Launching the AfCFTA: Getting the Politics and the Expectations right
There is renewed interest (and excitement) about the African Continental Free Trade Area (AfCFTA). The first in a series of agreements to launch this continental trade arrangement were signed at a special AU Summit in Kigali this week.
For many this occasion will signal that the ideals in the Abuja Treaty on the African Economic Community (signed in 1991) are being realized. Others, like the importers, exporters and freighters, who are the real drivers of commerce across borders, will perhaps adopt a wait and see attitude. They will want to see the first concrete results in the form of tariffs on the goods traded between African states being eliminated and customs procedures becoming transparent and streamlined. And for some governments national interests are becoming more pertinent.
However, all good things have a beginning. Trade liberalization and regional integration cannot happen without a proper legal and institutional framework. This framework needs to be negotiated. In the case of the AfCFTA more than fifty governments, representing states at very different levels of economic development, succeeded in finding, in quite a short period of time, sufficient agreement about liberalizing trade in goods to sign a deal. The result of their labour also includes all the related rules which are typical of such regimes. (NTBs, standards, customs procedures, trade facilitation, transit, trade remedies, dispute settlement etc.)
This achievement should not be underestimated. Liberalizing trade across borders and pursuing regional integration initiatives require that governments adjust their jurisdictional control over many matters. These are, for trade in goods, related to clearance and customs, forfeiting customs revenue, granting rights to private parties from foreign jurisdictions, enforcing standards about quality, health and safety, preventing illicit practices, and adopting the new domestic rules and procedures now required. They must also entertain the idea that their national trade policies could be disputed and ruled to be in violation of their treaty obligations.
By signing the first AfCFTA agreement, the first building blocks of the required inter-state legal framework is being put in place. Those states who ratify and implement this agreement will face many adjustments and challenges when complying with their new obligations and making the AfCFTA part of the law of the land where necessary.
Signing is the first in a number of steps still to be undertaken before the AfCFTA will become a reality. There must be more negotiations about tariff schedules and rules of origin in order to complete the AfCFTA legal framework for trade in goods. Then there must be ratification by individual governments before this agreement can enter into force. (the latest indications are that 22 instruments of ratification are required for entry into force.) The negotiations for concluding the outstanding Protocols on trade in services, on competition, intellectual property, and investment are yet to start.
How important is the signing ceremony? There are technical as well as political aspects to consider. The technical matters are about how treaties finally enter into force. The AfCFTA is subject to ratification and therefore signature does not yet establish consent to be bound. However, it does signify that the negotiations have reached that final point where the text reflect what the parties have negotiated and now agree about. Once signature has happened, negotiations cannot, as a rule, be re-opened. Signature is a means of authentication.
It also constitutes a preliminary endorsement of the AfCFTA and creates an obligation to refrain, in good faith, from acts that would defeat the object and the purpose of the agreement. We are entitled to expect that those who sign will complete the treaty making process required for a binding AfCFTA.
The signing ceremony will allow the celebration of an important first achievement; that the AU Member States had found common ground over the basic rules of the game. And they will now proceed with the next steps. At least, that was the picture till two days ago.
There has been a last-minute setback. The Nigerian President decided on Sunday not to sign the AfCFTA in Kigali, citing the need to have more domestic consultations. This decision was taken despite the fact that the Federal Executive Council had on Wednesday last week (14 March), approved that the President can sign the Agreement.
Why this late retreat? What does it tell us about Nigeria’s domestic politics and present economic well-being? It has been reported that organised labour is opposed to signing of the pact, raising fears that is could lead to the ‘complete liberalisation of trade in goods and services among African countries and strip the country of its trade protection?’ This sounds very much like the same reasons why Nigeria refuses to sign the Economic Partnership Agreement with the European Union.
It is important that governments, when negotiating new trade agreements, consult widely and involve domestic stakeholders. It seems that, in Nigeria, this has not happened sufficiently with respect to the AfCFTA. What the Presidential decision seems to signify, is that there is not enough domestic support for the AfCFTA. More work needs to be done. ‘One of the things we want to do is to make sure that we use the African continental free trade area to consolidate and augment Nigeria’s position in Africa as the number one economy’.
Nigeria is not in a unique position when it comes to why states negotiate trade agreements. All states want to reap new benefits. What this development emphasize is that modern trade agreements are not the exclusive business of “high politics”. Domestic stakeholders and legislatures need to be informed of the interim outcomes of negotiations in order to prevent last-minute hiccups such as this one.
It also demonstrates that certain African governments will take a hard look at the benefits of African trade deals and make sure national needs are indeed served.
Where does this development leave the AfCFTA’s negotiating process? Will Nigeria demand that certain matters be re-opened and new negotiations be conducted, or will it only make an improved effort of selling the AfCFTA domestically? We will have to wait for the next round of announcements and the official statements (if indeed made) of other Governments and of the AU. There may be an awkward silence for a while.
 Articles 10 and 18, Vienna Convention on the Law of Treaties 1969.
 Reported in the Nigerian Business Day. https://www.businessdayonline.com/fg-commences-wider-consultations-cfta/