The proposed AfCFTA online non-tariff barrier reporting, monitoring and eliminating mechanism
How will it work? What are stakeholders expecting from this mechanism?
The AFCFTA enters into force on 30th May 2019 with high expectations from the continental stakeholders particularly in the area of trade facilitation. Stakeholders who include private sector, cross border traders, governments and vulnerable groups across Africa and indeed the common citizen have pinned their hopes on improved standards of living through increased trade.
As a response to the fundamental question from stakeholders, “what is in it for us?”, the African Union Commission (AUC) has carefully supported Member States in the negotiation of the necessary legal instruments. These cover not only substantive issues such as rules of origin, tariff concessions on trade in goods, but also an online non-tariff barrier monitoring and elimination mechanism, digital payments and settlement platform and the establishment of the African Trade Observatory. It is important to note that trade within regional economic communities will continue, recognizing their relevance to boosting overall trade among African countries.
The forthcoming Trade Ministers meeting scheduled from 20th May – 8th June 2019 in Addis Ababa will be important as Member States prepare for the entry into force of the AfCFTA on 30 May. We take a closer look at the Continental Online Reporting, Monitoring and Eliminating Mechanism whose primary catalytic role is to introduce efficiency in the management and resolution of Non-Tariff Barriers and other obstacles to trade with a view to eliminating them. The AUC, with technical support from UNCTAD and funding from the German Government are submitting the technical proposal on the establishment of the Continental Online Reporting, Monitoring and Eliminating mechanism for consideration and approval by African Ministers of Trade (AMOT) through the negotiating processes during the upcoming Addis Ababa meetings. This proposal was considered and recommended by an UNCTAD organized workshop of officials from the 8 RECs, designated as the building blocs of the AfCFTA, in February 2019. As we wait for the AMOT decision, we consider the proposed structure, content and the relationship of the AfCFTA mechanism, to the existing REC mechanisms for elimination of NTBs.
The nature and institutional arrangements for the Continental Online reporting, monitoring and eliminating Mechanism are in Annex 5 of the Agreement. This Annex on NTBs stipulates that mechanism shall be anchored on the existing best practice mechanisms obtaining in the RECs. Currently there are two online mechanisms; the Tripartite Online Reporting, Monitoring and eliminating mechanism, for East and Southern Africa (the Tripartite Region), hosted on tradebarriers.org and the Borderless Alliance Reporting and Monitoring Mechanism, for West Africa, hosted on tradebarrierswa.org. Rather than competing or subsuming the RECs mechanisms, the continental mechanism brings an incremental value to the AfCFTA and RECs’ integration agenda. It consolidates and fills the missing link towards elimination of Non-tariff Barriers among and between eight regions (CEN-SAD, COMESA, EAC, ECCAS, ECOWAS, IGAD and SADC)
Having interrogated the existing databases (including those of the International Trade Centre, UNCTAD and the World Trade Organisation) and other mechanisms, and pursuant to the realization of the AfCFTA, the proposed continental mechanism assumes the supervisory, coordination and supportive role to ensure complete elimination of NTBs in Africa. This is achieved though building an integrated real-time mechanism based on the existing ones in the Tripartite and ECOWAS regions. The adaptation of the existing RECs NTBs eliminating instruments and institutional arrangements at the continental level through Annex 5 of the Agreement provides a solid foundation for the mechanism. An inter-REC - AFCTA relational model which maintains the REC mechanisms and establishing new ones where they do not exist is proposed.
The RECs will continue to manage and resolve NTBs among their member states while the Continental mechanism will address Inter – REC Non-tariff barriers. The model is based on assumption that the improved AfCFTA mechanism shall, to the greatest extent possible utilize the existing templates for the Tripartite and the Borderless Alliance mechanisms. The Continental mechanism will facilitate any upgrades necessary to sustain the relationships between the existing and any new mechanisms in RECs in order to maintain the mutually beneficial relationships between the mechanisms for effective continent-wide NTB elimination.
The continental mechanism will contribute to facilitate trade that is hampered by NTBs. For example, in 2017, a South African company submitted a complaint to tradebarriers.org, about an NTB experienced at the Port in Ghana. Despite the existence of the tradebarrierswa.org in ECOWAS, this problem could not be considered because of the missing links (between the two systems) to coordinate and facilitate resolution of the problem. The introduction of the continental mechanism therefore plugs such loopholes. It is desirable that the Continental mechanism be rules – based and Member State supported. The private sector (formal and informal) needs systemic solutions to NTBs, and effective enforcement of decisions to eliminate NTBs and access to dispute resolution when necessary. Institutions at continental, REC and national levels will have a role to play to make this happen. It is critical that the mechanism responds to the specific needs of formal private sector, small scale and informal traders, truck drivers, women and youth by introducing appropriate reporting and monitoring tools. It should borrow heavily from the good attributes of existing REC mechanisms and contribute towards strengthening capacity in existing REC mechanisms at the same time facilitating development of new ones where they do not exist.
This is a developing story as we approach the launch of the Continental NTBs Reporting, Monitoring and Eliminating Mechanism at the forthcoming AfCFTA Summit in July 2019.
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