A meeting of experts was hosted from 12-15 November 2018 by the African Union Commission (AUC), United Nations Conference on Trade and Development (UNCTAD) and the Economic Commission for Africa (ECA) in Addis Ababa at the United Nations Conference Centre to discuss the African Continental Free Trade Area (AfCFTA) Phase II issues.

The AfCFTA Phase II issues are investment, competition policy, and intellectual property rights. These provide a critical complement to the Phase I topics of trade in goods and services, by helping to “ensure that the benefits from integration are not only deepened, but shared for a win-win AfCFTA,” says Mr. David Luke, coordinator of the African Trade Policy Centre (ATPC) of ECA.

Following the experts group meeting, a validation workshop is to be held on November 16, 17 and 19 to review draft chapters of the Assessing Regional Integration in Africa (ARIA) IX, a flagship report of ECA, on the theme, “Next steps for the African Continental Free Trade Area”.

The ARIA report provides highly applied research to form the intellectual groundwork underpinning the phase II negotiations. To the greatest extent possible, the research aims to consider issues that are relevant not just to the AfCFTA now, but to future African negotiations with other trading partners and negotiations elsewhere in the world.

Assessing Regional Integration in Africa IX Report: Next steps for the African Continental Free Trade Area

Background

The African Continental Free Trade Area (AfCFTA) is a tool for driving African industrialization, economic diversification and development. It helps to promote the type of trade that produces sustainable growth, creates jobs for Africa’s youth, and fosters opportunities for nurturing Africa’s businesses and entrepreneurs.

Negotiations for establishing the AfCFTA were launched in June 2015 by the Heads of State and Government of the African Union (AU) at the 26th Ordinary Session of the AU Assembly. Ten rounds of negotiations concluded with the signing of the AfCFTA Agreement on 21 March, at the 10th Extraordinary Session of the AU Assembly, in Kigali, Rwanda, by 44 AU Member States. A further 6 Member States signed the pdf Kigali Declaration (209 KB) , reaffirming their commitment to the AfCFTA and their intention to signing it after undergoing the required domestic review processes of their respective legislatures. There remain 5 AU Member States who have not yet signed either the AfCFTA or the Kigali Declaration; several of these are, however, expected to do so later in 2018.

With the vast majority of the continent committed to the AfCFTA, the agreement will enter into force after the 22nd instrument of ratification has been deposited with the African Union Commission (AUC). State Parties to the agreement must also conclude its implementation roadmap, including the finalization of schedules of commitments and rules of origin.

Yet this concludes just the phase I negotiations of the AfCFTA. Aspiring to establish a ‘deep’ trade agreement between African countries, the Heads of State and Government of the AU also agreed that the AfCFTA should address ‘behind the border’ trade issues. The AfCFTA was hence structured with phase II negotiations on three topics: a) competition policy, b) intellectual property rights, and c) investment. Across these topics, the AfCFTA will harmonize and align policy to reduce trade costs, promote integration and realize sustainable and inclusive development across Africa.

Beyond these specific topics, digital trade and e-commerce has been further mooted as a new area in which dedicated policy alignment in Africa could be of value. The mode of trade is increasingly digital; this is appreciated in regional approaches to the digital economy in several other parts of the world, including with ASEAN’s Coordinated Committee on E-Commerce or the single digital market in the EU.

Such policies seek to address not just the opportunities of digital trade, such as reduced information costs and information asymmetries, but also the challenges, such as threats to industrialization and data ownership.

Main themes and conceptual approach

The aspiration is for the research to be highly applied: the knowledge gathered and produced should match the issues to be negotiated in the AfCFTA phase II negotiations and strive, wherever possible, to inform the content of the negotiations going forward. As such, the intention is for the research to form the intellectual groundwork underpinning the phase II negotiations. While this ensures that the report is meaningful and relevant, it is also intended that its content be timeless: to the greatest extent possible, the work will consider issues that are relevant not just to the AfCFTA now, but to future African negotiations with other trading partners and negotiations elsewhere in the world.

The topics addressed by the AfCFTA are not new. Other regional groupings, from Asia to South America and indeed sub-regions in Africa, have taken regional approaches to such issues as intellectual property rights, competition policy, investment, and digital trade and e-commerce. Drawing from this, the adopted methodology will be anchored on a combined case study and comparative analysis method, but will also draw from existing relevant research material.

The four main themes to be addressed by the report are:

• Competition policy

• Investment

• Intellectual property rights

• Digital trade and e-commerce

Across each of the four themes of the report will be two-to-three main case studies consisting of analysis in different world regions or sub-regions of Africa. These will build a discussion on the existing types of possible policies and their characteristics in each of the four subjects, as well as their developmental potential. Concluding each theme will be a comparative analysis of the case studies from which recommendations will be drawn for the specific African continental context.