Free trading under the auspices of the African Continental Free Trade Area started in January 2021. One year later, several aspects of the trade pact are being successfully implemented as negotiations are ongoing in other areas. Kingsley Ighobor interviewed the Secretary-General of the AfCFTA Secretariat, Wamkele Mene and here are the excerpts.
What is your assessment of the journey so far since the beginning of free trading in January 2021, and what are your top three accomplishments?
The African Heads of State declared that we start trading under the rules of the AfCFTA on the 1st of January 2021. And since then, we’ve reached several important milestones.
First, the number of countries that ratified the agreement increased. We now have 39 state parties to the agreement. This makes it the fastest instrument to be ratified in the African Union. It demonstrates the seriousness and commitment that our Heads of State have for market integration.
Second, we have reached about 87.8 per cent agreement on the rules of origin, which is a very high consensus threshold. There are close to 8,000 products under the World Customs Organisation’s Harmonized System of rules of origin and tariffs, and we have reached agreements on more than 80 per cent of those products.
Going forward, for products where we have agreements, people will be able to trade with certainty and predictability based on the rules of origin that apply. This is important for industrialization and the certainty and predictability of the market.
Another important milestone is that we have operationalized the Protocol on Dispute Settlement. We are in the process of negotiating rules for appointing members of the appellate body of the dispute-settlement body. This sends a signal that Africa is ready to be bound by the rules of trade law, which will boost intra-African trade and investment. So, we’ve made progress, but of course, much remains to be done.
What key challenges have you encountered?
The biggest challenge is that we have 55 countries on the African continent with differentials in levels of economic development and differentials in levels of industrial capacity. Some countries are ready from an industrial capacity point of view to export immediately under AfCFTA rules and some countries will need more time.
Also, we have an annex on trade facilitation, on transit, and on harmonized customs procedures rules. But when it comes to enforcement capacity of the harmonized rules, countries are at different levels of readiness. So, we must keep working to build the capacity of our customs authorities so that they can enforce the rules of origin.
But what do you say to a trader in Accra who wants to export goods to Cote d’Ivoire and still encounters considerable tariff and non-tariff barriers?
In February 2022, we will publish what we call the AfCFTA tariff book, which will include rules of origin and the customs procedures that apply to products. Traders will be able to identify in that tariff book their specific products, know what rules of origin apply to each product and associated tariffs. You may ask why it wasn’t done earlier. That’s because negotiations were still ongoing. Now that we have reached agreements on over 87 per cent of tariff lines, I think that we are in a good position to start trading based on what we have agreed on.
I would also say that no trade agreement is ever concluded and implemented at the same time. Typically, trade agreements are negotiated in phases and implemented in phases. And so, this [AfCFTA] will not be any different from trade agreements around the world. Trade agreements are very complex, very technical, and have far-reaching obligations for countries that negotiate them. Countries tend to take a lot of time to deliberate on the implications and the obligations that they are undertaking. So, I’m not particularly worried. On the contrary, I think that we have a lot to celebrate.
On the rules of origin, you do not have to wait until you reach 100 per cent agreement on all the products?
No, because that can take even longer. The Heads of State were very clear: start trading based on the progress that you have achieved. And we intend to do that with the publication of the AfCFTA tariff book early in 2022.