Building capacity to help Africa trade better

Making the AfCFTA and the RECs work


Making the AfCFTA and the RECs work

Making the AfCFTA and the RECs work

The Regional Economic Communities (RECs) are the official pillars of the African Economic Community (AEC). The AEC Treaty (the Abuja Treaty) came into force in May 1994. It provides for the AEC to be set up through a gradual process, through coordination, harmonisation, and progressive integration of the activities of the RECs.[1]

Apparently there have not been official assessments as to how this formula has worked and how the RECs have in fact advanced the arrival of the AEC. The UN’s Office of the Special Advisor on Africa (OSAA) has issued a document dealing with developments up to 2015. It describes the role of the RECs in the future tense and also ascribes to them a responsibility for peacekeeping: “Beyond their role in peace and security, RECs have the immense challenge of working with governments, civil society and the AU Commission in raising the standard of living of the people of Africa and contributing towards the progress and development of the continent through economic growth and social development. The RECs will be highly essential and instrumental for the effective implementation, financing, monitoring and evaluation of Agenda 2063 and its flagship programmes, at particularly the regional levels.”[2]

In terms of the AfCFTA Agreement, (adopted in 2018) the RECs’ Free Trade Areas are now also the building blocks of the AfCFTA.[3] Is this a new function or a continuation of an old one? This question is not answered by the AfCFTA instruments; it does not seem to require a new explanation. However, the AfCFTA Agreement does provide important clarifications; the AfCFTA introduces parallelism, the acquis, and says expressly that REC Free Trade Areas (FTAs) are “building blocs for the AfCFTA[4]. It does not require them to become CUs in the process. The only reference to a customs union appears in the list of General Objectives, which includes “to lay the foundation for the establishment of a Continental Customs Union at a later stage”.[5]

Article 19 of the AfCFTA Agreement provides that the AfCFTA State Parties “that are members of other regional economic communities, regional trading arrangements and custom unions, which have attained among themselves higher levels of regional integration than under this Agreement, shall maintain such higher levels among themselves. Article 8(2) of the Protocol on Trade in Goods states that “State Parties that are members of other RECs, which have attained among themselves higher levels of elimination of customs duties and trade barriers than those provided for in this Protocol, shall maintain, and where possible improve upon, those higher levels of trade liberalisation among themselves. (Emphases added.)

Two other AfCFTA Principles should be mentioned. Article 5 says the AfCFTA shall also be governed by the preservation of the acquis and best practices in the RECs, in the State Parties and International Conventions binding the African Union.

What are the origins of the acquis and what does it mean? In 2008 the Heads of States of SADC, the EAC and COMESA decided to form one collective trade regime in the form of the Tripartite Free Trade Area (TFTA), consisting of these three RECs.[6] In 2011 the ambitions were scaled back, and it was decided that existing REC FTAs would continue to trade according to their own trade regimes; alongside the TFTA.

This was the occasion when the notion of the acquis became part of the African integration vocabulary. It was adopted as a Guiding Principle for negotiating the TFTA and has subsequently also become a basic AfCFTA Principle. In the TFTA context the acquis has been defined as follows: Building on the acquis of the existing REC FTAs in terms of consolidating tariff liberalisation in each REC FTA: Acquis is a French term meaning “that which has been agreed”. In the context of the Tripartite Free Trade Agreement it means that the negotiations should start from the point at which of the COMESA, EAC and SADC trade negotiations have reached. Tariff negotiations and the exchange of tariff concessions would be among Member/Partner States of the Tripartite FTA that have no preferential arrangements in place between them. This will both preserve the acquis and build on it.

This definition applies to the AfCFTA too, it is nowhere given a different meaning.[7] The effect is that the tariff concessions extended as part of the AfCFTA negotiations, would only be among those State Parties “that have no preferential arrangements in place between them”. Intra-REC trade is fully governed by the relevant REC FTA regimes and will not see any liberalisation via the AfCFTA negotiations. The same applies, according to Article 19(2) of the AfCFTA Agreement, to regional trading arrangements and custom unions, which have attained among themselves higher levels of regional integration than under this Agreement.

The terms “regional trading arrangements and custom unions” are not defined. They must, therefore, be interpreted by giving them their ordinary meaning within the context used.[8] Trade arrangements such as the TFTA (once in force) SACU and bilateral trade agreements should fall under this category of exceptions.

The TFTA was launched in June 2015 but negotiations continue. Tariff offers have been exchanged between the member of the East African Community (EAC) and the members of the Southern African Customs Union (SACU), and negotiations were completed in July 2019. Some progress has been made in tariff negotiations between the EAC and Egypt. Rules of origin negotiations continue for clothing and textiles, autos, edible oils, and sugar. Fourteen ratifications are needed for entry into force. Eight States have ratified the TFTA Agreement.[9] Work programmes on industrial development, infrastructure and trade facilitation have been mentioned. Trade in services negotiations have not made real progress.[10]

The AfCFTA foresees the co-existence of several African FTAs alongside each other. Those RECs with their own regional integration agendas will pursue their specific strategies on deeper integration, as well as other disciplines considered to be necessary for local needs. Examples are regional environmental programmes, energy, water, policing, nature conservation, political cooperation etc.[11]

How will the RECs be blended into the institutional architecture of the AfCFTA and into continental integration schemes and action plans? Article 12 (5) of the AfCFTA Agreement says the RECs “shall be represented in the Committee of Senior Trade Officials, in an advisory capacity”. More precise plans will be required.

What does it mean to be building blocks of the AfCFTA? The AfCFTA Agreement mentions long-term objectives regarding the formation of a “single African market”,[12] but not a detailed practical formula. The only hints about subsequent steps are that a liberalised market for goods and services will be created “through successive rounds of negotiations” and that the foundation for the establishment of a Continental Customs Union will be formed “at a later stage”.[13] Specific decisions, with far-reaching political implications, will have to be adopted to anchor such bold initiatives, as happened when the negotiations for the AfCFTA were launched.[14] Individual Governments will have to support such future steps, which they will presumably do when the conditions are ripe. That too will be a member-driven process.

For the immediate future the most urgent challenge is to ensure all AfCFTA State Parties have the capacity to improve trade governance at home and at their borders. This will require tailor-made projects about domestic and regional reforms. The AfCFTA Secretariat will play an important role in ensuring that all these initiatives get off the ground and that action plans will be coordinated. State Parties lacking the necessary capacity and domestic structures should be assisted for the sake of the AfCFTA.

[1]  pdf Abuja Treaty establishing the African Economic Community - June 1991 (145 KB)

[2] The Regional Economic Communities (RECs) of the African Union | Office of the Special Adviser on Africa, OSAA

[3] Art 5 AfCFTA Agreement.

[4] Art 5(b) AfCFTA Agreement.

[5] Art 3(d) AfCFTA Agreement.

[6] COMESA-EAC-SADC Tripartite FTA - tralac trade law centre

[7] The definitional clause of the AfCFTA Agreement does not define the acquis.

[8] Art 31, Vienna Convention on the Law of Treaties.

[9] South Africa, Egypt, Uganda, Rwanda, Kenya, Namibia, Burundi, and Botswana.

[10] For an update on the TFTA, and which countries have ratified the Agreement, see https://www.tralac.org/news/article/14415-implementation-of-the-tripartite-fta-agreement-now-in-sight.html

[11] SADC, for example has a Protocol on Trade, Finance and Investment and more than 20 additional ones.

[12] See Art 3 AfCFTA Agreement.

[13] Ibid.

[14] See the references in the Preamble to the AfCFTA Agreement.

About the Author(s)

Gerhard Erasmus

Gerhard Erasmus is a founder of tralac and Professor Emeritus (Law Faculty), University of Stellenbosch. He holds degrees from the University of the Free State, Bloemfontein (B.Iuris, LL.B), Leiden in the Netherlands (LLD) and a Master’s from the Fletcher School of Law and Diplomacy. He has consulted for governments, the private sector and regional organisations in southern Africa. He has also been involved in the drafting of the South African and Namibian constitutions. He grew up in Namibia.

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