AfCFTA

The AfCFTA has a broad objective of creating “a single continental market for goods and services, with free movement of business persons and investments” and a potential to significantly impact international trade relations simultaneously at the continental and global levels. Yet, situated in the context of a challenging and protracted history of non-implementation of regional trade agreements, and a complex international and regional trade wars with divisive implications in contemporary multilateral trading system, there are reasons to be modest about the impact of the AfCFTA.

In this essay, I argue that the AfCFTA needs to rethink its relationship with the continental emancipatory movements. Its focus on economic integration without social-emancipatory movements undermines its central aim of creating “the Africa we want.” Its top-down approach fails to capture labor movements in Africa. Additionally, by creating yet another integration organization in Africa despite the existence of several regional and continental integration projects it cashes organizational costs that could have been spent in creating a labor-friendly integration project.

Regional integration requires not only the elimination of tariff and non-tariff barriers, but also the removal of impediments that cause the physical movement of goods across borders to be slow and costly. These impediments may arise due to defects in policies, laws or procedures. Thus, trade should not only be liberalised, but it also needs to be facilitated. The World Trade Organization (WTO) defines trade facilitation as “the simplification, modernization and harmonization of export and import processes.” Six of the Southern African Development Community (SADC) countries are land-locked (Botswana, Lesotho, Malawi, Swaziland, Zambia and Zimbabwe). Therefore, inefficiency and high costs in cross-border trade have detrimental impacts on their ability to participate in global, as well as in regional trade. SADC states are parties to several agreements that aim at facilitating trade. However, the implementation of obligations remains a chronic challenge.

The centralisation of democratic practise in the implementation of AfCFTA will require serious commitment on the part of national and regional officials involved in negotiating the process. A key first step in this respect is the express inclusion of respect for democratic values in the Agreement.

The signing of the consolidated text of the African Continental Free Trade Agreement (AfCFTA) in March 2018 by 47 African Union member States was a significant milestone. It was the first time since the Abuja Treaty of 1994 that a continental trade agreement had been negotiated. This symposium critically appraises the agenda of the AfCFTA. It kicks off with a post that boldly makes the case why this agreement promises to redress the comparatively low levels of intra-regional trade as well as the dearth of high value exports from Africa.

Welcome to Afronomicslaw.org, a blog on the international economic law landscape as it relates to Africa. A major goal of this blog is to complement current analysis of international economic law issues as they relate to Africa in the blogosphere. We believe that this blog is particularly timely because there are significant international economic law developments taking place in Africa that invite more contemporaneous reflection and discussion.

The AfCFTA will over a period of 15 years after entry into force progressively eliminate tariffs on intra-African trade, making it easier for African businesses to trade within the continent and cater to and benefit from the growing African market. Consolidating this continent into one trade area provides great opportunities for trading enterprises, businesses and consumers across Africa and the chance to support sustainable development in the world’s least developed region.

The AU’s focus should be to design the AfCFTA investment protocol as an instrument that will treat all investors equally, and that will also foster harmonisation at continental level from the top down. My argument is still valid although my solution will not resolve questions such as divergent policies and views with regard to whether investor state disputes should be referred to arbitration or litigation. Central to this issue is that African states have different levels of the rule of law. This means that under circumstances where the rule of law is poor, obliging investors to refer disputes to the courts of a host state riks denial of justice.

In order for the benefits of the AfCFTA to trickle down, African countries need to adequately consider ICBT when designing and implementing trade policies. Trade policies will be incompletely conceived and may not sustain the economic development goals that integration is supposed to deliver if African countries do not adopt a holistic approach that recognizes the importance of ICBT.