Trade Briefs

What will happen to the Regional Economic Communities and other African Trade Arrangements once the AfCFTA is operational?

What will happen to the Regional Economic Communities and other African Trade Arrangements once the AfCFTA is operational?

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11 Jun 2018

Author(s): Gerhard Erasmus

The text of the Agreement establishing the African Continental Free Trade Area (AfCFTA) contains several provisions about how this new trade arrangement will co-exist with the Regional Economic Communities (RECs), as well as other trade agreements and arrangements with third parties. This Trade Brief discusses them in order to find out how trade will be conducted once the AfCFTA becomes operational.

Multiple and overlapping membership of Africa’s RECs is common, especially in east and southern Africa. Such arrangements are costly and cumbersome to implement. The rules and disciplines associated with a particular regional trade arrangement are unique. By belonging to several RECs simultaneously, compliance requirements are duplicated. Different sets of rules have to be met with regard to the same product when exported to separate destinations.

What is the AfCFTA’s approach to overlapping membership challenges? Its rules of origin have not been negotiated and therefore the “basic philosophy” behind this endeavour must be looked at. There are indications in the Draft Agreement that the aim of resolving the challenges of multiple and overlapping memberships is subject to a more overriding aim, to preserve the RECs and their acquis.

The AfCFTA is designed to be a project of successive rounds of negotiations and future work. It contains a rendez-vous clause in which the State Parties undertake to continue negotiations in the outstanding areas. This is its “built-in agenda,” which includes tariff and rules of origin negotiations as well as the negotiation of commitments for the priority services sectors, which are still to be agreed. It is clear that for the foreseeable future, the RECs will remain in place and implement their own regional agendas. The plan is definitely not to abolish them. We need new thinking and an action plan for resolving the problems of overlapping membership on the African continent.

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