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Africa – Continental Free-Trade Agreement

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Negotiations for pan-African free trade make progress, although there remains widespread political opposition and significant logistical challenges.

On February 26th the United Nations (UN) Economic Commission for Africa reported that a group of seven experts from the regional economic commissions had met to discuss plans for a Continental Free Trade Agreement (CFTA).

The talks were hosted by the African Development Bank (AfDB) to review the possibilities for such an agreement in line with current African Union (AU) treaties. The talks also discussed the CFTA plan including elements to eliminate import duties and other trade barriers.

The plans were originally proposed in April 2015 when regional economic commissions met as part of the first CFTA organising forum. The current target date for the implementation of the agreement is 2017

Earlier on June 10th 2015 the CFTA became closer to a reality as 26 countries signed a Tripartite Free Trade Agreement (TFTA) in Egypt as representatives of the Southern African Development Community (SADC), the East African Community (EAC) and the Common Market for Eastern & Southern Africa (COMESA) agreed a deal.

According to the UN’s Africa Renewal, the combined GDP of the 26 countries is in the region of US$1.3 trillion and the population estimated at roughly 565 million. However other economic commissions – such as the Arab Magreb Union (AMU), the Economic Community of West African States (ECOWAS) and the Economic Community of Central African States (ECCAS) – are not party to the agreement.

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Fifty-one African countries are signatories of the 1995 Abuja Agreement which mandates that all regional economic commissions should sign up to the free trade agreement before 2017 in anticipation for a proposed African Economic Commission in 2028.

According to Jason Kapkirwok, Senior Director of TradeMark East Africa, an organisation that supports trade growth in East Africa, “It has the potential to increase economies of scale through integration, will increase demand for the region’s goods and services and make the region more attractive to foreign investments,” reported African Renewal

Total continental trade between African countries stands at between 10-12%, whereas in Europe the figures are closer to 60%. Economic powerhouses South Africa and Egypt are heading the agreement, followed by Kenya, Angola, Mauritius, Mozambique, DR Congo, Ethiopia.

However the high expectations from the proposed free trade deal have been questioned; analysts have commented on incoherent national trade policies which may hinder any pan-African deal. There are also questions around whether there is the poilitical will to implement such an agreement.

Economic and social differentiation between African economies has also sparked fears that such an agreement will be to the advantage of the larger and more dominant economies, and at the expense of more economically dependant countries. Globally debates surrounding free trade areas, particularly the North Atlantic Free Trade Agreement (NAFTA) and the proposed Trans Atlantic Trade and Investment Partnership (TTIP), have become increasingly polarised.

Find out more in the Africa Research Bulletin:

EAST AFRICAN COMMUNITY: Intra-Continental Trade Boost
Economic, Financial & Technical Series
Volume 52, Issue 12, Pp.21089C–21090B

TUNISIA – EU: Free Trade Talks
Economic, Financial & Technical Series
Volume 52, Issue 10, Pp.21021A–21022C

EAC – SADC – COMESA: Tripartite Free Trade Area
Economic, Financial & Technical Series
Volume 52, Issue. 5, Pp.20837A–20838C

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