With the agreement and Phase 1 protocols adopted in early 2018, the process of securing the necessary signatures and ratifications for entry achieved through 2019, the African Continental Free Trade Area (AfCFTA) finally took off in January 2021, after the latest postponement brought about by the COVID-19 global pandemic.
Sofia Balino, communications and editorial manager of Economic Law and Policy at the International Institute for Sustainable Development, conveys the elation of the AU Chairperson and President of South Africa Cyril Ramaphosa in the following words: “Now, we are about to witness the realization of one of the flagship projects of Agenda 2063.”
Agenda 2063 is the continent-wide policy roadmap that includes among its objectives “inclusive growth and sustainable development” and an “integrated continent.” It is currently undergoing its implementation plan, due to wrap up in 2023, which included the AfCFTA’s completion and a series of other trade-related goals.
The AfCFTA is designed as a multi-stage process, meaning that the agreement will continue to evolve over time, and more negotiations are planned.
The first phase, covering goods and services trade, took effect in 2021, although talks to finalize tariff schedules and the rules of origin provisions for Phase 1 remain ongoing.
Rules of origin, in trade parlance, refer to how much content must be produced locally to be treated as being from that country.
Negotiators will now undertake Phase 2, which involves developing protocols on investment, competition policy, and intellectual property rights (IPR). A third phase will involve the negotiation of an e-commerce protocol.
Along with the AfCFTA’s take-off and the negotiations that still lie ahead, trade watchers are also looking to see how this new agreement will operate relative to a series of eight regional economic communities (RECs) that exist in Africa, many of which have overlapping memberships Balino reports.
These RECs also approach economic integration differently. Some RECs have formed their own customs unions, for example, or have negotiated free trade areas of their own. Some are in the process of doing so. Others have not attained that level of economic integration.
Another consideration is what the AfCFTA will mean for regional and national trading arrangements with other countries, such as the economic partnership agreements (EPAs) that some African countries and country groups have negotiated with the EU, or are in the process of executing.
Some AU member States, such as Kenya, have embarked on bilateral negotiations with other trade partners such as the United States. As progress in the AfCFTA is sustained, lessons learned should light the way for more seamless African integration.