What Is Africa Free Trade Agreement

Whatever its historical significance, much remains to be done before countries can benefit from a free trade area. Countries committed to the agreement are expected to present their timetables for concessions for trade in goods and services by next year. Concession schedules outline products and services that countries will no longer tax. Indeed, Africa will benefit even more from trade diversification and value chain growth than through a single free trade agreement. Most African exports are raw materials: agriculture and mineral products, with about 70% of the value added outside the continent. The limited value-added is partly the result of trade agreements that penalize processed products from Africa in favour of raw materials. And these agreements need to be amended so that the continent benefits the most from afCFTA. The agreement was negotiated by the African Union (AU) and signed on 21 March 2018 by 44 of its 55 member states in Kigali, Rwanda. [15] [16] The agreement first requires members to remove tariffs on 90% of goods, allowing free access to goods, goods and services across the continent. [15] The UN Economic Commission for Africa estimates that the agreement will boost intra-African trade by 52% by 2022.

[17] The proposal is expected to enter into force 30 days after ratification by 22 of the signatory states. [15] On 2 April 2019, The Gambia became the 22nd state to ratify the Convention[18] and on 29 April, the Sahrawi Republic tabled the 22nd filing of ratification instruments; The agreement entered into force on 30 May and entered its operational phase following a summit on 7 July 2019. [19] At this summit, Benin and Nigeria signed the agreement, so that Eritrea is the only African state not to be part of the agreement; Since then, Eritrea has applied to join the agreement. Gabon and Equatorial Guinea also tabled their ratifications at the summit. At the time of launch, there were 27 states that had ratified the agreement. [45] [47] [48] [49] AfCFTA is a framework agreement that includes trade in goods and services, including the following protocols: trade in goods, trade in services, intellectual property rights, competition policy, investment and dispute resolution. In Kigali, Rwanda, where the framework protocol was signed in March last year, African heads of state and government were optimistic. If – or when – the 55 African countries ratify the free trade area, it would together represent more than $4 trillion in consumer and business spending, and a market size of 1.2 billion people. What complicates matters further is that Africa was already divided into eight separate free trade zones and/or union unions, with different regulations. [Note 1] These regional bodies will continue to exist; The African Continental Free Trade Agreement aims firstly to remove barriers to trade between the various pillars of the African Economic Community and, finally, to use these regional organizations as building blocks of the ultimate goal of an African-wide customs union.

[21] [31] [32] “In addition to the increase in GDP and trade figures, this contributes to the creation of jobs for the developing youth population in Africa in a very practical sense,” says Vera Songwe, Executive Secretary of the ECA, in an interview with Africa Renewal. Hartzenberg expects some of the 11 countries to sign the agreement at the next AU summit in June 2018. It advises countries to “subscribe to rules-based governance. They must implement their commitments consistently and, if they do not, there should be consequences for those countries. This means that dispute resolution is an essential part of a rules-based AfCFTA. Roberto Echandi is the senior private sector specialist at ETIRI. It focuses on research and policy advice on issues related to cross-border trade in services, negotiations, implementation and maximizing the potential benefits of deep integration trade agreements and the AfCFTA negotiation and implementation process.