Africa Free Trade Agreement comes into force, but negotiations not yet completed

The agreement establishing the African Continental Free Trade Area (AfCFTA) came into force on 30 May. It has the potential to make the continent the largest free-trade area in the world.

South Africa is among 52 out of the 55 African Union member states that have signed up.

22 ratifications were required for the agreement to become effective and 24 of the signatories have complied.

Three countries have not signed - Benin, Eritrea and continental powerhouse, Nigeria.

Trudi Hartzenberg, executive director of the Trade Law Centre (tralac) says Nigeria is busy with an in-depth consulting process and is expected to sign the agreement soon and move on to ratification.

She points out that all negotiations have not yet been concluded.

There is still a lot of work that needs to be done before we will see goods and services crossing borders among African states under the Continental Free Trade Area regime

Trudi Hartzenberg, Executive director - Trade Law Centre

For example, the negotiations to lower import duties on intra-African trade are underway. The member states are meeting in Addis (Ababa) this week.

Trudi Hartzenberg, Executive director - Trade Law Centre

Harzenberg says they're aiming to have the new tariff regulations in place sometime in 2020.

Once the negotiations are complete and member states have agreed how they are going to reduce import duties, then of course they have to go back to their customs and revenue authorities.

Trudi Hartzenberg, Executive director - Trade Law Centre

But the agreement is about more than lowering tariffs.

Harzenberg says practical issues like reducing inefficiency through for instance conforming to the same axle loads when crossing borders, is of vital importance to reduce uncompetitiveness.

Another example is trimming down documentation and harmonising requirements to reduce time spent at the border

In the future, this would also affect electronic processing.

This broad trade facilitation agenda, in addition to the tariff liberalisation. is more important than simply reducing the import duties.

Trudi Hartzenberg, Executive director - Trade Law Centre

The cost of doing business, the cost of transport, the time spent at border posts erodes competitiveness. It is still cheaper to bring a container of goods for example from China, than to take it from Cape Town to West Africa.

Trudi Hartzenberg, Executive director - Trade Law Centre

There is a significant focus in the Continental Free Trade Area on non-tariff issues - regulations related to for example transport that have got to be harmonised... also customs and border management...

Trudi Hartzenberg, Executive director - Trade Law Centre

Take a listen to the full discussion below:


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