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= African Continental Free Trade Area = From Wikipedia, the free encyclopedia Jump to navigationJump to search Not to be confused with African Free Trade Zone. The African Continental Free Trade Area (AfCFTA) is a free trade area founded in 2018, with trade commencing as of 1 January 2021. It was created by the African Continental Free Trade Agreement among 54 of the 55 African Union nations. The free-trade area is the largest in the world in terms of the number of participating countries since the formation of the World Trade Organization. Accra, Ghana serves as the Secretariat of AfCFTA and was commissioned and handed over to the AU by the President of Ghana Nana Akufo-Addo on August 17, 2020 in Accra.

The agreement was brokered by the African Union (AU) and was signed on by 44 of its 55 member states in Kigali, Rwanda on March 21, 2018. The agreement initially requires members to remove tariffs from 90% of goods, allowing free access to commodities, goods, and services across the continent. The United Nations Economic Commission for Africa estimates that the agreement will boost intra-African trade by 52 percent by 2022. The proposal was set to come into force 30 days after ratification by 22 of the signatory states. On April 2, 2019, The Gambia became the 22nd state to ratify the agreement, and on April 29 the Saharawi Republic made the 22nd deposit of instruments of ratification; the agreement went into force on May 30 and entered its operational phase following a summit on July 7, 2019.

The general objectives of the agreement are to:


 * create a single market, deepening the economic integration of the continent
 * establish a liberalised market through multiple rounds of negotiations
 * aid the movement of capital and people, facilitating investment
 * move towards the establishment of a future continental customs union
 * achieve sustainable and inclusive socioeconomic development, gender equality and structural transformations within member states
 * enhance competitiveness of member states within Africa and in the global market
 * encourage industrial development through diversification and regional value chain development, agricultural development and food security
 * resolve challenges of multiple and overlapping memberships

Contents

 * 1History
 * 1.1Background
 * 1.2Negotiations
 * 1.32018 Kigali Summit
 * 1.4Drafting of further protocols
 * 2Institutions
 * 3Implementation
 * 4Membership
 * 4.1Nigerian opposition
 * 4.2Current Status
 * 4.3List of signatories and parties to the agreement
 * 4.4Other AU member states
 * 5Human rights assessment
 * 6See also
 * 7Notes
 * 8References
 * 9External links

Background[edit]
In 1963 the Organization of African Unity was founded by the independent states of Africa. The OAU aimed to promote cooperation between African states. The 1980 Lagos Plan of Action was adopted by the organization. The plan suggested Africa should minimize reliance upon the West by promoting intra-African trade. This began as the creation of a number of regional cooperation organizations in the different regions of Africa, such as the Southern African Development Coordination Conference. Eventually this led to the Abuja Treaty in 1991, which created the African Economic Community, an organization that promoted the development of free trade areas, customs unions, an African Central Bank, and an African common currency union.

In 2002, the OAU was succeeded by the African Union (AU), which had as one of its goals to accelerate the "economic integration of the continent". A second goal was to "coordinate and harmonize the policies between the existing and future Regional Economic Communities for the gradual attainment of the objectives of the Union."

Negotiations[edit]
At the 2012 African Union summit in Addis Ababa, leaders agreed to create a new Continental Free Trade Area by 2017. At the 2015 AU summit in Johannesburg, the summit agreed to commence negotiations. This began a series of ten negotiating sessions which took place over the next three years.

The first negotiation forum was held in February 2016 and held eight meetings until the Summit in March 2018 in Kigali. From February 2017 on the technical working groups held four meetings, where technical issues were discussed and implemented in the draft. On March 8–9, 2018 the African Union Ministers of Trade approved the draft.

2018 Kigali Summit[edit]
In March 2018, at the 10th Extraordinary Session of the African Union on AfCFTA, three separate agreements were signed: the African Continental Free Trade Agreement, the Kigali Declaration; and the Protocol on Free Movement of Persons. The Protocol on Free Movement of Persons seeks to establish a visa-free zone within the AfCFTA countries, and support the creation of the African Union Passport. At the summit in Kigali on 21 March 2018, 44 countries signed the AfCFTA, 47 signed the Kigali Declaration, and 30 signed the Protocol on Free Movement of People. While a success, there were two notable holdouts: Nigeria and South Africa, the two largest economies in Africa.

One complicating factor in the negotiations was that Africa had already been divided into eight separate free trade areas and/or customs unions, each with different regulations. These regional bodies will continue to exist; the African Continental Free Trade Agreement initially seeks to reduce trade barriers between the different pillars of the African Economic Community, and eventually use these regional organizations as building blocks for the ultimate goal of an Africa-wide customs union.

Drafting of further protocols[edit]
Negotiations continued in 2018 with Phase II, including policies of investment, competition and intellectual property rights. In January 2020, AU Assembly negotiations are envisaged to be concluded. A draft is expected for the January 2020 AU Assembly.[needs update]

Institutions[edit]
The following institutions were established to facilitate the implementation of the free trade area. As a result of Phase II negotiations more committees may be established via protocols.

The AfCFTA Secretariat will be responsible for coordinating the implementation of the agreement and shall be an autonomous body within the AU system. Though it will have independent legal personality, it shall work closely with the AU Commission and receive its budget from the AU. The Council of Ministers responsible for trade will decide on the location of the headquarter, structure, role and responsibilities. The Assembly of the African Union Heads of State and Government is the highest decision-making body. It is likely to meet during the AU Summits. The Council of Ministers Responsible for Trade provides strategic trade policy oversight and ensures effective implementation and enforcement of the AfCFTA Agreement.

Several committees have been established, for trade in goods, trade in services, on rules of origin, trade remedies, non-tariff barriers, technical barriers to trade and on sanitary and phytosanitary measures. Dispute resolution rules and procedures are still being negotiated, but will presumably include designation of a dispute resolution body. The Committee of Senior Trade Officials implements the Council's decisions. The Committee is responsible for the development of programs and action plans for the implementation of the AfCFTA Agreement.

Implementation[edit]
The AfCFTA is set to be implemented in phases, and some of the future phases still under negotiation.

At the Kigali summit, areas of agreement were found 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 goods and services liberalization. There was also agreement to reduce tariffs on 90% of all goods. Each nation is permitted to exclude 3% of goods from this agreement.

The 12th Extraordinary Session of the African Union on AfCFTA was called to launch the new agreement into its operational phase, which was hosted in Niamey on 7 July 2019.

At its launch, five operational instruments that will govern the AfCFTA were activated: "the rules of origin; the online negotiating forum; the monitoring and elimination of non-tariff barriers; a digital payment system; and the African Trade Observatory."

Some Phase One issues that remain to be negotiated include the schedule of tariff concessions and other specific commitments. Negotiations are also underway to see which city will host the AfCFTA.

Negotiations for Phase II began in February 2019. These negotiations will cover protocols for competition, intellectual property, and investment. Negotiations on Phase II issues are expected to finish in 2020.

After months of delay because of the COVID-19 pandemic in Africa, the AfCFTA officially but largely symbolically launched on January 1, 2021.

Membership[edit]
As of July 2019, 54 of the 55 African Union states had signed the agreement, with Eritrea the only country not signing the agreement. Of these member states 27 have deposited their instrument of ratification.

After the Kigali summit, more signatures were added to the AfCFTA. At the African Union summit in Nouakchott on 1 July 2018, five more nations joined the agreement, including South Africa. Kenya and Ghana were the first nations to ratify the agreement, depositing their ratification on 10 May 2018. Of the signatories, 22 needed to ratify the agreement for it to come into effect, and this occurred on 29 April 2019 when both Sierra Leone and the Sahrawi Arab Democratic Republic ratified the agreement. As a result, the agreement came into force 30 days later on 30 May 2019; at this point, only Benin, Nigeria, and Eritrea had not signed. Outstanding issues like the trade concession agreements and rules of origin remain under negotiation.[when?]

Eritrea was not part of the initial agreement due to an ongoing state of war, but the 2018 peace agreement between Ethiopia and Eritrea ended the conflict and ended the barrier to Eritrean participation in the free trade agreement.

At this summit, Benin and Nigeria signed the agreement, leaving Eritrea as the only African state not a part of this agreement; Eritrea has since asked to join the agreement. Gabon and Equatorial Guinea also deposited their ratification at this summit. At the date of the launch, there were 27 states who had ratified the agreement.

South Africa, Sierra Leone, Namibia, Lesotho and Burundi have since signed the AfCFTA during the 31st African Union Summit in Nouakchott. As of July 2019, 54 states have signed the agreement.

Nigerian opposition[edit]
Nigeria was one of the last nations to sign the agreement. At 200 million people, Nigeria is Africa's most populous country and has about the population of the second and third most-populous countries, Ethiopia and Egypt, combined, each of which have a population around 98 million. With a nominal GDP of US$376 billion, or around 17% of Africa's GDP, it is just ahead of South Africa, which accounts for 16% of Africa's economy. Because Nigeria is such a significant country in terms of its population and its economy, its absence at the initial signing of the agreement was particularly conspicuous. South African President Cyril Ramaphosa underscored that in comments on 12 July 2018 and commented, "The continent is waiting for Nigeria and South Africa. By trading among ourselves, we are able to retain more resources in the continent." South Africa later signed the agreement.

44 countries initially signed the agreement on 21 March 2018. Nigeria was one of 11 African Union nations to avoid initially signing. At the time, Nigerian President Muhammadu Buhari said that Nigeria could not do anything that would undermine local manufacturers and entrepreneurs. The Manufacturers Association of Nigeria, which represents 3,000 Nigerian manufacturers, praised the decision to back out of the agreement. The Nigerian foreign minister tweeted that more domestic consultation was needed before Nigeria could sign the agreement. Former president Olusegun Obasanjo said Nigeria's delay was regrettable. The Nigeria Labour Congress called the agreement a "renewed, extremely dangerous and radioactive neoliberal policy initiative", suggesting increased economic pressure would pressure workers into migration under difficult and unsafe conditions.

On 21 July 2018, five more nations signed the agreement, including South Africa. At that time, the Nigerian government emphasized its non-participation was a delay, not a withdrawal, and promised to soon sign the agreement. As the foreign minister had earlier emphasized, the Nigerian government intended to consult further with local businesses in order to ensure private sector buy-in to the agreement.

As the Nigerian government continued to consult with local business groups in the latter half of 2018, a key concern was whether the agreement adequately prevented anti-competitive practices such as dumping. As 2018 drew to a close, former President Olusegun Obasanjo said the delay was "regrettable", emphasizing the lack of trade in goods amongst African countries, the difficulties in travelling from one African country to another, and the colonial legacy which these restrictions on Africa's growth represented. The government steering committee in charge of the consultative process was due to release its report on the agreement in January 2019.

Nigeria's president announced on 2 July 2019 that Nigeria would sign the AfCFTA in Niger the following week. Nigeria signed the AfCFTA on 7 July 2019.

Current Status[edit]
Most AU member states have signed the agreement. Benin, Botswana, Eritrea, Guinea-Bissau, Nigeria, and Zambia did not initially sign the agreement. President of Nigeria Muhammadu Buhari was particularly reluctant to fearing it would hurt Nigerian entrepreneurship and local industries. On July 7, 2019 Nigeria and Benin committed to signing the Africa free trade at the 12th extraordinary session of the assembly of the union on AfCFTA; leaving Eritrea as the only nation out of the 55 African Union Member States not to sign up to the deal.

The African Continental Free Trade Area did not come into effect until 22 of the signing countries ratified the agreement, which occurred in April 2019 when The Gambia became the 22nd country to ratify it. As of August 2020, there are 54 signatories, of which at least 30 have ratified and 28 have deposited their instruments of ratification. The three countries that have ratified but not yet deposited their ratification are reported to be Cameroon, Angola, and Somalia though Morocco enacted a law authorizing ratification in 2019.

Other AU member states[edit]
Eritrea has not signed due to tensions with Ethiopia, but following the 2018 Eritrea–Ethiopia summit the AU Commissioner for Trade and Industry now expects Eritrea to sign the agreement.

Human rights assessment[edit]
A July 2017 United Nations Economic Commission for Africa report argues that the CFTA may contribute to tackling poverty and inequality as its wide scope will facilitate structural changes in African economies. It is seen as a step towards meeting the African Union’s Agenda 2063 and the Sustainable Development Goals. The document was targeted to ensuring human rights were considered within the negotiations.

According to FAO, recognizing the intersections of gender, agriculture, and trade, it is critical to ensure that the implementation of the CFTA addresses the nuanced and varied challenges that women face '''. It is vital that the operationalization of the CFTA agreement ensure that future trade policies, practices, and regulations promote gender equality and the empowerment of women and girls on the African continent, especially in supporting women to seize the new opportunities created ‘in agriculture’ by the CFTA . Implementation of the agreement that is not inclusive of women could result in a widening gender gap by negatively affecting Women-led micro, small, or medium-sized enterprises and those who rely on informal trade (including cross border) for their livelihoods.'''