Trade Reports
Pro-competitive services sector regulation: a possible direction for the AU CFTA Agreement?
The African Economic Community (AEC) was established by the Abuja Treaty (1991) as an integral part of the African Union (AU). One of its objectives is to promote economic, social and cultural development and the integration of African economies in order to increase economic self-reliance and promote endogenous and self-sustained development. The Treaty sets a six-stage transitional period to achieve its objectives which include the gradual removal of obstacles to the free movement of persons, goods, services and capital and the right of residence and establishment.
The Free Trade Area (FTA) was to be established within 10 years but it was only in January 2012 that the AU Summit of Heads of States/Government endorsed the action plan for the establishment of the Continental FTA (CFTA) by 2017. The Summit in June 2015 subsequently launched the negotiations. The negotiations will be phased, covering trade in goods and services in the first phase and investment, intellectual property rights and competition policy in the second phase. Currently, the AU Commission (AUC) is undertaking preparations for phase 1 negotiations including defining the negotiating modalities and training member states’ officials.
A practical question is what should be the starting point and ambition for the CFTA services chapter. Clearly, Article 6 of the Abuja Treaty embeds the acquis principle i.e. CFTA agreement will build on the achievements so far in the eight African Regional Economic Communities (RECs). However, learning from the World Trade Organization (WTO) General Agreement on Trade in Services (GATS), the Trade in Services Agreement (TISA) currently under negotiation, and other non-African FTAs, the value of the agreement will depend on its response to business challenges and sector development.
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