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Building capacity to help Africa trade better
tralac Newsletter • Issue 30 • May 2021

Welcome to the tralac newsletter

The end of June deadline for the completion of the African Continental Free Trade Agreement (AfCFTA) phase 1 negotiations is fast approaching. It is not surprising that tariff concessions and some rules of origin are still on the negotiating table. The import tariff remains important; for some, especially the least developed countries (LDCs), it is an important source of revenue and by comparison with many other taxes, easier to collect. Given its direct impact on the price of the imported good, it also serves to protect the domestic industry. The change in the relative price of the imported to the domestically produced good elicits the desired response from consumers to favour of the cheaper – domestic – product. The tariff is therefore a very important instrument of industrial policy.
The process of preparing a tariff offer is a complex economic and political economy exercise, with an added layer of complex negotiations for countries that belong to a customs union, as they prepare a collective offer to ensure the integrity of the common external tariff. These offers must comply with the agreed modalities for the tariff negotiations. The modalities feature several important issues. The agreed level of ambition, for all, is to liberalise 90% of tariff lines. The remaining 10% is divided into two categories; no more than 7% may be designated ‘sensitive’ and for these products a longer timeframe for tariff reduction is permitted. A good may be designated ‘sensitive’ for food security, national security, or industrial development priorities among other agreed criteria. The final 3% of tariff lines may be excluded from liberalisation. ‘Variable geometry’ is one of the principles of the AfCFTA (Article 5 of the Agreement establishing the AfCFTA). Here this means that while all State Parties agree to the same level of ambition (liberalizing 90% of tariff lines), different time frames apply to LDCs and non-LDCs to achieve this level of liberalization.
In February 2020, the Assembly of the Africa Union welcomed the decision of the so-called G6 countries (Ethiopia, Madagascar, Malawi, Sudan, Zambia and Zimbabwe) to ‘withdraw their reservations in the interest and solidarity of the African continent and to join the rest of the States Parties in implementing the modalities on tariff liberalisation.’ This group of countries had previously indicated that they would find it difficult to achieve the 90% level of ambition and proposed 85% liberalisation instead. This would have been in line with the Article 5 principle of special and differential treatment. With the decision to withdraw this request, special and differential treatment for LDCs will not feature in the tariff regime of the AfCFTA. But as the table below shows, variable geometry does.
  Non-LDCs LDCs
Non-sensitive products 90 percent
90 percent
Time frame 5 years 10 years
Sensitive Products No more than 7 % of tariff lines No more than 7 % of tariff lines
Time frame 10 years
5-year transitional period for liberalization of sensitive products. State Parties and/or customs unions, may start liberalization of their sensitive products in year 6
 13 years
5-year transitional period for liberalization of sensitive products. State Parties and /or customs unions collectively, may start liberalization of their sensitive products in year 6
Exclusion List
Not more than 3 % (accounting for no more than 10 percent of the value of imports from other African countries)
Not more than 3 % (accounting for no more than 10 percent of the value of imports from other African countries)
Although Heads of State decided on 5 December 2020 that trade would begin on 1 January 2021, it is not clear how many of the tariff offers that had been submitted by then, complied with the agreed modalities, and hence the concerted efforts in recent months to ensure compliance with the modalities. The AfCFTA Secretariat reviews the offers of tariff concessions submitted by the negotiating parties to ensure compliance. Much remains to be done, since these offers are the opening gambits in negotiations process.
We monitor intra-Africa trade carefully, and as trade data for 2020 is released we provide regular updates on trade flows and the applicable tariffs; noting that in the AfCFTA it is trade which does not take place under a preferential tariff regime, that will be liberalized. For the latest analysis, see our trade data updates.
Rules of origin negotiations have made progress in recent months. For fisheries products (excluding salted snoek), the wholly obtained rules has been agreed. Definitions of ‘vessels’ and ‘factory ships,’ have also been agreed. Rules of origin for edible oils, automotive products and sugar are still to be finalised. These are sensitive products for many countries.
For an update, see our AfCFTA Rules of Origin guide. A detailed analysis of the Rules of Origin is available here.
We’re also monitoring global trade and broader economic governance developments. As the pandemic continues, we’re monitoring the developments related to the proposal for a waiver of the ‘implementation, application and enforcement of Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) in relation to the prevention, containment and treatment of COVID-19.’ This proposal by South Africa and India in October 2020 and the United States’ recent decision to support this, are examined in a Blog.

News from tralac

We’re very pleased to be collaborating with the International Chamber of Commerce (ICC) and UPS to support Africa’s women traders. We recently launched the eTradeHub – a one-stop portal for trade in Africa. Details of training courses are also available on the portal.
We’ve just completed Module 3 of the tralac Certificate Course. Participants are now preparing for the final oral exams. In collaboration with the East African Law Society, we also offered a short course ‘Reading and Interpreting International Trade Agreements: AfCFTA and EAC.’ Given the demand for this course, we’ll be offering a second course in July – details of dates to follow.
Here are some of our new publications:

Indebtedness in sub-Saharan Africa: The shadow of COVID-19

Realising the One African Services Market through the AfCFTA

The African Continental Free Trade Agreement (AfCFTA): what has South Africa actually offered Africa?

We’re preparing for the 2021 tralac Annual Conference.
Please save the dates: 15-16 July 2021.

We look forward to your feedback and hope that you’ll join us for the Annual Conference.
The tralac team.
7 June 2021


The proposed TRIPS Waiver to respond to the COVID-19 pandemic

In early October 2020, India and South Africa presented a proposal to the TRIPS Council requesting a temporary waiver from the implementation, application, and enforcement of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) in relation to the prevention, containment, and treatment of COVID-19.[1] The proposal had initially been blocked, but in early May 2021, the new US administration under President Biden expressed support for a global waiver on patent protection for coronavirus vaccines. Other countries like the United Kingdom, Japan, and the European Union oppose it.

Difficult negotiations still lie ahead. The main arguments concern protecting the incentive for future pharmaceutical innovation. It is claimed that companies will be reluctant to invest in new technology if they cannot reap the full financial benefit from their successes. However, it has also been pointed out that public funds are often used for research to develop essential medicines.

But the ensuing debate is about more than the financial gains of “big Pharma” or how to get production started in developing countries. There are serious governance implications, in particular in Africa. This will not be the last pandemic; COVID-19 has exposed Africa’s dependence on imported vaccines in a dramatic manner.

Making the AfCFTA and the RECs work

The AfCFTA foresees the co-existence of several African FTAs alongside each other. How will the RECs be blended into the institutional architecture of the AfCFTA and into continental integration schemes and action plans?
Are FTAs making a Comeback? In what Guise and with what Rules?

Many countries are opting for new generation FTAs as a faster and more flexible way to promote free trade amongst the members to such arrangements. One of the explanations is the impasse in the WTO.
Economic Integration is a Challenge: Can Variable Geometry help?

The integration of economies at very different levels of economic development is complex and costly. Variable geometry has become an accepted principle on how to tackle the challenges associated with African countries’ different needs.
REC Integration Approaches and their Implications

The Regional Economic Communities (RECs) pursue a linear approach to economic integration. The stepwise approach may signal commitment to deeper economic integration in a former guise but is it the ideal one?

Recent blogs


Digital nomads – Remote work visas for SA? The recent call by the Western Cape government for South Africa to introduce a one-year remote working visa to boost the tourism industry, has implications which go a long way beyond a small boost to a marginal part of the travel industry... read more
Illicit Trade Patterns in East and Southern Africa. Illicit trading along Africa’s Indian Ocean coastline presents a seemingly intractable set of problems. Illicit trade is a product of underdevelopment and development dynamics working in tandem. Better infrastructure and larger volumes of trade open up more opportunities for smuggling which has effects that undermine development... read more

Commemorating Africa Day – 2021. This year Africa Day is commemorated in the shadow of COVID-19. There are lessons to be learned from the pandemic, but also from domestic governance failures. One is that sustainable economic recovery can only be assured if the levels of investment on the continent is increased... read more


New Publications

Trade Briefs

The African Continental Free Trade Agreement (AfCFTA): what has South Africa actually offered Africa?

In early 2021, the AfCFTA started to become a reality, albeit an agreement with many details still to be finalized. The objective for this trade brief is to examine the African Continental Free Trade Area (AfCFTA) tariff offer by South Africa (actually, this is the Southern African Customs Union (SACU) offer, since SACU makes a collective offer as a customs union) and assess that schedule against the imports into South Africa from non-SACU Africa during the 2019 year. There are many complications in this process that have necessitated this trade brief being an initial and incomplete analysis, but nonetheless it gives some perspective to what South Africa (SACU) offers under the AfCFTA. Since South Africa is by far the largest economy in SACU, South Africa’s imports account for the dominant share of SACU’s imports.

For these reasons, the focus in this trade brief is on South Africa, its imports from African countries, and the tariff offer that South Africa (SACU) has tabled in the AfCFTA negotiations in December 2020.


More recent Trade Briefs


Realising the One African Services Market through the AfCFTA

Negotiations to finalise outstanding issues on Phase 1 topics of goods and services under the AfCFTA are to be concluded in June 2021. For services, progressive liberalisation is envisaged through ‘successive rounds of negotiation’, with substantial liberalisation as the stated threshold. These simple differences in the format and expression of ambition – one numerical and one qualitative, express a fundamental disparity in approach towards the realisation and assessment of liberalisation of trade of goods and services under the AfCFTA.

Indebtedness in sub-Saharan Africa: The shadow of COVID-19

This trade brief will provide an overview of the state of indebtedness (including both public and private debt) for sub-Saharan Africa (SSA). This will cover the period of 2015-2021, with a specific focus on the effect of the COVID-19 pandemic on indebtedness in the continent. Debt-to-gross domestic product (GDP) levels in sub-Saharan Africa have doubled over the last decade to over 56%. Coupled with record economic contractions across the region as a result of COVID-19, this is a recipe for a debt crisis.


Regional Resources

African Continental Free Trade Area (AfCFTA)


Start of trading under the AfCFTA African Continental Free Trade Area (AfCFTA) Agreement began on 1 January 2021. To date, 36 countries have both signed and deposited their instruments of AfCFTA ratification with the AUC Chairperson. Of the 55 AU member states, only Eritrea has yet to join.



AfCFTA Goods Tariff Liberalisation Schedule: Tariff offers and proposed time frame for tariff phase down under the AfCFTA Agreement
South Africa

More resources


tralac maintains a collection of regional and national trade-related resources including copies of the texts and annexes of regional and bilateral trade agreements, copies of various regional protocols, memoranda of understanding and tariff offers, and copies of national legislation and trade-related policy documents.


Please note: Free registration is required to download resources.

Latest AGOA news

Key trade stats for AGOA beneficiaries for the year to end March 2021 / 2020

2020 to March
2021 to March
% Change
Aggregate exports to US: $ 4.41 billion $ 5.97 billion + 35%
- - (Share) of AGOA exports: $ 1,03 billion $ 1,08 million + 4.8%
Total US import duties paid on imports from AGOA beneficiaries: $ 14.6 million $ 13.5 million -8%
Top 5 Exporters (AGOA trade only) 2020 YTD March exports to US 2021 YTD March exports to US Change 2020/21
South Africa 383 484 26%
Nigeria 150 147 -2%
Kenya 129 119 -8%
Angola 3.5 70 1900%
Ethiopia 69 63 -9%
All AGOA countries $1033m $1084m +4.8%

US imports entered under AGOA increased by almost 5% in the year to end March 2021, compared to 2020, reversing the slight decline recorded over the first two months of the year. Amongst the leading ‘AGOA exporters’, South Africa’s year-on-year AGOA trade grew by almost 26% (+20% yoy to February), cementing its position as the leading exporter of AGOA goods. The key driver for this performance is strong export growth in motor vehicles (+64% yoy) and articles of jewellery (+204% yoy), the two leading exports from South Africa that utilise AGOA preferences. Meanwhile, exports in ferroalloys under AGOA declined by 30% to $63m in the period to end March. Kenya and Ethiopia slight declines are the result of lower garment exports during the first three months of 2021 compared to 2020.

National AGOA Strategies

During 2021 a number of new or updated National AGOA Strategies have been published. These – and previous strategies from other AGOA beneficiaries – are available on in the AGOA Strategies section. The most recent publications involve Namibia’s (new) and Botswana’s (updated) AGOA Strategies, which were facilitated through the support of the USAID TradeHub.
The Namibia infographic-styled AGOA brochure has been updated accordingly, with other AGOA brochure updates to follow shortly.

2021 Trade Policy Agenda and 2020 Annual Report

During March 2021, the USTR under the Biden Administration launched its 2021 trade policy agenda and 2020 annual report (download it here). This 308-page document includes sets out key priorities, including ‘the development and reinforcement of resilient manufacturing supply chains, especially those made up of small businesses, to ensure that the United States is better prepared to confront future public health crises’. Covid-19 and economic recovery from its impacts are central themes. Another priority involves trade policies to address opportunities and challenges posed by the digital economy, and to prepare the US for any potential future disruptions to the global trading system. The opening of markets and reduction of trade barriers faced by US exporters are fundamental objectives, since “export-oriented producers, manufacturers, and businesses enjoy greater than average productivity and wages”.
The document also provides and overview of current trade negotiations, concluded negotiations, and existing trade agreements already in place.
Other matters addressed by the report include the US’ trade enforcement activities, WTO matters, trade policy development and a range of other trade related activities (digital trade, intellectual property, trade and labour, trade capacity building – including in Africa – and so forth).

AGOA Business Connector

The AGOA Business Connector is an online facility on 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 within 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.

> Download the AGOA Business Connector Brochure at this link

Download: AGOA guides and info-graphics

tralac has produced a number of info-graphic type brochures (see section on / 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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