UCLBS News

September 8, 2021

African Union Continental Free Trade Agreement

Filed under: Uncategorized — Administrator @ 8:53 pm

In March 2018, at the 10th Extraordinary Meeting of the African Union on the AfCFTA, three separate agreements were signed: the African Continental Free Trade Agreement, the Kigali Declaration; and the Protocol on the Free Movement of Persons. The Protocol on Free Movement aims to create a visa-free zone within the AfCFTA countries and to support the creation of the African Union passport. [27] At the Kigali Summit on March 21, 2018, 44 countries signed the AfCFTA, 47 the Kigali Declaration and 30 the Protocol on the Free Movement of Persons. Although it was a success, there were two notable holdouts: Nigeria and South Africa, The two largest economies in Africa. [28] [29] [30] In the preamble to the AfCFTA agreement, eight CIs are designated as “building blocks” of the AfCFTA (see figure on page 3). Trade liberalization under the AfCFTA (beyond those within the CPCs) will first take place between African countries and regions that do not yet have free trade agreements, for example between the East African Community (EAC) and the Economic Community of West African States (ECOWAS). The annex to the AfCFTA report for the African Union Summit on 10-11 February 2019 outlines the next steps; Indeed, the number of intra-African economic communities will initially increase until the AfCFTA is implemented. Finally, African states will need their energy and capacity to negotiate the conclusion of the AfCFTA. Given the current weakness of the multilateral system, they also have an interest in concluding free trade agreements with other partners, particularly in Asia, but also in Latin America and the United States. Of course, Africa`s bargaining power would be greater if African countries could already act together as a pan-African customs union. But the first step is the completion of the AfCFTA. Yulia Vnukova advises in the Trade and Regional Integration Division (ETIRI) of the World Bank.

Based on more than ten years of experience, Yulia`s current work focuses on trade policy and regional integration, with a focus on macroeconomic and microeconomic analysis of trade, trade and sectoral competitiveness, global value chains and private sector development in emerging countries in Europe, in Asia and Africa. One of the most difficult problems for the AfCFTA development process is the concern of smaller countries about competition from larger countries with larger export sectors. The International Monetary Fund points out that intra-African trade flows are dominated by a handful of “hubs”: Côte d`Ivoire, Kenya, Senegal and South Africa. They are ahead of the curve within the AfCFTA and can first expect an increase in their exports. As a first step, 44 countries signed the agreement on 21 March 2018. Nigeria was one of 11 African Union nations that initially did not sign. At the time, Nigerian President Muhammadu Buhari said Nigeria could not do anything that would harm local producers and entrepreneurs. [53] The Manufacturers Association of Nigeria, which represents 3,000 Nigerian producers, welcomed the decision to withdraw from the agreement.

[53] Nigeria`s foreign minister tweeted that further internal consultations were needed before Nigeria could sign the deal. [54] Former President Olusegun Obasanjo said Nigeria`s delay was regrettable. [55] The Nigerian Labor Congress called the agreement a “renewed neoliberal political initiative, extremely dangerous and radioactive,” indicating that increased economic pressure would push workers to migrate under difficult and uncertain conditions. [56] To what extent could the AfCFTA now contribute to intra-African trade? As noted above, it will take a long time for the economic benefits to be felt….

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