Africa launches negotiations on the Continental Free Trade Area

17 June 2015

On Monday 15 June, African leaders decided to launch negotiations to establish the Continental Free Trade Area (CFTA) by 2017. This decision, taken at the 25th Summit of the African Union, held in Johannesburg, South Africa, follows the launch of the Tripartite Free Trade Area in Cairo on June 10 last week. (See Bridges, 11 June 2015).

"Negotiations on the Continental Free Trade Area are open," said the current chairman of the African Union, and Zimbabwean President, Robert Mugabe.

"I am pleased that we are launching these negotiations following the signing this month of a free trade agreement linking the three regional groups," he added before stressing the crucial importance of the CFTA for the mobility of people and goods across the continent.

Kenyan President Uhuru Kenyatta hailed the launch of negotiations as a critical step toward reducing poverty and doubling the continent’s economic development.

“CFTA means Africa being able to be self-reliant," said President Kenyatta.

The task of establishing such a free trade area is a considerable undertaking. With 54 States, it would be the largest free trade area in the world.

The African Union has set 2017 as the target for the establishment of the CFTA, a goal that seems particularly ambitious. However, African Union Commissioner for Trade and Industry, Fatima Acyl Haram, said the organization is fully aware of the difficulties that may accompany the negotiation of such an agreement.

However, Acyl took advantage of her presence on June 4 at World Economic Forum on Africa to display her optimism and insist that such a time horizon is possible (see Bridges, 11 June 2015).

"There are countries with rich resources, landlocked countries and small island countries. However, with sufficient political will and with our knowledge of the benefits of free trade area, we will succeed, "she stated at the launch of negotiations.

Despite the optimism of the African Union, many observers point out that such integration process may prove particularly difficult. In particular, it will require substantial financial investments, including the improvement of critical infrastructure such as roads and railways.

The liberalisation exercise was initially divided into two negotiation sequences. In the first phase, discussions focused mainly on the issues of tariff liberalisation, rules of origin, trade remedies, and customs and transit procedures, among other elements.

It was originally agreed that trade officials needed to clear these agenda items before entering into the second phase, which addresses trade in services, intellectual property, competition policy, and trade competitiveness.

Phase I officially concluded in December 2014 through the adoption by heads of state and government of the “Declaration on the Conclusion of Negotiations on Phase I Trade in Goods.” Phase II of the negotiations leading up to the launch of the CFTA in the next two years  will now have to tackle unresolved issues, which were postponed to Phase II, in addition to new areas of negotiations.

ICTSD reporting; "African leaders Agree to start free trade negotiations continental zone", Xinhuanet, June 16, 2015; “AU Launches Continental Free Trade Area Negotiations” Voice of America News, June 15, 2015

This artically originally appeared in Passerelles.

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