African Union Free Trade Agreement

Eritrea was not part of the original agreement due to the ongoing state of war, but the 2018 Peace Agreement between Ethiopia and Eritrea ended the conflict and the obstacle to Eritrea`s participation in the free trade agreement. [10] [30] [45] [46] [47] The unrecognized state of Somaliland did not participate in the discussions on the creation of the agreement. The AfCFTA is clearly focused on improving women`s lives. There is a danger that some of the economic gains women are making through trade will be wiped out by the COVID-19 crisis. According to the Economic Commission for Africa, women account for about 70 per cent of informal cross-border traders in Africa. Through this work, women can be vulnerable to harassment, violence, confiscation of property and even imprisonment. Tariff reductions under the AfCFTA will allow informal traders to operate through formal channels, resulting in better protection. In addition, a growing manufacturing sector would offer new employment opportunities, especially for women. Second, the AfCFTA will be an opportunity to regulate policy areas important for economic integration that are often regulated in trade agreements, but have so far not been covered by most African APTs, which, according to the bank, « tend to be superficial. » The new year began with trade under the AFCFTA Continental Free Trade Area.

But what does the new trade zone mean for existing bureaucracy, poor infrastructure, tariffs and freedom of movement throughout the region? In 2018, Washington launched Prosper Africa to coordinate U.S. government resources and expand business opportunities in Africa, with the goal of doubling bilateral trade between the country and the continent. It is still unclear how and how quickly this project, which in principle seems excellent, will be implemented. Meanwhile, the official U.S. response to the AfCFTA has been ambivalent at best. Much to the chagrin of African leaders, the United States continues to negotiate a bilateral trade agreement with Kenya in the hope of developing a model that could then be applied to other African countries. These efforts follow a period of decline in reciprocal trade between the United States and Africa: between 2014 and 2018, U.S. exports to Africa declined by 32 percent, while Africa`s exports to the United States declined by 55 percent over the same period.

Policymakers claim that the free movement of workers will be a key factor in the proper functioning of the free trade area, but not all African countries are committed to this concept. The African Continental Free Trade Area only entered into force when 22 of the signatory states ratified the agreement, which happened in April 2019, when The Gambia became the 22nd country to ratify it. [67] [68] As of August 2020, there were 54 signatories, of which at least 30 had ratified and 28 had deposited their instruments of ratification. [69] [70] [71] The three countries that have ratified their ratification but have not yet deposited it would be Cameroon, Angola and Somalia[71][72], although Morocco is also documented for ratifying it. [73] [74] The Kigali Summit identified areas of agreement on trade protocols, dispute settlement procedures, customs cooperation, trade facilitation and rules of origin. This was part of Phase I of the agreement, which covers the liberalisation of goods and services. It was also agreed to reduce tariffs to 90% of all goods. Each nation has the right to exclude 3% of goods from this agreement. [25] The African Continental Free Trade Area (AfCFTA)[9] is a free trade area comprising 28 countries in 2018. [1] [10] [11] [12] It was created by the African Continental Free Trade Agreement between 54 of the 55 nations of the African Union. [13] The free trade area is the largest in the world in terms of the number of participating countries since the creation of the World Trade Organization.

[14] Accra, Ghana serves as the secretariat of AFCFTA and was mandated by the President of Ghana, His Excellency Nana Addo Dankwa Akuffo Addo, on August 18, 2020 in Accra and handed over to the AU. Several committees have been established on trade in goods, trade in services, rules of origin, trade remedies, non-tariff barriers, technical barriers to trade and sanitary and phytosanitary measures. [39] Dispute resolution rules and procedures are still under negotiation, but they will likely include the designation of a dispute resolution body. [35] The Committee of Senior Trade Officials implements the Council`s decisions. The Committee is responsible for drawing up programmes and action plans for the implementation of the AfCFTA Agreement. [39] The AfCFTA underscores the African Union`s important and growing commitment to reducing poverty through trade – a link that is increasingly recognized. As NGOZI Okonjo-Iweala, a candidate for WTO Director-General, recently stated, « trade is a force for good, and proper use can help lift millions of people out of poverty and create shared prosperity. » And it couldn`t have happened at a better time. As a collective, the continent is taking a new economic path. In 2018, African leaders signed an agreement that would bring to life the African Continental Free Trade Area (AfCFTA) – a turning point in Africa`s regional and international trade.

When it comes into force gradually over the coming months and years, the AfCFTA will cover a market of more than 1.2 billion people and up to $3 trillion in combined GDP, with the potential to boost intra-African trade by more than 50 percent, according to the United Nations Economic Commission for Africa. .