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tralac Newsletter • Issue 11 • April 2019
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The AfCFTA enters into force on 30 May
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Welcome to tralac’s April 2019 newsletter. This newsletter focuses on the achievement of a significant milestone for African integration.
On 29 April 2019, Sierra Leone and the Saharawi Republic deposited their instruments of ratification of the Agreement establishing the AfCFTA with the depositary in Addis Ababa. This brought the number of ratifications to 22 – the number required for the AfCFTA to enter into force, in terms of Article 23 of the AfCFTA. On 30 May the AfCFTA enters into force – 30 days after the deposit of the 22nd instrument of ratification, as specified in Article 23. See tralac’s AfCFTA Barometer. We also have a handy e-booklet providing an overview of the AfCFTA, as well as intra-African trade and applicable tariffs – available HERE.
What happens next?
We know that the negotiations on key substantive issues related to trade in goods and trade in services that are still to be completed. Rules of origin negotiations have made substantive progress and we understand that this process is nearing finality. Negotiations on tariff concessions are in the early stages. Member States are currently preparing offers. We have prepared a series of trade and tariff updates for Member States whose trade data for 2018 is already available in the public domain (we use TradeMap from the International Trade Centre). These indicate that trade in a range of products amongst African countries that are not party to the same free trade area, still attracts burdensome tariffs. These countries are trading under most favoured nation (MFN) tariffs, and the forthcoming negotiations will be to reduce reduce tariffs on trade amongst these countries. The ambition is to reduce tariffs on 90% of tariff lines – of the remaining 10%, 3% may be excluded from liberalisation and 7% may be designated “sensitive’ and be subject to longer phase down periods. This will be the contribution of the AfCFTA to reduce tariffs on intra-African trade, given that trade among the Member States of the regional economic communities (RECs) and other trading arrangements will continue according to their specific trade regimes.
This trade data and tariff analysis is available HERE. We also examine key issues related to the tariff and ongoing rules of origin negotiations; see the Blog by Willemien Viljoen on rules of origin and tariffs in the AfCFTA HERE, Specific commitments in the priority services sectors are also to be negotiated for the 5 priority services sectors (communication, transport, financial services, tourism and travel and business services). Services are important in their own right as they contribute to economic activity, trade and create employment. But they are also essential enablers of trade in goods (trade facilitators), contributors to manufacturing competitiveness and essential in the provision of social services to enhance development. 21st century economies are services-intensive. Clear strategies for Africa’s services sector development should accompany the AfCFTA processes to leverage their potential impact for Africa’s development. See the Blog by Ashly Hope on services trade HERE.
Work is also underway to establish important institutions to make the AfCFTA work – these include the Secretariat, the African Trade Observatory and also a continental mechanism to notify and eliminate non-tariff barriers – see the Blog by Vonesai Hove HERE.
At this very important point in the AfCFTA negotiations, there are many important legal and technical issues that require clarification. We have prepared a series of Blogs and Working Papers to answer these questions:
Although we are still focused on finalising phase 1 of the AfCFTA negotiations, and what happens now as the Agreement establishing the AfCFTA enters into force, we need to be preparing for phase 2 of the negotiations. These wills start in the second half of this year. These negotiations will cover cooperation in investment, competition and intellectual property rights. We examine important issues related to these matters in a series of Blog posts: intellectual property rights (Abrie du Plessis); investment policy (Talkmore Chidede); and competition (Trudi Hartzenberg).
The complex AfCFTA negotiations have benefitted from strong political support, and have proceeded at an unprecedented pace. Against the background of the crisis in multilateral trade governance, a trade war between the world’s two largest trading nations and a seemingly intractable attempt by the United Kingdom to leave the European Union, this is very good news. We are mindful of the fact that much remains to be done before trade in goods and services under the AfCFTA can begin. We need to remain committed to the process. Collective efforts will be required to bring the process to completion and then to effectively implement Africa’s comprehensive trade pact.
tralac has been supporting the AfCFTA process since 2012, when the important announcement was made that the Member States of the African Union would establish a continent-wide free trade area – and we remain committed for the long haul. A functional AfCFTA that contributes to Africa’s development is in all our interests, in Africa and globally.
We look forward to your feedback, and to celebrate Africa Day with you on 25 May.
The tralac team
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tralacBlog is a forum to share and engage with the views of tralac researchers and Associates, as well as guest contributors, on pressing regional integration and trade policy issues affecting African countries in order to encourage relevant, topic-related discussion and debate.
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New Short course
Understanding International Trade Agreements
22-24 July 2019, Cape Town, South Africa
The objective is to provide trade officials and private sector stakeholders with basic skills and background information on how International Trade Agreements are negotiated and implemented, and how to read the texts of these agreements. We will use the African Continental Free Trade Agreement as a case study.
International trade agreements are legal instruments which apply between states. They need domestic follow-up action to ensure they are correctly implemented. Disputes between the state parties about the implementation and interpretation of international agreements (also known as treaties) are in principle justiciable; before international dispute settlement mechanisms. Since private firms are, as a rule, the traders, investors, producers and service providers, their rights need protection too.
This course will cover, inter alia, the following:
- What are International Agreements? How are they negotiated and adopted?
- Who are the Parties to such agreements?
- What do International Trade Agreements aim to achieve? How are they implemented?
- How to read the text of an international trade agreement providing for liberalising trade in goods, and in services
- What are regional integration agreements about?
- What happens to existing trade liberalisation obligations once a state becomes a party to a new trade agreement?
- Where does one find the texts of trade agreements binding a particular state?
Basic materials and examples of relevant legal texts will be provided and be discussed. Practical exercises and simulations will be included.
Who should attend?
This course is designed for participants involved in the implementation of trade agreements or required to understand them as part of their own work – both from government and non-state organisations. Participation does do not require formal legal training in this specialised field.
Course fee?
ZAR 5 000
The course will take place at the Newlands Sun Hotel, Cape Town. tralac has negotiated a preferential accommodation rate (successful applicants will be eligible for the preferential room rate). Participants are responsible for their own travel and accommodation arrangements and costs. A small number of scholarships are available.
Number of participants
We will accept maximum 25 participants.
Applying for the course
If you are interested to take the course, please send a video (max one minute) via WhatsApp to +27 835270871. The video should include a brief introduction (your name, organizational affiliation and current work profile), and why you want to take this course. If you are applying for a scholarship, please motivate.
Deadline for video applications: 3 June 2019. You will be informed of the outcome of the selection process by 7 June 2019.
Download this info sheet.
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Capacity Building Workshop on Stakeholder Engagement on African Trade Policies and ECOWAS Regional Trade Policy Dialogue Forum
The African Union Commission (AUC), in partnership with the ECOWAS Commission and the German Corporation for International Cooperation (GIZ), organized a Capacity Building Workshop on Stakeholder Engagement on African Trade Policies and ECOWAS Regional Trade Policy Dialogue Forum from 24-27 April 2019 in Abuja, Nigeria.
On invitation of the African Union Commission, the Trade Law Centre (tralac) represented by its Alumni took part in this workshop. These alumni were:
- Chikeze Adindu Isiguzo – Nigeria (Trade in Services)
- Cham Etienne Bama – Cameroon (Trade in Goods)
Placed under the chairmanship of the Minister of Industry, Trade and Investment of the Federal Republic of Nigeria, represented by Mr. Jonathan Ubani, the four-day workshop aimed at training and building the capacity of stakeholders in ECOWAS Member States and Regional Economic Communities (RECs) on trade and trade-related policies as well as in the formulation, negotiation and implementation of trade policies. While opening the workshop, Mr. Ubani expressed Nigeria’s readiness to sign the AfCFTA after the Presidential Committee for Impact and Readiness Assessment of the AfCFTA handed in its report.
Read more in tralac’s alumni report and download the official AU report for further details.
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Visiting students from University of Venda
tralac hosted the final year LLB students from the University of Venda, who are taking the International Trade Law elective, on 16 May. The students were accompanied by their lecturer Advocate Ophrey Shibambu, who had arranged the visit. He has requested follow up engagement, and we look forward to host students from Venda University again.
We prepared a programme, covering global trade governance developments, including the United States-China trade war, as well as the African Continental Free Trade Area negotiations, ratification and entry into force. The students raised many important questions related to Africa’s trade governance agenda, and also practical aspects of legal practice. Some of them will continue their studies to Masters level, while others will do articles on their path to become practicing lawyers. Supporting students as they prepare to make contributions to strengthening not only international trade governance, but also governance more generally.
The students who visited tralac were:
- Dzimbahe Mdivho
- Zandile Mahlalela
- Natasha Ndaza
- Mathebula Tintswalo
- Confidence Mabaso
- Sanelisiwe Dube
- Chidochashe Gowera
- Shamaine Mache
- Nemukula Thuso
- Sikhwari Tondani
- Munonela Rinaiwe
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The AGOA Business Connector is a new online facility on AGOA.info and aims to help enable trade and business connections between producers, exporters, importers, sourcing agents, trade-related service suppliers including trade finance, logistics and related services, support organisations such as business chambers and exporter associations and others, both from sub-Saharan African AGOA beneficiary countries and the United States. Registered users are also able to list their businesses or professional trade-related service on the platform, and to communicate with other listings through a messaging facility.
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New: Searchable United States tariff database | AGOA products list
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The AGOA products database on AGOA.info has been enhanced through the inclusion of a simplified (yet full) US tariff database, providing six relevant searchable fields: tariff code (HTS), product description, AGOA status (eligibility), GSP status, standard tariff (MFN basis) as well as the non-MFN tariff (when goods enter the US from a non-WTO Member State without claim of any special preferences). Follow the link here: |
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AGOA guides and info-graphics
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tralac has produced a number of info-graphic type brochures (see section on AGOA.info / Exporter Toolkit) covering a range of AGOA-related topics, including on AGOA’s legal provisions with regard to eligibility and annual/out of cycle reviews, rules of origin, AGOA FAQs, sector-focused brochures (textiles and clothing, agriculture), as well as national AGOA brochures relating to Botswana, Ethiopia, Ghana, Kenya, Lesotho, Madagascar, Mauritius, Namibia, Nigeria, South Africa and Tanzania. |
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Key trade stats for AGOA beneficiaries to end March 2019
Aggregate exports to US: 2019 YTD to March: $ 4.54 billion (down 29% yoy)
(Share) of AGOA exports: 2019 YTD to March: $ 1.84 billion (represents 41% of total exports)
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The sharply lower aggregate exports to the United States by AGOA beneficiaries combined is mainly due to a 50% drop in the value of Nigeria’s oil exports to the US (relative to the comparative period in 2018), while South Africa’s exports are also significantly lower (- 18%) for the January-March 2019 period. In contrast, US exports from Ghana (+61%), Congo-Brazzaville (+113%), Ethiopia (+53%) and Mauritius (+29%) have shown significant year-on-year increases.
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