CFTA to enable Africa overcome economic limitations

Elizabeth Christopher,Abuja

The Continental Free Trade Agreement CFTA will enable African economies to overcome the limitations of small fragmented markets in a single economic space.

This was the position of  the President of the Republic of Niger, Mahamadou Issoufou, who is the African Union Champion for the CFTA, in a stirring opening address the third meeting of the Senior Trade Officials (STO) and the African Ministers of Trade (AMOT) in Niamey, Niger.

He said CFTA will create a market of over a billion people with an aggregate GDP of close to US $4 trillion. Industrial development is only possible if Africa’s markets are viable, the President said.

Other speakers at the opening ceremony, including the AU Trade and Industry Commissioner, Albert Muchanga noted that the CFTA will stimulate investment flows and the development of supply chains across the continent. But trade liberalization must also be accompanied by infrastructure development, improved trade facilitation and efforts to overcome non-tariff barriers, he emphasized.

For his part, Minister Davies said the CFTA is integral to Africa’s “development regionalism” as a key pillar of structural transformation in an era of rapid technological change.

The preceding technical discussions in the CFTA-NF and the STO paved the way for the AMOT to adopt the CFTA modalities or framework for goods and services liberalization.

For the liberalization of trade in goods, it was agreed to liberalize 90 per cent of tariff lines with flexibility accorded in the remaining 10 per cent for sensitive and excluded products.  Further disciplines will be established through negotiations for the timeframe for liberalization, qualifications for sensitive products, and for a method to review excluded products.

The modalities for services encompass a common positive list approach for progressive services liberalization. The priority sectors for liberalization will be determined without any prior exclusion of any service sector or supply mode.

The African Trade Policy Centre (ATPC) at the ECA helped to facilitate the goods modalities discussion through three technical presentations that highlighted the problem of nuisance tariffs, that is tariffs that are fairly low and generate little revenue; the risk associated with sensitive and excluded products in cases where trade is highly concentrated in these products; and the expected impact of exclusions.

Following the adoption of the modalities, further work is envisaged to establish the new tariff schedules, to apply the disciplines on excluded and sensitive products, and on the terms of services liberalization in the priority sectors.  The remaining CFTA agenda also includes work on a draft text to establish commitments in a range of disciplines including rules of origin, trade remedies, customs cooperation and trade facilitation. Additional meetings have been scheduled to conclude this work by the end of the year which is the deadline set by the AU Summit for the conclusion of the CFTA negotiations.

In addition, to the milestone that was reached in the adoption of the CFTA modalities, the ATPC facilitated STO and AMOT discussions of the issues under consideration for the 11th WTO Ministerial Conference (MC 11), to be held in Buenos Aires in December this year. The forthcoming mid-term review of the US-Africa Growth and Opportunity Act (AGOA) to be held in Lome in August was also discussed.

Ime N