Nigerian Best Forum . NBF

SOCIETY, BUSINESS and ECONOMY => BUSINESS and ECONOMY => Topic started by: cooljoe on December 27, 2017, 08:13:41 AM

Title: Africa Free Trade Area Coming
Post by: cooljoe on December 27, 2017, 08:13:41 AM
African countries have finally adopted a framework for a Continental Free Trade Area (CFTA) for the continent.

The CFTA is expected to boost Africa?s industrialization, which has been hampered by tariff and non-tariff barriers.

The adopted framework would necessitate a common continent-wide approach to six substantive components of the CFTA agreement namely, non-tariff barriers; rules of origin; investment and cross-border movement of persons, services; liberalisation and regulation; trade remedies and monitoring evaluation.

With the adoption of the CFTA framework, Africa will now be dealt with as a single entity rather than the old practice of negotiating with individual countries, which had always left the continent with fragmented trade regimes.

This was achieved at the end of a two-day African Ministers of Trade (AMOT) conference in Niamey, Niger Republic to deliberate on the much sought after Continental Free Trade Area (CFTA).

The meeting in Niamey was initially designed to conclude the outstanding issues of the Modalities for Tariff Liberalisation that were adopted at the third Meeting of AU Ministers of Trade in June 2017 as well as consider the draft texts of the CFTA Agreement, protocols, annexes and appendixes, expected to come to fruition by the close of 2017.

May countries did not believe the framework would be adopted at the meeting giving that some countries had expressed strong reservations.

Nigeria?s Chief Negotiator Ambassador Chiedu Osakwe, who also served as the Chair of the Senior Trade Officials (STOs) and Negotiating Forum (NF) stated that with the adoption of the framework by the AMOT, ?Africa is in a pole-position to actualize a continental free trade area and zone. Niamey is a turning point and a breakthrough. Our priorities have been met and we have made significant progress.?

He said the first crucial pillar of realizing the full commencement of the CFTA Agenda by 2063 as set out by the AUC has been attained.

According to Ambassador Osakwe, ?in January next year, the report would be laid for signature and the timeline of March, 2018, for the ratification and operationalisation of the CFTA according to AU?s end game calendar will be anchored.?

giving content to the AU Agenda 2063 of a fully operational CFTA.

The United Nations Under Secretary General and Executive Secretary of the Economic Commission for Africa (ECA) Ms. Vera Songwe estimated that ?by eliminating tariffs the CFTA can boost intra-African trade by 52%, and by reducing non-tariff barriers it can be doubled, benefiting African welfare to the tune of $22 billion.?

This is forecast she said is ?to especially benefit Africa?s industrial and value-added exports, which tend to generate more employment opportunities than does Africa?s trade outside the continent, which is instead concentrated on capital-intensive raw materials and extractive resources.?

Songwe noted that ?such export diversification in turn produces more sustainable growth, rather than that reliance on the vicissitudes of international commodity prices. The enlarged continental market fostered by the CFTA can also help to attract more Foreign Direct Investment (FDI) for promoting African output and productivity, while improved agricultural trade is needed to help enable ?Africa to feed Africa?.?

Intra-African trade she said ?remains concentrated on only a limited number of products. As such, ECA research shows that even a exclusion list of 52 products-equivalent to 1% of tariff lines- would have the potential to exclude from liberalization 74% of intra-Africa imports for the average African country.?

Songwe called for caution ?in ensuring that even small exclusion list do not erode the value of the CFTA. If due care is not taken on this matter, it is clear that we will fail our objective of doubling intra-African trade.?

?To ensure the meaningful liberalization of goods, we must keep exclusion list to a minimum. The best way to do this is by double-qualifying any exclusion lists so that they cannot be used to exclude all of the most valuable imports? she said.

For a meaningful CFTA, Songwe advocated that Africa ?must be ambitious in limiting the use exclusion list and focus on the long-run and the bigger picture; that of a unified and consolidated common market in Africa.?