The AfCFTA: Overview and implications
The AfCFTA is an ambitious project. Although it is called the Continental Free Trade Area, it is more than a trade in goods agreement. It will also cover trade in services, facilitation of investment, intellectual property rights, and competition policy. Additional disciplines and Protocols are also foreseen. Article 3 of the AfCFTA Agreement lists several general objectives, which will be achieved incrementally. These include the achievement of a single market for goods and services, facilitated by movement of persons; facilitation of investments; laying the foundation for the establishment of a Continental Customs Union; enhanced competitiveness; promotion of industrial development; and to resolve the challenges of multiple and overlapping REC memberships and expedite regional and continental integration processes.
The Agreement Establishing the AfCFTA, adopted at the Extraordinary AU Summit in Kigali on 21 March 2018, is the overarching legal instrument. All Protocols, Annexes, Appendices and Guidelines form an integral part thereof. However, many of these instruments are still a work in progress. The tariff reductions, rules of origin, and trade in services arrangements must still be negotiated and finalized.
Implementation will require clarity of purpose and certainty about the powers of the entities to be established, and how they will interact with existing trade regimes. Very concerted efforts are required to tackle well-known problems related to trade facilitation, non-tariff barriers (NTBs), corruption and lack of legal clarity. If not properly implemented (with transparency, trade remedies and sanctions being provided), the benefits which the private sector may gain will be few.
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