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The African Continental Free Trade Area – Unfinished Business

By Francis Mangeni

As the euphoria on the conclusion of the African Continental Free Trade Area ebbs, it is back to work for the negotiators, to complete unfinished business. The existential question now is: can the African Continental Free Trade Area actually happen? Can trade ever be done under this regime? There is still quite some work to complete before this can happen, which will require tact, foresight and good management.

Africa’s presidents will next meet this July in Mali, just two months away, and expect to receive and adopt the outstanding instruments needed to complete the Agreement, namely, annexes setting out the details for trading in goods and services. The first priority of priorities is to complete these annexes, through legal scrubbing, which usually turns out not to be as easy as it might sound.

The annexes cover the following areas: rules of origin, customs cooperation, trade facilitation, non-tariff barriers, technical standards, health standards, transit trade, trade remedies, and schedules of tariff concessions. There are three short annexes also for dispute settlement, which can be completed quickly: on panel working procedures, expert review and code of conduct for arbitrators and panellists.

Should the law experts fail to complete the scrubbing at the ongoing long meetings, the African Ministers of Justice and Attorneys-General who will meet in the first week of June this year, should prepare to do the heavy lifting. They will need to keep away from the hair-splitting that sometimes bogs down meetings between two or more lawyers, worse between lawyers from 55 countries. The law ministers will have to think and behave as decisive judges and not litigation attorneys on frolics.

Also outstanding is selection of services sectors for opening up and negotiations on an integrated services market covering those sectors. The negotiations are expected to produce regulatory frameworks and schedules of specific commitments. Services such as transportation and logistics, tourism, business, communication, energy, and finance, on average contribute to more than 50 percent of the national outputs of African countries and facilitate intra-African trade as well as beneficial participation in the inevitability of globalisation however derided by some.

Related to this, are outstanding issues on modalities for tariff negotiations for trade in goods. While tariffs on 90 percent of the total products will be liberalised over a 5 to 10-year period, it is yet to be agreed on how many product lines can be excluded from liberalisation all together and how many can be designated as sensitive on which tariffs can be retained for a much longer period. Excluded and sensitive product lines together will make up 10 percent or up to about 600 products. Every country or customs union is expected to produce a schedule of tariff concessions, which indicates levels of liberalisation in trade in goods.

The negotiated and concluded services schedules of specific commitments and the goods schedules of tariff concessions are required to be submitted to the African Summit of January 2019, which is just over half a year away. This is not much time at all, given the bean counting that goes into negotiating tariff and services schedules. Appeals for adopting a simple annual tariff reduction formula across the board, still go unheeded, as experts are gearing up for bilateral negotiations. And they will need to sort out the excluded and sensitive products. If the timeframe of January 2019 is to be met, high level political intervention and leadership will be helpful, through active ministerial guidance and resolution of stubborn issues, or even through summit decisions. Analytical work should be sustained to bring home, to technical experts and policy makers, the adverse or positive implications of excluded and sensitive products on intra-African trade, regional value chains, and structural transformation.

The other priority of priorities is getting 22 countries to ratify the Agreement so it enters force before the end of this year, 2018.  Ghana, Kenya and Rwanda have already ratified the Agreement (though they haven’t deposited their instruments of ratification with the African Union), in under two months of signing it. If it were a linear process, it could be safely concluded that the 22 ratifications will soon be in. But it can be an exponential process if the African Union Commission immediately sets out with high level emissaries to African political and opinion leaders seeking the ratifications. If the process is left to drag, there is a small risk that it might fizzle out.

Finally, the second phase of the negotiations needs to kick off on investment, competition and intellectual property, and be finalised in time to submit the protocols to the African Summit for adoption in January 2020. Experience and lessons from the first phase should come in handy if utilised, to assist progress in these new negotiations. Ways of building on what obtains in the regional economic communities and good practices from around the world should be explored. For instance, the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC) have functional regional competition policy regimes and institutions, which can provide starting points for Africa. South Africa has an investment law and guidelines for its investors that epitomise developing country positions on sustainable investment regimes. Such national experiences could be drawn upon.

The African approach of designating some Heads of State to champion certain continental programs has proved hugely effective in mobilising required political will and technical focus; a prime example being how Presidents Paul Kagame of Rwanda and Mahamadou Issoufou of Niger have driven the reform of the African Union and the Continental Free Trade Area, respectively. At a micro technical level, champions of certain annexes can be designated, who can constitute small working groups to facilitate the process.

Tactical and organisational capacity at the technical level is not lacking. At a particularly difficult meeting recently, for instance, after two unproductive days of work, experts readily agreed on some corrective measures: limiting statements to a maximum of two minutes, setting a maximum total of five interventions on an issue, no supporting statements after an intervention, reverting to existing text where no consensus on new proposals was forthcoming, existing bracketed proposals to be put into the built-in agenda for further work in future and decisiveness by the chairperson who was to use her gavel much more to mark decisions reached. These little measures turned the meeting into a success.

Africa started 2018 on a high note. Time is flying though and the momentum needs to be maintained. While structural issues must remain pitched high on the development agenda, the basic unfinished work requires quick thinking, expedition and determination, so that a complete Agreement establishing the African Continental Free Trade Area is in place. Ratification requires appropriate attention and follow up, so that the Agreement enters force sooner rather than later. The pace of negotiating phase two issues can be expedited by drawing on global, regional and national good practices. This is a good time for regional economic integration in Africa, given the political and technical impetus to codify continent-wide templates and blue prints. As Shakespeare says, “There is a tide in the affairs of men, which taken at the flood, leads on to fortune. Omitted, all the voyage of their life is bound in shallows and in miseries.”

 

The author is the Director of Trade and Customs at the COMESA Secretariat