Theme publications: African regional integration

Will the AfCFTA generate NTB related Disputes?

Trade Briefs ~ Gerhard Erasmus

When private sector stakeholders are encouraged to report instances of encountering NTBs on a public monitoring platform such as tradebarriers.org, the assumption is that their complaints will be resolved through appropriate remedial action. The frequently encountered NTBs involve customs operations and border documentation requirements, rules of origin documentation, pre-shipment inspections, sanitary and phytosanitary measures (SPS) and Technical Barriers to Trade (TBTs).

The manner in which African countries trade amongst themselves (the bulk of the exported goods are transported by road and are cleared by different national border agencies and authorities) suggests how many urgent NTB-related problems should be addressed: Corridor management and transport regimes should be harmonized, one-stop border posts should be established and e-filing of clearance documentation should become standard practice.


Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the author and do not purport to reflect the views of tralac.

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The African Continental Free Trade Area: A tralac guide | 7th edition

tralac

This booklet provides a handy guide on the African Continental Free Trade Area (AfCFTA) and how it fits within Africa’s broader development agenda – the architecture of the AfCFTA Agreement, what the Agreement covers, institutional arrangements, committees and other AfCFTA initiatives. The booklet also offers an overview of intra-African (based on available data for 26 countries to end August 2020) and intra-REC trade in goods (agricultural trade, trade in commodities, non-commodity and non-agriculture trade), intra-African tariffs and MFN tariffs on key intra-African imports, and trade in services and trade facilitation performance.

Further information on the AfCFTA negotiations, as well as the legal texts of the AfCFTA Agreement and ratification status of the legal instruments, is available on tralac’s AfCFTA resources page.

Download:  pdf AfCFTA: a tralac guide | 7th edition, August 2020 (7.14 MB)

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged.

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Governance under the AfCFTA: Linkages between Implementation and Gains

Working Papers ~ Gerhard Erasmus

There have been several studies about the extensive economic gains that will be generated by the AfCFTA, despite the fact that essential aspects (the extent and tempo of the tariff reductions, how strict or flexible the rules of origin will be and what conditions will govern trade in services) must still to be agreed. The outstanding negotiations are about complex technical matters and involve concessions among a large number of countries at very different levels of economic development. The early predictions about remarkable outcomes are based on assumptions that may fail to materialize.

This Working Paper discusses the AfCFTA as it is, not whether it has an optimal design. The reason is that the legal instruments adopted for the purpose of founding the AfCFTA reveal rather clearly what the sovereign Member States of African Union (AU) have been prepared to accept as the future rulebook for intra-African trade and integration. There are no supra-national institutions to enforce the rules and to monitor compliance. This is a member-driven arrangement.

It is important to form an early understanding of how things will unfold once the outstanding negotiations are concluded and trade under AfCFTA rules and preferences will commence. Private sector players have to prepare for the new dispensation, investors must weigh opportunities and decide about investment opportunities and destinations, while governments have to get their house in order. Specific questions then arise and need to be discussed: How will actual trade governance and regulatory oversight be undertaken and by whom? What remedies will be available when obligations are not respected or when Governments want to postpone or suspend compliance? How to deal with unfair trade practices? And what will happen to existing trade patterns, distribution networks, logistical services and markets in the RECs? How will private parties (the importers, exporters, freight forwarders and investors in the engine room) be affected and what new opportunities will arise with respect to trade in goods and services?


Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the author and do not purport to reflect the views of tralac.

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How will AfCFTA State Parties manage Trade Relationships with Third Parties?

Working Papers ~ Gerhard Erasmus

The African Continental Free Trade Area (AfCFTA) is anchored in legal instruments regulating the functioning of this ambitious arrangement. As the AfCFTA deal presently stands, trade in goods and trade in selected services areas will be liberalized. Trade under AfCFTA preferences will presumably start in 2021, once the outstanding negotiations on tariff reductions, rules of origin and the conditions applicable to trade in the five priority services areas are completed.

Since a Free Trade Area (FTA) is an integration arrangement in which the Member States retain policy space over their tariff and trade policies, the AfCFTA State Parties will remain responsible for their own choices and decisions about trade with third parties. They are not precluded from concluding external trade agreements. Neither does the AfCFTA Agreement provide for supra-national institutions or bodies with powers to speak on behalf of the collective when it comes to such trade agreements. Those AfCFTA State Parties that are members of Regional Economic Community (REC) FTAs will have to consider additional legal requirements; the relevant provisions in the respective REC instruments. And sometimes these States belong to more than one REC at the same time. Overlapping REC membership is ubiquitous.

This Working Paper discusses claims that the AfCFTA will be able to speak with one voice when the State Parties conclude trade agreements with third parties, and that AfCFTA State Parties would discredit the spirit of the AfCFTA when concluding their own external trade agreements. Kenya’s decision in early 2020 to start trade negotiations with the United States (US) has caused a stir in some circles. The relevant implications of the USKenya initiative will be examined. The question to be answered is whether the AfCFTA regulates, in some form or manner, the freedom of the State Parties to conclude trade agreements with Third Parties, and if so, under what conditions. When a particular AfCFTA State Party decides to conclude an external trade agreement, the more pertinent question might be whether such an initiative would be compatible with the rules of the REC or RECs of which it is a party.


Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the author and do not purport to reflect the views of tralac.

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Access to justice and curial authority in COMESA, the EAC and ECOWAS

Working Papers ~ Dawid van Wyk

Two recurring themes in discussions of the courts of justice of African regional economic communities (RECs) are that African states do not litigate against each other (except when they differ about borders), and the dominance of human rights in the jurisprudence of courts that are supposed to hear trade or commercial disputes, thereby contributing to regional integration.

This Working Paper shares the view that human rights and economic integration should not be seen as antagonist or worse, as mutually exclusive. Strictly speaking, the one does not exist without the other, which does not mean that they always sit comfortably together, or that there are no pitfalls in the prominence of human rights in economic community courts. Ultimately, the question is whether these courts’ formal legal authority evolves into authority in fact, or de facto authority.

The purpose of this paper is to look at recent jurisprudence of the three regional courts – in the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC), and the Economic Community of West African States (ECOWAS) – to see whether the scholarly consensus remains: that the dockets of these courts contain few cases involving tariffs, trade barriers, or other integration law issues. The question is whether human rights and trade intersect at some point in the jurisprudence of the courts, and if not, the possible reasons.


Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the author and do not purport to reflect the views of tralac.

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Completing and Implementing the AfCFTA in difficult times

Working Papers ~ Gerhard Erasmus and Trudi Hartzenberg

Realising the African Continental Free Trade Area (AfCFTA) was never going to be easy. The challenges are about agreeing on a design for integrating a large number of economies at very different levels of development, the nature of the obstacles hindering intra-African trade, the prevalence of governance blockages, and the economic policy landscape to be traversed. Pushing for the early entry into force of the AfCFTA Agreement before essential aspects had been negotiated didn’t help. The COVID-19 pandemic has further derailed the workplan for completing the outstanding AfCFTA negotiations.

The AfCFTA Agreement and the Protocols on trade in goods and services, as well as dispute settlement, have entered into force more than a year ago. However, essential aspects have not yet been agreed. This is not entirely surprising. The outstanding negotiations are about complex tariff reductions, rules of origin and conditions for trade in services in the priority areas. As long as the instruments for these disciplines remain outstanding, AfCFTAbased preferential trade is not possible. The officially declared target date of 1 July 2020 has not been met. It has recently been suggested that trade under AfCFTA rules could (perhaps) start at the beginning of 2021. However, there is no formal decision yet about this important date.

This paper discusses the steps still required to finalise the AfCFTA framework and to implement the relevant technical aspects as provided in or required by its legal instruments. The discussion commences with an overview of where the process stands and what is still outstanding.


Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the author and do not purport to reflect the views of tralac.

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African Continental Free Trade Agreement – what can the AfCFTA add to trade liberalisation if the regional economic communities remain?

Trade Briefs ~ Willemien Viljoen

In 2018, only 15 per cent of Africa’s exports were intra-Africa, of which most were exports among African countries which are members of the same regional economic communities (RECs). This can be due to preferential tariffs applicable to intra-REC imports if the countries are party to the customs union or free trade agreement (FTA) of the REC, geographic proximity and supply-side factors.

In 2018, almost all intra-Africa imports into Zimbabwe and Eswatini were from other REC member states; of South Africa’s intra-Africa imports only 42 per cent were sourced from outside the Southern African Customs Union (SACU) and the Southern African Development Community (SADC), while imports by Niger, Gambia and Ivory Coast sourced from outside the Economic Community of West African States (ECOWAS) and the Community of Sahel–Saharan States (CEN-SAD) respectively accounted for only 8 per cent, 2 per cent and 9 per cent of the countries’ intra-Africa imports.

Given the importance of trade between existing REC member states, what can the African Continental Free Trade Agreement (AfCFTA) add to intra-Africa trade liberalisation if the RECs remain in place? The level of trade between African countries not part of the same regional arrangement is low, concentrated in limited tariff lines and often goods already imported duty-free.


Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the author and do not purport to reflect the views of tralac.


INFOGRAPHICS

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Monitoring Regional Integration Yearbook 2019/20: Agriculture and food security in Africa

Books ~

If there is one thing which the current Covid-19 pandemic has done, it is to highlight the issue of food insecurity on the African continent and illustrate the interdependence of food (in)security on food production systems (agricultural production and the environment within which it is produced) and access to food (trade, tariff and non-tariff barriers, prices and market conditions).

The pandemic and measures taken to curtail its spread have compounded food insecurity on the African continent. Food insecurity challenges were already evident due to previous and ongoing extreme climatic conditions (floods and droughts in southern Africa), pests (locusts in east Africa), civil unrest, slow economic growth and high levels of unemployment and poverty.

Lockdown regulations across the world have led to a decrease in employment, levels of disposable income and export-earnings and an increase in food waste, food price increases and trade distortions leading to a decrease in access to food, increasing food insecurity. Africa’s projected population increase for the next three decades will compound the continent’s food insecurity.

Given the current state of the food production system, the question is how will it be possible to improve physical and economic access to sufficient food, while also ensuring the sustainability of Africa’s food and agricultural systems? If these systems remain stagnant in a changing world, persistent food insecurity is highly likely. Efficiency and sustainable food production can be improved through the uptake of new technologies and production methods. Addressing fragmented agricultural markets through regional integration efforts (reducing high agriculture and food tariffs and non-tariff barriers to trade and improving cross-border trade) can enable Africa to feed its growing population. Sustainable production and food systems that are more productive and less invasive on the natural environment are important to improve access of food across the continent.

This book covers various topics related to agriculture and food security challenges faced by African countries. Africa’s population has been increasing and is estimated to reach 1.2 billion by 2050. With the population increase there have been significant changes in the pattern of consumption, but undernourishment in Africa is still prevalent. To improve food security and alleviate malnutrition requires an increase in access to food. More food production will require increased land and other agricultural input use, or increasing productivity or greater imports. However, the supply of land and agricultural inputs is finite. In the long-term, regional integration efforts and technology investments can make the most practical contributions to alleviate food security concerns. Under the African Continental Free Trade Agreement (AfCFTA), reducing tariffs and non-tariff barriers to intra-Africa food trade, trade facilitation measures and the promotion of investment in agricultural development, innovation and technology will increase access to food. Technology, including changes in agricultural management practices, irrigation technologies, alternative crop breeding strategies, drones and satellites can increase the productivity of existing resources by increasing yields and feeding the population in a sustainable manner.


© 2020 tralac and The Government of Sweden

All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages.

The support of The Government of Sweden in the publication of this book is acknowledged. The Swedish International Development Cooperation Agency (Sida) does not necessarily share the views expressed in this material. Responsibility for its contents rests entirely with the authors.

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How will the AfCFTA live up to all the Expectations?

Working Papers ~ Gerhard Erasmus

Many commentators expect (and argue) that the African Continental Free Trade Area (AfCFTA) will be the harbinger of far-reaching and swift change in and for Africa. This continental trade regime will bring about economic, commercial, integration and political outcomes not seen before. The AfCFTA is also expected to serve as a new platform for engaging the outside world. It is assumed that this Free Trade Area (FTA) already exists, because an Agreement establishing the AfCFTA has entered into force. Many applaud the fact that it took a relatively short period of time for the African Union (AU) to wrap up the process for adopting the necessary legal instruments.

The AfCFTA is a very necessary initiative. It could make a much-needed contribution to intra-African trade governance by improving customs administration, tackling non-tariff barriers, and establishing structures for regulating intra-African trade in services. This will take time, require domestic reforms within the State Parries as well as dedicated and coordinated action by their governments. Their efforts should preferably be anchored in well-designed and legally binding undertakings.

When assessed from this practical perspective, expectations about how the AfCFTA will realise its goals should focus on those aspects which will address long-standing challenges associated with overlapping membership of regional trade arrangements, domestic capacity deficits, inefficiency, corruption and bad governance. Establishing a comprehensive and efficient partnership for the whole continent will be a remarkable accomplishment.


Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the author and do not purport to reflect the views of tralac.

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Trade in services negotiations under the AfCFTA: Q&A

tralac

The Services Protocol to the African Continental Free Trade Area (AfCFTA) Agreement entered into force on 30 May 2019, along with the other parts of the consolidated text. However, the Protocol is incomplete, and it will be some time before any services sector commitments are made under the AfCFTA, and thus before any actual services trade can occur under this Agreement. Furthermore, it is not guaranteed that actual services sector liberalisation will be achieved. This is because countries typically only make commitments that bind existing practices when positive listing services commitments. The indications we saw at an African Union Services Signalling Conference were that this would be the approach.


Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. 

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