Continental Free Trade Area on track

By Timo Shihepo

NIAMEY – Africa has moved an inch closer to realising the dream of a continent with a free trade area despite persisting stumbling blocks, if the third African ministers of trade meeting held in Niger last week is to be scrutinised.

The ministers met in Niger ahead of the December 2017 agreement deadline, which states that Africa should have an agreement on Continental Free Trade Area (CFTA) ahead of the implementation process slated to begin as from 2018.

The December 2017 deadline was set by the African Union heads of state and government in 2015.

With the CFTA, Africa is aiming to create a single continental market for goods and services. The single market is intended at having free movement of business persons and investments. This is then earmarked to pave the way for accelerating the establishment of the Continental Customs Union and the African customs union.

Members of the CFTA negotiation forum, senior trade officials and ministers of trade met in Niger where they engaged in meetings for the past two weeks. The first meeting was the CFTA negotiating forum, which concluded its report after one week. They presented their report to senior trade officials from African ministries of trade.

The senior trade officials are responsible for the preparations of the ministerial meeting. The ministers then met and considered the reports and recommendations on some key outputs for the process. The first output was that in order to kick-start the substantive negotiations they needed to have member states agree on how they are going to go about liberalising tariffs on the continent.

The second aspect was about doing the same for trade in services because there are two agreements, trade in goods and trade in services. They also considered whether the schedule of meetings is sufficient or not to be able to achieve the December 2017 deadline.

“They decided to add additional meetings. What I can say is there was a very positive outcome of the meetings. We saw very serious engagements from all the member states and through the various levels, we will eventually arrive at a decision on all the issues that were placed before the ministers,” AUC’s director of trade and industry, Treasure Thembisile Maphanga told The Southern Times after the ministers’ meeting.

She said the signal was very clear that African countries were very committed going forward with integration at the continental level. Maphanga, however, cautioned that this was only achievable if Africa built on what was achieved at regional level.

“The level ambitions has been set very clearly at the levels of 90% of all tariffs rates. Some details of how we are actually going to dismantle tariffs are still part of what we are going to be working on at the technical level.”

Challenges

The CFTA is, however, facing challenges such as technical standards that vary from country to country and custom procedures, which delay goods. There are some countries or regions that have advanced to the level of custom unions and these have no custom duties among themselves. But some countries are not even part of free trade areas. Regional free trade areas is the core component of the CFTA.

Maphanga said they were looking at this to see how they could improve on this and move forward. She said the decision to move forward with the CFTA was made after conducting a number of studies on the current level of integration and at the level of intra-regional trade.

“Yes, of course, we have different categories of regional integration. The diversity is vast. But we are seeing this a pragmatic project where the CFTA provides an avenue for everyone on the continent to be able to trade with other African countries in a single market. This is the ambition and the aim and we believe that we can achieve this especially with the goodwill of the member states.”

Forced deadline

AUC’s department of trade and industry also came out to say that the department was not being pressured by the heads of state and government to have CFTA agreement by December 2017.

Some senior officials who spoke to The Southern Times on the sidelines of the ministerial meeting said they wished they had more time to iron out some issues before the deadline.

Maphanga, however, said the truth of the matter was that this decision was taken at the January 2012 AU summit and this was now five years ago. She added that the fact of the matter is that they had been working as the Commission with member states.

The Commission has different phases of the negotiations. There was a preparatory phase, which was concluded when the negotiations were launched in June 2015.  Since last June, the Commission has now been in the negotiations phase.

“Based on the outcomes of the meeting we have held the December deadline is absolutely achievable,” said Maphanga.

She admitted that the timeline had, however, also accommodated that there were going to be some issues that the Commission would not be able to deal within the first part of these negotiations. These were investments, intellectual property rights and competition policy.

They would achieve the deadline at the end of this year, have that process of signature and ratification moved forward because all countries had to do that. But simultaneously in 2018 the Commission already had a work programme to continue to negotiate the remaining items.

“When we publicised the December 2017 deadline this was to conclude the core agreement with the key texts on trade in goods and trade in services. Then there was going to be a further implementation roadmap going forward. Many people forget that we are negotiating an agreement that has to be implemented. The deadline of 2017 does not include the implementation. Implementation is the next phase,” she said.

She said in January 2018 the heads of state and government would consider the 2017 agreement and would make a decision how they want to launch it. Once that decision was launched and endorsed, the member states would be invited to sign. Once they sign they would also be expected to find mechanisms for ratifications.

“In 2012 the level of inter-Africa trade was at about 12 percent and the target is to double by 2022. The CFTA is one of the key measure that will help us achieve that,” said Maphanga.

June 2017
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