Building an Inclusive Continental Free Trade Area

20 September 2017

In January 2012, African leaders adopted the decision to establish a Continental Free Trade Area (CFTA) by the indicative date of 2017, an important step in the African Union’s larger integration ambition of creating a Continental Customs Union and, ultimately, a full-fledged African Economic Community. Since the formal launch of negotiations in June 2015, significant progress has been reported, but information about the actual substance of the talks remains scarce. According to statements by various African officials, CFTA members seem to be on track to conclude Phase 1 negotiations – covering trade in goods and services – and adopt an agreement by the end of the year. It is with this goal in mind that negotiators will meet again in early October.

On a continent that trades very little with itself, in particular as compared to other regions, hopes are high that the CFTA will significantly boost intra-regional trade. By doing so, and given that intra-African trade is more diversified than Africa’s trade with the rest of the world, the CFTA could play an essential role in supporting the continent’s industrialisation efforts.

But while the CFTA’s potential is promising, the task at hand is also immense. In light of the difficulties encountered by most of Africa’s regional economic communities in advancing their integration processes at the sub-regional level, one quickly realises that establishing a functional single market between all 55 African Union (AU) member states will be uniquely complex. Moreover, the CFTA will not impact all partner countries in the same way. At a time of growing scepticism towards trade liberalisation, it is thus essential to ensure that the CFTA’s distributional impacts are well understood, and that appropriate flanking measures are implemented to minimise adverse effects and ensure a broad distribution of benefits among African citizens from this mega trade agreement. What are the key factors in setting up an operational CFTA? And how can African negotiators and policymakers ensure the agreement responds to the needs of the continent’s peoples in an inclusive way?

This issue opens with a special interview with Albert Muchanga, the AU’s Commissioner for Trade and Industry, in which he provides exclusive insights on the CFTA negotiating process and what lies ahead until the end of the year and beyond.

This interview is complemented by four pieces, all looking at the CFTA from a different perspective. While David Luke and Jamie MacLeod identify a number of central elements in building a win-win and successful CFTA, Caroline Dommen presents the mains recommendations of a recent human rights impact assessment of the proposed agreement. Mia Mikic, for her part, looks at the experience of the Association of Southeast Asian Nations (ASEAN) and reflects on how it can inform the CFTA process. Finally, Jacob Kotcho analyses the challenges in terms of policy coherence in the CFTA negotiations.

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20 September 2017
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