there was an urgent need to recruit an Agricultural Expert to assist with the implementation of agricultural programmes.

Decisions


(a) that an Agricultural Expert be recruited during 2003 against the vacant position of Private Sector Development Officer (P3); and

(b) that the post of Private Sector Development Officer (P3) be reclassified to an Agricultural Economist (P3) and that the Job description and qualifications be aligned accordingly.

(a) Project Proposal on Rice and Fisheries

Council at its Fourteenth Meeting held in November 2002 at Lusaka (Document COM/CM/XIV/3 paragraph 30(b) decided that “ the rice and fisheries projects should be submitted to multi-stakeholder or big financial institutions such as ADB and World Bank for funding.

211. Council noted that the following project proposals had been submitted to the African Development Bank (ADB):

a. Promotion of Regional Co-operation in the Development of Institutional Credit Savings Facilities for the Fisheries Sector in the COMESA region;

b. Training in Fish Quality Assurance and Strengthening of National Fish Quality Assurance Units;

c. Acquaculture Development through Training of Fish Farmers, Establishments of Fish Seed Production Centres, Credit to Farmers and Provision of Extension Services;

d. Reviewing Methods Used in Fisheries Statistics and Fish Stock assessment; and

e. Harmonisation of Regional Standards for Fish, Fish Factories and Fishery Products.

(b) Production and Marketing of Value Added Fishery Products

212. Council noted that this project is aimed at developing and promoting production and marketing of new/improved fishery products based on Nile perch and dagaa.

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213. Council further noted the need to expand the scope of this project to cover other water bodies such as Lakes Tanganyika and Malawi. The project should also cover more countries in order to increase the benefits for the region.

214. Council further noted that under EDF9 the IOC Secretariat was preparing a financing proposal on fisheries which includes all member States.

(c) Agricultural Institutional Strengthening Project

215. Council further noted that a Project Proposal on Agricultural Institutional Strengthening was submitted to the African Development Bank (ADB) for possible funding. This project is composed of the Sanitary and Phyto-Sanitary Measures, and the establishment of a COMESA Food and Agricultural Trade Promotion Unit (FATPU).

216. Council noted that the Secretariat is awaiting an appraisal mission on the project from the ADB and that it is envisaged that the funding would be available before the end of the 2003.

(d) Project on Sustainable Rice Production

Council at its Fourteenth Meeting held in November 2002 at Lusaka (Document COM/CM/XIV/3 paragraph 30(a)) decided “that Consultants engaged by Common Fund for Commodities (CFC) on rice production study, should work closely with relevant authorities in the member States, to identify rice production potential for development”.

217. Council noted that the project on sustainable rice production in the COMESA region was aimed at achieving self-reliance in rice production. Consultants engaged to carry out a feasibility study had carried out a desk study and have submitted their first draft report. The report clearly states that the COMESA region has the potential to increase rice production. The field technical missions are yet to be undertaken. Selected countries will be informed of the missions as soon as the programme for country visits is agreed upon between COMESA, CFC and the Consultancy Firm.

Decision

218. Council decided that Member States should each assign a contact person for the project to facilitate the work of the consultants when they visit the selected countries.

(e) Collaboration with NEPAD

Council at its Fourteenth Meeting held in November 2002 at Lusaka Document COM/CM/XIV/3 paragraph 34 decided that “ COMESA Secretariat should work closely with both the African Union and the New Partnership for African Development (NEPAD) Secretariat in following up the implementation of the Comprehensive African Agriculture Development Programme (CAADP) by member States”

219. Pursuant to Council Decision, COMESA Secretariat and the NEPAD Secretariat had a meeting on 16 January 2003 at the COMESA Secretariat, Lusaka, Zambia, to discuss and

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identify areas of co-operation. One of the priority areas identified was the attainment of food security in the COMESA region under the framework of the NEPAD's CAADP. In this regard, COMESA will specifically focus on irrigation development as a means of improving food security in the region. Within the context of irrigation development initially, rice, bananas and fish will be given special emphasis.

220. Council noted that COMESA Secretariat submitted a project proposal on irrigation development to NEPAD in January 2003 and in view of the urgency to address the food crises in the COMESA region, this project is intended to start immediately following the identification of funding.

(f) Regional Agricultural Commodity Exchange

Council at its Fourteenth Meeting held in November 2002 at Lusaka Document COM/CM/XIV/3 paragraph 31(b) decided that" Member States should establish Agricultural Commodities Exchanges, which will be networked to facilitate agricultural trade within the COMESA region.

221. Council noted that the Secretariat in collaboration with the Common Fund for Commodities initiated a study on the feasibility, viability, and logistical institutional support required establishing a Regional Agricultural Commodity Exchange in the COMESA region. The study would focus on: Ethiopia, Kenya, Uganda, Tanzania, Rwanda, Burundi, Malawi, Zambia and Zimbabwe and will cover Coffee, Cotton, Grains, and Sugar as the main commodities to be traded once the commodity exchange is established. Other commodities that may be found to be suitable for trade through the commodity exchange will be considered.

222. The report of the study was expected to be ready by the end of March 2003 and both COMESA and CFC will discuss it in order to determine if it is feasible that a project be formulated for the establishment of a regional agricultural commodity exchange.

223. Council noted that some of the countries would have wished to be included in the study and that that there was need to consider other crops such as tea in the study. Council agreed that prior to any such studies, it was important for member States to be consulted to ensure that all interests and concerns were taken into account.

224. Council noted that the initial pilot study on regional agriculture commodity exchange was funded by CFC and that CFC had bilateral relations with non-COMESA countries such as Tanzania and studies in programmes that are regional in nature, would include non-COMESA countries. This was also the practice of other International Organisations such as the Commonwealth Secretariat.

225. Council noted that following the restructuring in 1998, the Secretariat did not have an agriculture expert and hence outsources expertise to support agriculture programmes. The Secretariat appealed to member States to ensure that they attend agriculture meetings when invited, as this would facilitate implementation of programmes.

Decision

226. Council decided that Member States should provide the Secretariat with information on the addresses of the existing commodities exchanges, legal and regulatory framework, payment procedures, administrative, warehouse systems and other information necessary on the operationalisation of the country commodity exchanges.

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STRATEGIC FOCUS: ECONOMIC AND SOCIAL DEVELOPMENT

Article 4 sub paragraph 6 of the COMESA Treaty on specific undertakings asks member States to promote the achievement of the aims and objectives of the Common Market as set out in Article 3 of the Treaty; and in accordance with the relevant provisions of the Treaty in the field of economic and social development.

227. Under this programme the Secretariat reported the following:

(a) The COMESA Fund

Decision

The Authority adopted the Protocol relating to the Fund for Co-operation, Compensation and Development of the Common Market for Eastern and Southern Africa in May 2002 at Addis Ababa, Ethiopia and opened it for signature. Twelve Member States signed the Protocol. The Authority appealed to the International Community to support the Fund.

228. Council noted that, at the 2002 COMESA Summit in Addis Ababa, twelve COMESA Member States signed the COMESA Fund Protocol. However, no country has as yet ratified the protocol.

229. The COMESA Fund has two components, these being:

a. COMESA Infrastructure Fund; and

b. COMESA Adjustment Facility.

230. Council noted that the Secretariat had prepared a draft financing proposal for the COMESA Fund to be financed under the Ninth European Development Fund (EDF9). The draft financing proposal needs to be approved by the Inter-Regional Co-ordinating Committee (IRCC), which has representatives from COMESA, EAC, IGAD, IOC, SADC and the EU and which ensures coherent regional policy support using EDF funds. After this stage it will be submitted to the EU Member States EDF Committee for their approval.

231. Council further noted that the Secretariat had also developed a structure for the COMESA Infrastructure Fund which involves using donor finance to act as collateral for a private sector fund and this is being discussed with a number of development banks and financial institutions.

232. The Secretariat has also been developing the COMESA Fund Adjustment Facility. This has been done by developing a regional integration surveillance mechanism, which should act as a “trigger mechanism” for budgetary support. If a COMESA country wishes to continue with an economic liberalisation policy it should not be constrained by short-term budgetary shortfalls. If, for example, a country wishes to reduce tariffs as part of a trade policy reform programme it should not be constrained to do so as a result of a short-term loss of revenue, which may be experienced after tariffs are reduced but before the effects of other fiscal adjustments become apparent.

233. Council noted that Burundi, Uganda, Sudan, Kenya, Rwanda and Ethiopia had advanced the process of ratification.

Decision


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(a) the Secretariat should circulate the proposal on the COMESA Fund made to the IRCC.

(b) the COMESA Secretariat should concentrate on developing and refining mechanisms to be used in the implementation of the COMESA Fund.

(b) Free Movement of Persons, Labour, Services, Right of Establishment and Residence

Decisions

The Sixth Summit of the COMESA Authority held in Cairo, Egypt in May 2001 adopted the Protocol on the Free Movement of Persons, Labour, Services, Right of Establishment and the Right of Residence. Council of Ministers meeting held in the Democratic Republic of Congo in June 1998 also adopted the five stages for implementation of the Protocol on Free Movement.

235. Council recalled that following the recommendation of the Fifth Meeting of the Ministers of Justice and Attorneys-General held in Lusaka, Zambia on 27 April 2001, the “Protocol on Free Movement of Persons, Labour, Services, the Right of Establishment and Residence” was amended and adopted by the Sixth Summit of the COMESA Authority. The Authority also opened the adopted Protocol for signature by all the Member States.

236. Council further recalled that at its Fifth Meeting held in Congo D.R. in June 1998 Council decided that the Protocol shall be implemented progressively in five stages as follows:

Stage I: Part II of the Protocol

Objective: Gradual Removal of Visa Requirements and Cooperation in the prevention and fight against crime

Period: Ongoing

Stage II: Part III of the Protocol

Objective: Enhancing movement of skilled labour

Period: Progressive implementation for six years from date of entry into force of Protocol

Stage III: Part IV of the Protocol

Objective: Movement of Services

Period: Programme to be developed by 2004 for progressive implementation of a period to be agreed upon by Council

Stage IV: Part V of the Protocol

Objective: Right of Establishment

Period: Council to draw up programme of progressive implementation within two years of entry into force (2004-2010)

Stage V: Part VI of the Protocol

Objective: Right of Residence

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Period: 2014 (20 years from the date of entry of the COMESA Treaty)

237. Council further noted the importance of the Protocol on Free Movement in the context of deepening regional economic integration and agreed that its signature and ratification by all Member States would complement the Free Trade Area and Customs Union.

238. Council recalled the Fifth Meeting of Council of Ministers agreed that special consideration of the circumstances of each State, such as Mauritius and Seychelles with regard to Article 9, 11 and 12 should be taken into account when implementing the Protocol. Council noted that some member States are ready to sign the Protocol.

Decision


a. the Secretariat convenes a meeting of Chief Immigration Officers and Ministers of Home/Internal Affairs to review progress in implementing the free movement programme; and

b. Member States that have not completed national consultations on signature of the Protocol on Free Movement should do so in order that the matter be considered at the 2004 Summit.

(c) Gender Perspectives

Report of the First Meeting of the COMESA Technical Committee on Gender and COMESA/UNAIDS Workshop

240. Council noted the discussions of the first meeting of the Technical Committee on Gender and COMESA/UNAIDS Workshop.

(i) Constitution of the Technical Committee

Decision:

The 14th Meeting of Council of Ministers held in November, 2002 in Lusaka, Zambia, decided that “Member States should nominate and submit names of representatives and alternates to the Gender Technical Committee preferably before Policy organ meetings planned for March, 2003".

241. Council also noted that a Technical Committee on Gender was constituted and the Secretariat had formulated Rules and Procedures for use by the Committee as provided for in the Treaty.

Decision

242. Council adopted the rules and procedures and decided that the Technical Committee on Gender should consist of the office(s) responsible for Gender Policy in the public service (Ministries of Gender), sector specific Gender Experts from relevant private sector institutions, civil society and development partners.

(ii) COMESA Gender Policy

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243. Council noted that the Secretariat was arranging to publish the COMESA Gender Policy, which would be circulated to all stakeholders.

Decisions


a. gender mainstreaming activities should be harmonised within government ministries to avoid duplication of efforts and observe cost effectiveness measures;

b. National Gender machineries be enhanced by Member States through capacity building activities, resource mobilisation and allocation of adequate budgets; and

c. Member States should have specific programmes targeting women, which should be reflected in the annual reports of Member States.

(iii) COMESA Gender Strategic Action Plan

245. Council noted that the Secretariat had formulated a Gender Policy Strategic Action Plan to facilitate mainstreaming gender into COMESA programmes.

Decisions


a. The Strategic Plan developed by the Secretariat be extended from 2 years to 5 years and that short term consultants be recruited to assist with implementation;

b. The meeting of the Technical Committee on Gender should be held at least once a year;

c. A COMESA meeting of Ministers of Gender be convened before the 2004 Summit; and

d. Member States should provide annual reports on the status of implementation of the COMESA gender policy.

(iv) UNAIDS/COMESA Workshop

247. Council noted that HIV/AIDS continues to pose major challenges to the economic development of the COMESA region. The meeting further observed that HIV/AIDS was a cross cutting issue and that a workshop on HIV/AIDS was jointly organised by COMESA and UNAIDS.

248. Council agreed on the need to develop modalities of mainstreaming HIV/AIDS strategies in the Gender Strategic Action Plan.

Decisions


a. HIV/AIDS strategies be mainstreamed into the COMESA strategic action plan and COMESA programmes; and

b. COMESA should collaborate with the private sector, cross border traders and other relevant partners in the fight against HIV/AIDS.

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(d) Advocacy/Public Relations

Decision:

Council in May 2000 (document COM/CM/IX/7 paragraph 77):

a. Urged member States to hold events to promote the aims and objectives of COMESA;

b. Requested member States to implement Council decision to play the COMESA song on national radio and television;

c. Directed the Secretariat to prepare broad guidelines on how member States should publicise COMESA; and

d. Requested member States to actively promote COMESA at national level through the issuance of promotional material and other publicity activities.

250. Council noted the following:

(i) Development of an Advocacy Strategy

251. In the area of advocacy COMESA is strategically using information to positively influence the perception of various targeted stakeholders (e.g. journalists, MPs, Ministers, civil servants, business people, students etc).

252. COMESA's advocacy activities in 2002 included the issuing of press releases; radio and television interviews; production and dissemination of fact sheets and calendars on COMESA; dissemination of COMESA Regional Integration Research Network publications; production of the annual report and posting of information on the COMESA website.

(ii) Development of COMESA e-mail contacts Database

253. To enable quick, cost effective and efficient communication the COMESA Secretariat compiled an email database of more that 2000 addresses.

(iii) Electronic Newsletter

254. Starting from January 2003, COMESA has been issuing a bi-monthly electronic newsletter. It is posted to all the addresses that are in the COMESA database the electronic newsletter is also posted on the COMESA Internet and Websites. The newsletter can be accessed on http/www/comesa.int/news.

(iv) Creation of Public Relations Communication Team

255. In order to offer quality communication, the COMESA Secretariat has created a Public Relations Communication team.

256. The Public Relations Communications Team will comprise Secretariat Public Relations and Information Technology Units; and COMESA Desk Officers who receive and disseminate information on COMESA.

(v) Primary and Secondary School Quizzes

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257. To celebrate 20 years of the existence of COMESA and 2 years of the FTA, the COMESA Secretariat in collaboration with Zambia Broadcasting Corporation, carried out a pilot School quiz.

(vi) External Collaboration

258. The COMESA Secretariat continues to seek external collaboration. In January 2003, an understanding was reached with journalists from the UK Economist publication to produce country economic reports on COMESA countries. The attention of member States will be drawn to the publications as and when they are produced.

259. In anticipation with the growing interests in the Indian Community, COMESA, in collaboration with the private sector and Committee of Ambassadors in New Delhi, produced a document on COMESA-India opportunities.

(vii) Media Awards

260. The Secretariat, in collaboration with Coca-Cola, is in the process of developing a COMESA media award. The media award will be presented to individual reporters who demonstrate excellence in reporting on economic co-operation and integration issues. The proposals for the media award will be circulated to member States for comments in the course of the year.

(e) Information and Communications Technology

261. The need for a more efficient information flow and effective communications technology continues to be a priority for the COMESA Secretariat and its Member States in the implementation of their programmes and activities. With some of the necessary infrastructure in place, the Information Technology (IT) Unit of the Secretariat is working to meet this need by introducing value-adding applications and technologies.

(i) Security

262. The security of the COMESA Secretariat network infrastructure has been enhanced by installing a hardware firewall which isolates the data network of the Secretariat from the rest of the world.

(ii) Intranet

263. An Intranet application has also been introduced to the Secretariat staff and initial training was provided to the staff. This Intranet application aims to improve internal communications and collaboration among staff members. Once fully optimised at the Secretariat, the Intranet application will be extended to Member States, with appropriate training being provided so that documents and other communications may be passed on between these offices and the Secretariat using the same application.

(iii) Website

264. The current COMESA website will soon be redeveloped and the IT Unit has received tender submissions from various companies. Work will start as soon as a successful bidder is chosen.

(iv) Improving Communications between member States and the Secretariat

265. A detailed study of the various areas of communications technology and e-commerce for COMESA has been undertaken. When implemented, the findings of the study will improve communication between member States and the Secretariat.

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(f) Resource Mobilisation and Technical Co-operation

266. The meeting noted the important developments that have taken place with regard to Technical Co-operation and Resource Mobilisation over the reporting period.

i. Mission from France

267. Council noted that COMESA mounted a high level mission to Paris in October 2002 with the aim of initiating dialogue and collaboration. During the visit, the COMESA delegation had the opportunity to meet with senior government officials and private sector representatives and identified areas of future collaboration.

268. Council further noted that the France's Secretary of State for Co-operation visited COMESA on 23rd January 2003 and during the visit, France and COMESA signed an agreement that provides for French bilateral technical and financial assistance to COMESA.

ii. High level COMESA mission to India

269. A high level COMESA delegation led by Honourable A.K. Gayan, Minister of Foreign Affairs and Regional Co-operation of Mauritius visited India from 8-10 February 2003. During the visit a memorandum of Understanding on Economic Co-operation was signed between COMESA and the Government of the Republic of India.

270. During the visit the delegation had the opportunity to meet with pharmaceutical companies which expressed keen interest to collaborate with COMESA on manufacturing drug. However, the companies expressed concern over the lengthy procedure in COMESA member States, to approve drug registration.

271. India has also expressed interest to collaborate with COMESA countries in developing mini steel plants on joint venture basis.

Decisions


a. the MOU between COMESA and India be circulated to all Member States;

b. that an implementation mechanism for the MOU be developed;

c. that a committee of officials and private sector representatives from both COMESA and India should meet every two years to review the implementation of the programmes provided for in the MOU;

d. that a joint meeting of Ministers from COMESA and India be held every two years preferably back to back with the annual COMESA meetings;

e. that the venues for the consultative meetings of Ministers, officials and private sector should alternate between COMESA and India; and

f. that Council is invited to express appreciation to the Government of India for pledging to provide cereals to member States that are experiencing food deficit, and for the offer to provide technical assistance in developing irrigation projects.

iii. Collaboration with USAID

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273. Council noted that COMESA and USAID/REDSO met from 27-29 January 2003, to review the status of ongoing projects, the utilisation of the $2.3 million provided in August 2002 and to agree on the projects to be financed with the additional $1 million offered by the U.S. State Department.

274. Council noted the US Government established an Eastern and Central Africa Global Competitiveness Hub (ECA Hub) in 2002. The main objective is to strengthen the capacity of the countries to participate more effectively in the multilateral trading system. COMESA is the main partner of the ECA Hub and the Hub's activities have specific focus on the COMESA Free Trade Area and Customs Union.

(iv) Fourth COMESA-SADC Task Force Meeting

275. Council noted that the Fourth Task Force Meeting between COMESA and SADC took place in Lusaka, Zambia on 5-6th February 2003 at the level of the two Deputy Heads of the Secretariats. The Task Force was established accordance with the decision of the two Chairmen of COMESA and SADC in Cairo, Egypt in May 2001.

276. Council further noted that the Task Force meeting reviewed progress made in areas where collaboration had already started. Such areas include:

a. harmonisation of customs procedures and trade policy;

b. development of a Regional Customs Bond Guarantee Scheme and third party motor vehicle insurance;

c. sharing of trade statistics and Statistical Training;

d. developing a common programme on trading standards;

e. developing common programmes in transport and communications which will reduce the cost of intra-regional trade;

f. undertaking Economic Impact Assessment studies; and

g. collaboration in the implementation of their Regional Indicative Programmes and preparation for EPA negotiation.

277. Council also noted that the Task Force meeting identified further areas of collaboration on:

a. non tariff barriers, including the regulatory environment for Technical Barriers to Trade with a view to developing a joint monitoring and implementation mechanism;

b. developing a common programme in air traffic liberalisation, including upper air space control;

c. exploring the possibility of convening a joint Ministerial meeting to prepare for the Cancun Ministerial meeting and beyond;

d. promoting the interest of Africa in the framework of AGOA; and

e. working together in designing strategies and exchange information to deal with problems of food shortage and the outbreak of animal diseases affecting the region.

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Decision

278. Council decided that the Task Force should consider collaboration in other areas including trade in services, regional competition policy and CET.

(v) Programming the Ninth European Development Fund

279. Council noted that the 9th European Development Fund's indicative programme amounting to €223 million was signed in Kampala on 19th November 2002. Its focal areas as approved by COMESA' s policy organs of May 2002 (Addis Ababa) are: supporting the process of economic integration and trade liberalisation; the development of the transport and communications infrastructure; and the sustainable management of the region's natural resources. Non-focal activities will cover institutional support to the regional integration organisation as well as cultural and educational programmes.

280. The challenge ahead is now for COMESA, in partnership with EAC, IGAD and IOC, to effectively and efficiently implement this 223 million Euro co-operation programme. The detailed preparation of the projects and programmes will be closely co-ordinated with SADC.

281. In order to facilitate this co-ordination with EAC, IGAD, IOC and SADC, an Inter Regional Co-ordinating Committee (IRCC) has been established. COMESA holds its rotating Presidency during 2003 whilst the COMESA Secretariat will permanently host its Secretariat. A dedicated IRCC Secretariat has been created and has been operational since January 2003, with the support of the European Commission.

282. The IRCC met in Lusaka on 3rd and 4th February, 2003 and initiated the preparation of programmes in a number of sectors including ICT, regional integration, infrastructure, food security, fisheries, peace and security and environmental control.

283. Council was informed that COMESA would be submitting programmes on ICT support; regional integration; infrastructure investment plan; and COMESA Fund Adjustment Facility to the IRCC meeting a 16th March 2003.

284. The Secretariat agreed to distribute the summary of the project proposals to member States after they are approved by the IRCC.

285. The EU representative informed the meeting that both the fifteen EU members and more than two-thirds of the ACP members have now ratified the Cotonou Agreement and that the Agreement will come into effect on 1st April 2003. With regard to allocation of EU funds, the EU representative informed the meeting that the EU has allocated resources by each ACP country under the National Indicative Programmes of EDF9. In addition to this, the EU was allocated funds for use by the Regional Organisations under the Regional Indicative Programmes of EDF9.

Reports by the COMESA Institutions (Agenda item 10)

a. PTA Bank

286. The PTA Bank continued to promote the integration of the economies of Member States through provision of finance and technical assistance. For the year 2002, the Bank approved COM $41.2 million under project finance and COM $61.2 million under trade finance. In both cases the approvals showed substantial increases over the previous year. On the financial performance, total income increased from COM $11.02 million to COM $12.23 million. The Bank requested members of COMESA who had not joined the PTA Bank to do so as soon as possible.

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287. Council noted that, pursuant to the decision of the Seventh Authority of the COMESA Authority, it was agreed that the government of Burundi and the PTA Bank were working on the modalities for the return of the PTA Bank to Bujumbura, Burundi. Council further noted that the headquarters building of the PTA Bank had been completed and that the local staff were now operating from the building.

288. Council also noted that the PTA Board of Directors would meet in Nairobi, Kenya from the 27 to 28 March 2003 and will review the progress report on the return of the PTA Bank to Bujumbura. The Board will further propose the way forward to implement the decision of the Seventh Authority of COMESA.

289. The Honourable Minister from Burundi informed the meeting that progress had been slow and that his government expected the Board of Directors would comply with and implement without delay the decision of the Heads of State and Government of Addis Ababa, Ethiopia. The practical modalities particularly concerned the establishment of a timetable for the return of the Bank to Bujumbura, Burundi.

Decision

290. Council urges the policy organs of the PTA Bank to finalise quickly the on-going work on the practical modalities and establish, jointly with the Government of Burundi, the definite time frame for the return of the Bank to Bujumbura in conformity with the decision of the Heads of State and Government in Addis Ababa, Ethiopia.

b. PTA Reinsurance Company (ZEP-Re)

291. For the year 2002 the PTA Re-Insurance Company (ZEP-Re) wrote a premium income of COM $15.5 million marking a 32% growth from 2001. Membership rose to 30 in 2002 with four (4) new shareholders admitted in 2002 namely:

a. Government of Rwanda;

b. Juba Insurance Company (Sudan);

c. Sheikan Insurance Company (Sudan); and

d. United Insurance Company (Sudan).

292. ZEP-Re will be celebrating its 10th Anniversary in Asmara, Eritrea in May and all are welcome.

Decision

293. Council decided that Member States should give timeframes to comply with the decision of the Seventh Summit of the COMESA Authority that Member States not participating in the activities of ZEP- Re should do so as soon as possible.

c. COMESA Clearing House

294. The Acting Executive Secretary of the COMESA Clearing House presented the status Report on the activities of the COMESA Clearing House contained in document No. COM/IC/XV/5(a). Council noted that work on the Regional Payment and Settlement System

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(REPSS), was progressing as approved by Council at its Fourteenth Meeting, in the following areas:

(a) Setting up and Maintenance of a Trust Fund;

b. Legal Environment;

c. Business Process Analysis;

d. Paper Process; and

e. Setting up of National Workshop Groups (NWGs).

295. He also provided an update on the introduction of the African Commerce Exchange (ACE) services in Member States for the connection of central banks and commercial banks on the SWIFT Network.

296. The Fifth Meeting of the Committee of International Payments Experts from Central Banks will be convened on 28 - 29 April 2003 to review progress on the above work and will submit its recommendations to the Bureau of Governors for the next phase of implementation of REPSS.

d. COMESA Leather and Leather Products Institute (LLPI)

297. LLPI informed Council of its efforts to prepare projects of benefit to Member States. Member States were also requested to participate in the institute's programmes and support its activities.

Decisions


(a) the Member States which have paid their contributions (Kenya, Ethiopia and Rwanda) should be commended for doing so;

(b) Member States which have not paid their contributions be urged to pay their contributions and settle their arrears;

(c) Member States be requested to recommit themselves to support LLPI programmes;

(d) the Center for the Development of Enterprises be requested to expedite the consideration of the request from LLPI for studies on the rehabilitation of tanneries in Burundi, Rwanda and Uganda;

(e) Member States should channel their private sector leather and leather products projects to COMESA LLPI for onward transmission to PTA Bank and other financial institutions;

f. LLPI and ESALIA should work with the AGOA desks in Lusaka, Zambia and Washington to promote trade and investment in leather and leather products; and

g. LLPI should work with USAID/RATES project in undertaking studies and value chain analysis on the leather and leather industry.

e. COMESA Business Council (CBC)

299. Council noted that the CBC is still in its development stage and is in the process of developing a business plan.

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Decision

300. Council decided that the Secretariat should assist CBC to mobilise the necessary resources and identify a full-time professional manager to work for CBC. CBC should serve as a focal point to facilitate and co-ordinate business intermediaries and private sector companies within the COMESA region in order to work closely with CDE/PROINVEST.

f. COMESAMIA

301. Council noted that COMESAMIA was undertaking investigation of foundries in the region, working toward establishing e-maintenance on the industry and looking at possibilities of setting-up environmental web-site to encourage cleaner production. COMESAMIA would also develop a curriculum on the industry in conjunction with colleges and universities to enhance training of metallurgical and mining industries in COMESA. Council noted that COMESAMIA was looking for assistance to undertake studies to determine the competitiveness of the industry.

Decisions


a. COMESAMIA should address issues of investment by identifying promoters of mini-steel plants and then work on inter-partnership agreements with investors in India and other countries; and

b. the Secretariat should, where possible, assist COMESAMIA to implement the e-maintenance programme.

(g) Court of Justice

303. Council took note of the report of the COMESA Court of Justice. Council was informed that the Court heard and determined two urgent Preliminary Applications at its sitting in November 2002. Council was also informed that the Court has scheduled a sitting for April 2003 to hear and determine cases filed in its Registry.

304. Council was informed that the Court would like a decision on the location of the Court to be taken expeditiously. The Court hopes that this will enhance the important and impartial role, and the autonomy, of the Court in the discharge of its functions.

305. Council was also informed that the procedure for accessing the USAID financial assistance to the Court in implementing its education projects is in progress. These projects are the publication of a Charter for COMESA Court of Justice Users, and the holding of seminars to educate stakeholders on the jurisdiction of the Court and how the Court could be accessed. Regarding the seminars, it is intended to conduct them sometime this year on a regional basis so as to facilitate easy participation by as many stakeholders as possible in all the member States. A related implementation work plan for the two projects has been submitted to USAID for its consideration and approval and an implementation letter issued for the projects to proceed. The Court, however, will need to be adequately resourced by Member States for it to initiate the projects.

(h) African Trade Insurance Agency (ATI)

306. A representative of the African Trade Insurance Agency (ATI) informed Council about the activities of the Agency. Council noted that the ATI had started operations in April 2002 to provide political and credit risk cover on the trade and financial transactions. Council recalled ATI's

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benefits and the new developments on product diversification. The new products include, non-payment cover for government and non-government buyers, working capital finance guarantee and foreign direct investment insurance. ATI is poised to issue its first insurance policy by end of March 2003.

307. Council noted that Madagascar has recently signed the ATI Agreement bringing the number of participating States to eight. The PTA Bank and ZEP-Re are set to become the third and fourth corporate shareholders in the Agency following Gerling-NCM and COMESA.

308. To support membership in ATI, the World Bank has indicated its willingness to extend financial assistance to new, eligible member countries for the purpose of providing underwriting capacity.

Decision


a. member States that have not joined ATI be urged to do so to take advantage of the benefits offered by ATI; and

b. the member States that participate in ATI should encourage the business community and investors to take full advantage of the ATI facility.

(a) Brief by Cooperating Partners (Agenda item 12)

(i) United Nations Economic Commission for Africa (UNECA)

310. The representative of the United Nations Economic Commission for Africa (UNECA) highlighted the long standing and mutual beneficial relations between COMESA and ECA. He further informed the meeting that the ECA had established two technical offices in Kigali and Lusaka respectively to support the COMESA agenda in the following areas: transport and trade facilitation; infrastructure and human resource development; and food security. He also informed Council that the ECA Kigali Office had launched the Great Lakes Initiative for Recovery Growth, Stability and Peace, with focus on infrastructure development; human and resource development (health and education); food security; and institutional reforms and was providing technical support to the Northern Corridor countries. Finally, he alluded to the work by the ECA on EPAs and WTO.

ii. Africa Regional Organisation for Standardisation (ARSO)

311. The representative of the Africa Regional Organisation for Standardisation (ARSO) informed Council that ARSO was interested in harmonising standards, especially in COMESA. He further informed the meeting that ARSO was developing African standards and providing training to promote the realisation of implementation of intra-Africa trade as emphasized by NEPAD. The harmonisation and development of standards would contribute to sustainable development and the protection of environment.

iii. Arab Bank for Development of Africa (BADEA)

312. The representative of BADEA confirmed that BADEA is ready to cooperate with COMESA in achieving its economic integration efforts particularly in the areas of project and technical assistance in infrastructural development, poverty alleviation and gender issues. BADEA is able to provide concessional loans, technical assistance in the form of grants and financing of trade.

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iv. United Nations African Institute for Economic Development and Planning (IDEP)

313. The Director of IDEP reported that IDEP was established by the United Nations General Assembly to provide training for economic policy makers, conduct policy relevant research and provide advisory services in Africa. IDEP provides services focussed on the African development agenda including the areas of regional integration, multilateral negotiations and Africa's growth strategy. IDEP is pleased to have commenced a programme to assist in the design of quantitative economic policy tools in the form of macro-econometric and consistency models for each COMESA Member State and of region-wide COMESA regional econometric models. The training is expected to take place at the COMESA Secretariat.

v. Intergovernmental Authority on Development (IGAD)

314. The representative of IGAD highlighted the ongoing cooperation between the two institutions as contained in the Memorandum of Understanding between them. He noted that the two institutions have a common agenda within NEPAP and the IRCC arrangement. He observed that IGAD is pleased to cooperate with COMESA in regional economic integration for the same Member States.

vi. United Nations AIDS Programme (UNAIDS)

315. The UNAIDS representative, provided a statistical report of the devastating of HIV/AIDS pandemic of the Sub-Saharan Africa and particularly COMESA member States. Given this situation, he observed that HIV/AIDS was one of the biggest challenges that COMESA faces in meeting its economic cooperation and development goals/objectives. It was noted however that collaboration between UNAIDS and COMESA has started, beginning with a programme on mainstreaming gender and HIV/AIDS into COMESA activities and programmes.

vii. World Meteorological Organisation (WMO)

316. The WMO representative reported that WMO is ready to strengthen national meteorological and hydrological services and develop regional and national early warnings that will help establish effective natural disaster management institutions.

viii. International Civil Aviation Organization (ICAO)

317. The representative of ICAO informed Council that ICAO was pleased to cooperate with COMESA in promoting and ensuring the safety, security and efficiency of civil aviation in COMESA. He reported that ICAO would be pleased to assist with the meeting proposed by Madagascar for implementation of the CNS/ATM systems in COMESA. Finally, he informed Council of the forthcoming ICAO international conferences on air transport liberalisation and requested the Member States to attend those conferences.

(ix) United States Agency for International Development (USAID)

318. The Director of USAID/REDSO also made a statement. Council noted that USAID was pleased to be a partner of COMESA to help promote economic development and regional trade integration in Eastern and Southern Africa. He reported that since 1998, USAID's assistance to COMESA had focused on five areas: regional trade development; public-private sector business partnerships; regional telecommunications policy harmonisation; institutional strengthening; and governance and conflict resolution. To promote trade capacity building in sub-Saharan Africa, President Bush announced the Trade for African Development and Enterprise Initiative that has led to the opening of three Regional Hubs for Global Competitiveness in Accra, Gaborone, and Nairobi. USAID congratulated COMESA for its effective participation at the AGOA Forum in

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Mauritius in January. USAID was encouraged that the COMESA Free Trade Area was already showing signs of success in such a short time after its launch and looked forward to seeing the COMESA FTA expanded to include all Member States.

319. Council noted that USAID considered HIV/AIDS and gender as critical issues affecting trade development in the region, and commended COMESA's efforts to implement policies related to HIV/AIDS and gender. USAID looked forward to continuing to support COMESA in addressing development challenges and achieving regional economic integration in East and Southern Africa. The Director also thanked COMESA and the Government of Sudan for the hospitality given to the USAID delegation.

(x) European Commission (EC)

320. The representative of the European Commission recalled the longstanding co-operation between COMESA and the EC. Over the last year relations between the COMESA region and the EC were marked by two significant events. The first one concerned the signing of the Regional Indicative Programme (RIP) for an amount of €223 million for the period 2002 - 2007 providing support notably in the areas of economic integration and trade, natural resources, and transport and communications. The second one concerned the launching of the negotiations for the Economic Partnership Agreements which will replace the current EU-ACP trade arrangements as from 2008. The EC representative stressed the particularly active role the COMESA Secretariat played in the drafting of the RIP as well as in the region's preparation for the Economic Partnership Agreements. He further underlined the necessity of implementing COMESA's ambitious policy agenda if the region's development goals were to be achieved.

(xi) India

321. The representative of the Government of India made a statement. He indicated that his government had decided to strengthen cooperation programmes with COMESA. In this respect, government of India had made available a line of credit of over US $200 million through NEPAD. Council also noted that through the EximBank of India a US $25 million was made available to the PTA Bank. Council further noted that the government of India was willing to share its experience with COMESA Member States in agriculture, technology transfer and health, among others. He indicated that India had developed low cost generic drugs, which it could avail to COMESA Member States. He, therefore, emphasized on the need for COMESA to harmonise drug registration procedures.

(xii) African Development Bank (AfDB)

322. The representative of African Development Bank made a statement. He congratulated the Government of Sudan and COMESA Secretariat for the successful arrangements made for the meetings. He pointed out that COMESA was an important building block to the African Union and was glad that it was making great strides in achieving vision on African integration. He pointed out that ADB maintains very close cooperation with COMESA, which was sealed in 1999 when the two organisations signed a cooperation agreement. ADB has so far provided funding totalling about US$4.6 million to COMESA. Council noted that the ADB current direct support to COMESA was US$1.5 million grant for public procurement reforms. Council also noted that ADB was considering some COMESA pipeline projects including an agriculture trade project and seminar for COMESA staff.

323. Finally, Council noted that ADB was looking forward to working with COMESA on creating an enabling environment aimed at attracting new investment and expanding productive base.

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Report of the Bureau of the Council of Ministers (Closed Session) (Agenda item 13)

324. The Council considered the report of the Bureau of the Council on Closed Session issues as contained in document No. COM/CB/IV/2. The report of the Council is contained in separate document No. COM/CB/IV/2.

Report of the Fifteenth Meeting of the Council of Ministers on Administrative and Budgetary Matters (Agenda item 14)

325. Council considered the report of the Fifteenth Meeting of the Council of Ministers on Administrative and Budgetary Matters contained in document No. COM/IC//XV/6(a). The report of Council is contained in a separate document No. COM/CM/XV/2(a).

Any Other Business (Agenda item 15)

Report of the First Strategic Leadership Workshop

326. Council recalled that the First Strategic Leadership Workshop was organised for the Council of Ministers, Permanent Secretaries, Heads of COMESA institutions and COMESA Permanent Representatives in November 2002.

327. The Workshop enabled participants to review COMESA strategies for more effective implementation, monitoring and evaluation of the COMESA integration programmes.

328. The major outputs of the Strategic Leadership Workshop were:

a. identification of the major challenges facing COMESA in the face of changes in the new international economic landscape. These challenges were the expiry of the Cotonou Agreement in year 2007; the ACP-EU negotiations on Economic Partnership Agreements, phasing out of the Multi Fibre agreement in December 2004; European Union expansion; implementation of AGOA; accession of China to the WTO; the DOHA Development Agenda; the reform of the EU Common Agricultural Policy; the Everything But Arms initiative; and among other issues;

b. identification of the core strategic issues for COMESA to advance the regional integration agenda. These were Infrastructure Development, Capacity Building, Investment, Peace and Security, Political Commitment, Policy Harmonisation, Supply Constraints, Forthcoming Negotiations and Technology. Of these, Peace and Security and Investment were identified as the most important strategic issues for the attainment of the COMESA vision while Infrastructure Development, Capacity Building and Supply Constraints were identified as the next three most important strategic issues. The Council further noted that Political Commitment, Forthcoming Negotiations and Policy Harmonisation were among the most performing strategic issues while Technology was the least performing one;

c. identification of the critical drivers for an effective national institutional set-up to implement, monitor and evaluate COMESA programmes which were Policy Formulation, Implementation, Coordination, Research and Development, Communication and Monitoring and Evaluation; and

d. intensification of interaction between and among Member States to promote intra-COMESA trade and investment.

Decisions

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329. Council decided on the following aspects for implementation of the findings of the Strategic Leadership Programme:

a. the identified core strategic issues of Infrastructure Development, Capacity Building, Investment, Peace and Security, Political Commitment, Policy Harmonisation, Supply Constraints, Forthcoming Negotiations and Technology be factored in the COMESA Work Programmes;

b. Member States should strengthen their national institutional set ups, taking into account the country's particularities, paying attention to the six critical drivers identified during the Strategic Leadership Workshop. These drivers are Policy Formulation, Implementation, Coordination, Research and Development, Communication and Monitoring and Evaluation; and

c. the Secretariat should assist the Member States to revamp their national institutional set ups.

Adoption of the Report and Closure of the Meeting (Agenda item 16)

330. The meeting adopted its report with modifications.

Vote of Thanks

331. The leader of the delegation of Madagascar, Honourable Ranjeva Marcel, Minister of Foreign Affairs, moved a vote of thanks on behalf of all the delegates and on his own behalf to the Chairman for his able leadership and wisdom. He thanked the government and people of Sudan for their warm hospitality. He also thanked members of the Bureau, the Secretary General and the Secretariat for the high quality of work and excellent services provided during the meeting.

332. He noted that COMESA's role in regional integration was vital and advised the delegates that the decisions of the meeting should facilitate the implementation of the multiple challenges ahead. He further noted that Member States should use the FTA as a tool to promote South-South cooperation.

333. Honourable Ranjeva Marcel reported that the President of the Republic of Madagascar, His Excellency Marc Ravalomanana, asked him to convey his apologies, as he was unable to attend the Summit. However, he wished the delegates best wishes in their deliberations. Council further noted Madagascar's appreciation for the support given by COMESA during their internal crisis.

334. In conclusion, the Honourable Minister pledged Madagascar's support to the COMESA agenda and announced that during the Summit Madagascar would be signing the Protocol on Free Movement of Persons, Labour, Services, Right of Establishment and Residence and the Protocol on COMESA Fund. Madagascar is ready to become a shareholder in COMTEL.

335. The Chairman of Council closed the meeting by thanking all the delegations for their cooperation.

Decision

Council at Nairobi in May 1999 (Doc. COM/CM/VII/3) paragraph 210 adopted the regulations for the implementation of the liberalised air transport industry on the basis of which COMESA Legal Notice No. 2 was issued.

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Decision

Council at its Tenth Meeting held in December 2001 at Lusaka (Doc. COM/CM/X/2) paragraph 29 decided that “COMESA air transport competition rules be developed as soon as possible”.

Decision

The Council at its twelfth meeting held at Lusaka in November 2001 (Doc. COM/CM/XII/2) paragraph 38 established a CNS/ATM Working Group to undertake studies and propose institutional scenarios for implementing the CNS/ATM Systems Project.

Decision

The Tenth Council Meeting held at Lusaka in December 2000 (Doc. COM/CM/X/2) paragraph 47 decided that member States that have not yet implemented some of the instruments in the Road Transit Transport Facilitation Programme should do so as soon as possible.

Decision

Council at its Tenth Meeting held at Lusaka in November 2000 (Document COM/CM/XII/10 at paragraph 54) decided that: “Member States should consider concessioning existing railways and attracting private sector funding for the development of new railways lines on the basis of BOT or BOO”

Decisions

The Council at its twelfth meeting in Lusaka in 2001 urged member States to:

i. Facilitate the commercialisation of ports through methods such as concessioning or subcontracting certain functions in order to make ports more efficient by removing cross subsidisation of operating units and encouraging competition among subcontractors; and

(ii) Encourage ports to adopt uniform formats in the presentation of standard port reports/statistics in their Websites so that value-added information can be provided to their customers and stakeholders.

Decision

Council at its Twelfth Meeting held at Lusaka in November, 2001 (Doc. COM/CM/XII/2) paragraph 83 decided that: “That a working group made up of stakeholders from member States be established to prepare the successor project and that ACIS Rail Tracker be implemented in Congo D. R.”

Decision

The Third COMESA Summit held in Kinshasa in June 1998 “endorsed the decision of the Council on the establishment of a Private Limited Liability Company, to be known as COMTEL to build, manage and operate the regional Telecommunications Interconnectivity Network and adopted a Resolution on the formation of the Company”.

Decision

Council at its Ninth Meeting held in Mauritius in May 2000 (Doc. COM/CM/X/2) paragraph 66 decided that: All member States to participate in the COMESA Telecommunications Policy and Regulatory Harmonisation Programme

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Decision

Council at its twelfth Meeting held at Lusaka in November 2001 (Doc. COM/CM/XII/2) paragraph 66 directed that “The Secretariat should formulate proposals for investment using information on priority projects in roads, rail, ports, civil aviation and telecommunications to be provided by member States”

Decision

The Council at its Tenth Meeting in Lusaka held in November, 2000 directed the Secretariat to formulate a Comprehensive Strategic Programme in consultation with the Member States, WMO and other regional organisations.

Report and Decisions: Fifteenth Meeting of the COMESA Council

Documents

Transcript of Report and Decisions: Fifteenth Meeting of the COMESA Council