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Namibia: Misgivings over free trade agreement


Namibia: Misgivings over free trade agreement

Namibia: Misgivings over free trade agreement
Photo Credit: World Bank

Labour Resource and Research Institute of Namibia director Mike Akuupa says the government has not engaged stakeholders enough regarding the implications the African Continental Free Trade Area agreement has on the country.

Speaking in an interview with The Namibian, Akuupa said the country did not consider the various protocols contained in the agreement in detail for the country to have a clear understanding of it. “Access to markets is one thing, but what comes with it is another ball game entirely. How is the agreement going to affect the worker, the small businessman, or the manufacturer? What are the finer details on protocols on trade and services, and trade in goods?” he asked.

Nigeria has not yet signed the agreement because they decided to consult extensively with stakeholders.Moreover, benefits for small economies are still not clearly known, as there was no proper situational analysis undertaken to have clear projections of benefits and costs. “Even if you ask some large business representatives about the African continental free trade area (AfCFTA), some have no clue. The issue of the red line surfaces from sentiments of the head of state after signing. This issue was supposed to be dealt with before the country went on to sign; that is the lack of consultation we are referring to,” Akuupa stressed. He said it is presently not quite clear what modalities are in place to operationalise the continental agreement, as “such information is either only known by trade ministers, and not the envisaged players of the game. The country can consider the low-hanging fruits if they are easily identifiable and obtainable in this AfCFTA pact. However, what is clear is the lack of consultation and consideration of various stakeholders on the subject matter.”

Trudi Hartzenberg, Trade Law Centre (Tralac) executive director said the signing by South Africa and Namibia is important, and that there are no legal consequences arising from this. “But signing the AfCFTA signals commitment to the negotiating process. There are still issues to be negotiated. Member states will start negotiating tariff reductions, to finalise the negotiations on rules of origin, and also commitments on the priority services sectors. This will complete the first phase of negotiations,” she noted.

The World Trade Organisation defines rules of origin as the criteria needed to determine the national source of a product. 

Hartzenberg added that the longer-term benefits of the AfCFTA will depend on the specific provisions in the agreement, “for example, keeping in mind that South Africa and Namibia are part of the Southern African Customs Union (Sacu), and that they will negotiate the tariff reduction commitments, collectively, is important. “There may well be opportunities to enable trade between member states of Sacu and the Economic Community of West African States (such as Nigeria).”

Small businesses might benefit from the AfCFTA, she added, further observing that facilitating trade through more efficient customs and border management, thereby reducing time in transit, will reduce the costs of trade, which is particularly important for smaller businesses. 

“Access to new trade opportunities through lower tariffs and simpler rules of origin will also assist small businesses to trade better in Africa. The AfCFTA agreement provides that existing trade agreements (such as the regional economic communities and also the tripartite free trade area) will remain intact,” she stated. Furthermore, Sacu member states are normally negotiating tariff reductions as a collective so that they protect the integrity of the common external tariff. “The Southern African Development Community free trade area will also remain functional, and no further negotiation among the member states will be undertaken,” she added.


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