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Africa's biggest trade bloc agrees tax system - Daily News Egypt

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Africa's biggest trade bloc agrees tax system

Reuters NAIROBI: Africa s biggest trade bloc Comesa approved a common external tariff system on Wednesday, clearing a major hurdle for a customs union intended to boost trade in some of the world s poorest nations. The Common Market for Eastern and Southern Africa (Comesa), which represents 20 countries, also urged member states who have …


Reuters

NAIROBI: Africa s biggest trade bloc Comesa approved a common external tariff system on Wednesday, clearing a major hurdle for a customs union intended to boost trade in some of the world s poorest nations.

The Common Market for Eastern and Southern Africa (Comesa), which represents 20 countries, also urged member states who have yet to join its free trade area to sign up before the planned launch of the customs union in 2008.

We must harden our resolve to desist from engaging in practices aimed at protecting our individual markets, said Kenya s President Mwai Kibaki, the Comesa chairman.

Although such interventions may yield short-term relief to our individual economies, they can cause serious distortions in the larger Comesa market and erode investor confidence, he said in a speech ending a two-day summit.

Under the agreement to harmonize the tax regimes, Comesa countries will pay zero tax for capital goods and raw materials, 10 percent for intermediate products and 25 percent for finished goods.

Kibaki said the bloc, which stretches from Egypt to Zimbabwe, had yet to finalize details of a transitional period for Comesa countries to make tariff adjustments.

Kenya and other Comesa members Burundi, Comoros, Djibouti, Egypt, Libya, Madagascar, Malawi, Mauritius, Rwanda, Sudan, Zambia and Zimbabwe have joined the free trade area.

The remaining seven – Angola, Democratic Republic of Congo, Ethiopia, Eritrea, Seychelles, Swaziland and Uganda – are yet to make a decision, citing loss of revenues and competition from more advanced economies.

Sixteen Comesa members are in talks with the European Union to replace a preferential market access deal that contravenes World Trade Organization rules.

On the political front, the meeting endorsed the results of elections in the Democratic Republic of the Congo and Madagascar, and urged a political settlement to the conflict in Sudan s volatile Darfur region.

The next summit will be held in Harare, Zimbabwe in 2008.

Topics: Aboul Fotouh

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