Building capacity to help Africa trade better

The Regime governing Trade under the AfCFTA from 1 January 2021

Trade Reports

The Regime governing Trade under the AfCFTA from 1 January 2021

The Regime governing Trade under the AfCFTA from 1 January 2021

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The African Continental Free Trade Area (AfCFTA) establishes a Free Trade Area (FTA) for trade in goods (and some services) among the 55 Member States of the African Union (AU). The prerequisites are well-established; an FTA exists when the State Parties implement finally agreed legal obligations about tariff reductions and rules of origin governing trade in goods among all of them. A specific international agreement for establishing an FTA must be in force for the States that are parties to the FTA in question. When these legal elements are not yet in place, there is no FTA.

The AfCFTA presently finds itself being poised between an incomplete founding agreement and a decision by the AU Assembly to “start trading under the African Continental Free Trade Area”. This decision was adopted on 5 December 2020 and provides that trade under the AfCFTA Agreement should begin on 1 January 2021. However, the AfCFTA cannot yet be implemented as designed and a unique legal dispensation has therefore been launched to make this possible.

This paper discusses this interim arrangement for AfCFTA trade and its implications, the ad hoc legal instruments on which it will be based, and mentions the challenges expected to confront the private sector when firms will utilize this unique implementation process. Trade in goods may start in specific bilateral configurations under procedures to be implemented within those State Parties ready and able to put in place the required domestic arrangements. The paper begins by providing an overview of certain basic design features of the AfCFTA and what additional steps will be required to implement a continent-wide FTA. This will be another chapter in the life of this arrangement.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the author and do not purport to reflect the views of tralac.


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