Crafting a Robust CFTA: The Human Rights Contribution
Can African countries simultaneously foster trade liberalisation, economic growth, and human rights in the context of the Continental Free Trade Area (CFTA)? A recent study argues that they can, and that it would make economic and political sense for them to do so.
The Continental Free Trade Area (CFTA) offers an opportunity for African countries to boost intra-African trade and strengthen their economies through diversification, structural transformation, and enhanced efficiency. This can help them meet the poverty-related goals and the human rights objectives set out in Africa’s Agenda 2063 and the global 2030 Agenda for Sustainable Development. Against this background, the UN Economic Commission for Africa and the Friedrich-Ebert-Stiftung have carried out an assessment of possible human rights impacts (HRIA) of the CFTA, with support from the Office of the United Nations High Commissioner for Human Rights. Factoring human rights in at an early stage helps ensure that new trade policies are robust, inclusive, and sustainable. This is so for a range of reasons.
We know that the impacts of trade and investment liberalisation are unevenly distributed both between and within countries. These distributional effects are insufficiently factored into trade and investment policy. Taking into account the specific situations of different sectors of the continent’s population and anticipating the ways in which liberalisation may affect different groups provides the basis for policy-makers to devise trade measures in such a way that adverse effects are minimised. Viewing economic development strategies through a human rights lens provides a framework within which distributional consequences can be better appreciated, with a view to avoiding impacts which discriminate against those who are most vulnerable. Doing so also enables the design of flanking measures to support adversely affected groups. This is important from an economic and political perspective as much as from a human rights perspective: inequality can lead to less stable, less efficient economic systems, stifle economic growth, and create the conditions for social unrest.
Clearly acknowledging the vulnerabilities and needs of those who are likely to lose out from liberalisation gives those who favour the CFTA an opportunity to highlight the economic and social benefits of trade and engage constructively with those who are concerned about unfavourable effects. This is particularly important today, as expressions of populist anti-globalisation sentiment contribute to growing scepticism around the world towards regional integration and trade agreements. These sentiments are often driven by concerns that the benefits of trade and globalisation are unfairly concentrated in the hands of a few, whilst the many suffer adverse effects in terms of employment and livelihoods.
The human rights framework
All states negotiating the CFTA have committed themselves to respect, protect, and fulfil human rights, whether through ratification of the African Charter of Human and Peoples’ Rights (ACHPR) or of global treaties such as the International Covenant on Economic, Social and Cultural Rights (ICESCR), as well as through regional economic communities (RECs) and policy commitments such as Agenda 2063.
As economies and societies change, people have to adjust. Even the most inclusive and beneficial changes may leave some people worse off. Human rights do not preclude change, but require that changes be part of a deliberate strategy towards the fulfilment of human rights, that likely impacts be monitored, and that discrimination be avoided.
Human rights impose obligations of conduct as well as obligations of result. Obligations of conduct require that action be reasonably calculated to realise the enjoyment of a particular right. Obligations of result require states to achieve specific targets to satisfy a detailed substantive standard. The required substantive standards have been developed in detail by human rights bodies both at the African and global level and provide useful references for governmental action relating to economic policy.
Human rights law recognises that it may not be possible for a state to realise economic, social, and cultural rights immediately. But some obligations are immediate. These include taking steps towards the progressive realisation of human rights, ensuring respect for minimum core elements of human rights, preventing discrimination, and monitoring progress towards the realisation of human rights. Moreover, human rights require respect for procedural principles, such as the right to information, to freedom of expression, to participation in decision-making and in public affairs, and the right to effective remedies.
Methodology and focus
The methodology for this human rights impact assessment (HRIA) of the CFTA comprised a combination of desk research, interviews with stakeholders and experts, case studies, and peer review. The analysis focused on women, youth, and rural food producers, as these groups can particularly benefit from new economic opportunities, whilst being especially vulnerable to the adverse effects the CFTA might have.
The potential impacts of the CFTA were considered in case studies which focused on informal cross-border trade and on food production. Informal cross-border trade significantly contributes to regional integration, and is essential to the livelihoods of some of Africa’s most vulnerable people, particularly women and youth. Agriculture is the main source of livelihood for the majority of Africans and it will remain of critical importance as the continent’s population grows. The case studies drew on field work, as well as surveys of qualitative and quantitative evidence.
The HRIA considered the human rights impacts of liberalisation of trade in goods and services – elements covered in the first phase of CFTA negotiations. Investment, competition, and intellectual property policy have significant human rights implications, but as they are scheduled for the second phase of CFTA negotiations, this assessment did not analyse them.
Main findings and policy recommendations
Based on the analysis carried for the assessment, the HRIA report formulates a number of detailed recommendations. Some of these are addressed to CFTA negotiators and include specific indications as to possible content of CFTA provisions; other recommendations concern measures that can usefully accompany and complement the CFTA to facilitate an inclusive, sustainable, and human rights-consistent outcome. This section summarises some of the main recommendations.
Ensure broad consultation, participation and data gathering
Lack of public participation and consultation is a recurring criticism of trade agreements, and the CFTA is no exception. Research for this assessment confirmed that consultations around the draft text were limited to a narrow group of already-involved actors, when they took place at all. This is in spite of the fact that the CFTA Draft Strategic Framework emphasises that the process must be inclusive and involve “not only governments and RECs but also other stakeholders such as the private sector, civil society, media, parliamentarians and development partners.”
When a wide range of views are taken into account prior to the conclusion of a trade agreement, a more robust and sustainable outcome results. Inclusive processes help countries set their trade policy with a deep understanding of their national context. African civil society groups can bring expertise and knowledge to the table, thus strengthening governments’ capacities to put forward negotiating options that respond to the breadth of needs within their country.
The HRIA recommends that the relevant actors – whether national governments, regional economic communities and those hosting CFTA negotiating fora – increase their efforts to reach out to all stakeholders and ensure that the voices of vulnerable and marginalised groups are taken into account. Some, such as small-scale private sector operators, women, and rural populations, may find it hard to access negotiating fora, so proactive measures must be taken to reach these groups.
Related to this, the report recommends that governments and international agencies improve the availability and quality of data. Data is an essential basis for the elaboration of clearly stated and carefully targeted policies. Some important actors in Africa’s economy, such as women or informal cross-border traders, are often insufficiently acknowledged in available data. Better and more disaggregated data collection can help minimise adverse effects on these groups and maximise economic benefits, drawing on their under-recognised potential.
Integrate and address disaggregated effects of trade and investment measures
The human rights approach reminds us that placing too much reliance on conventional economic measurements of economy-wide potential gains arising from liberalisation can overshadow distributional impacts. Recent economic modelling confirms that the CFTA will impact different countries and different socio-economic groups in different ways. Trade liberalisation can, for instance, exacerbate prevailing gender inequalities and worsen women’s economic and social status. Yet gender equality is shown to lead to faster economic growth and lower rates of poverty.
The CFTA process provides African countries with an opportunity to address existing inequalities as well as those that may result from trade liberalisation. This will require ensuring that impacts of the proposed trade and investment provisions are measured in a disaggregated way and that appropriate flanking measures are put in place. A continental simplified trade regime, for example, would allow small-scale cross-border traders to better take advantage of the CFTA through providing them with simplified customs documents, a common list of goods that qualify for duty-free status, and assistance in completing customs procedures.
Fully estimate potential revenue gains and losses
Trade liberalisation will lead to lower tariff revenues. This will particularly affect African countries that are heavily reliant on trade tariffs on intra-African imports as a source of government revenue. Whilst the gains of trade liberalisation are expected to offset lost tariff revenue, experience from other developing countries shows that it is difficult to replace tariffs with revenue from domestic sources. For many of them, it has taken decades to recover revenue following trade liberalisation. Given governments have, by virtue of their human rights obligations, the duty to mobilise resources, the full breadth of implications of tariff reductions must be carefully considered, with utmost attention to social and public expenditure impacts.
Engage in paced, layered, targeted liberalisation and maintain policy space
Governments should embark on gradual liberalisation that allows protection, especially for vulnerable groups and in key areas such as food security. Temporary exclusion lists are one way of operationalising this, through allowing member states to select a specified number of tariff lines to be temporarily excluded from tariff liberalisation, enabling them to protect vulnerable groups such as women, food insecure populations, indigenous groups, or cross-border traders. Special safeguards are another tool. These would permit limiting imports in times of crisis or against sudden import surges.
States should, in addition, be cautious not to limit their policy space for the future by avoiding CFTA provisions that could undermine their ability to implement future measures to ensure that all human rights, including the right to development, are protected, respected, and fulfilled. In the agricultural sector for instance, governments would do well to maintain the policy space to enable them to take new measures if necessary, for instance to undertake new agricultural development measures in favour of small-scale agricultural production or to increase domestic food production capacity.
Ensure compensation and adjustment mechanisms
Negotiators and policy-makers should establish CFTA adjustment mechanisms to ensure that vulnerable groups, as well as people adversely affected by the structural and regulatory changes brought about by the CFTA, are able to benefit from the agreement over time. Negotiators could for instance establish a compensatory fund to provide short-term financial support and medium-term re-skilling and training to support the transition to new activities and sectors of employment. Regional aid for trade could contribute to the financing of such a fund. The text of the agreement should also acknowledge that social protection is an important tool to promote equal opportunity and to support the transition from informal to formal employment.
Monitor and evaluate CFTA impacts
The overall impact of the CFTA must be monitored over time, not only in terms of economic results, but also in terms of its impact on the enjoyment of human rights in Africa.
The CFTA will include its own mechanisms for monitoring and evaluating its implementation. This should incorporate the monitoring of the distributional and human rights impacts of CFTA. Ongoing monitoring and evaluation will be key to ensuring that the CFTA policies continue to respond to economic, social, and development needs as circumstances change, and adapt when they do not yield human rights-consistent impacts.
The human rights impact assessment of the CFTA was an “ex-ante” exercise, initiated during the preparatory period of the CFTA negotiation process. Its authors have been able to present their analysis and findings during the negotiations. It has demonstrated the value of a rights-based approach and the opportunity it provides for advancing the objectives of Africa’s Agenda 2063 and the global Sustainable Development Goals, whilst strengthening the accountability of economic actors. The recommendations emerging from this assessment can help inform the CFTA negotiations, as well as policy decisions in the subsequent implementation and monitoring phases, contributing to a robust, inclusive, and sustainable outcome from the CFTA. In addition, it is hoped that the assessment will trigger an earnest dialogue on the trade, social, and environmental impacts of the CFTA, and motivate civil society groups to engage actively during the remainder of the negotiation process as well as afterwards.
The views in this article are those of the author and do not necessarily represent those of others involved in the HRIA of CFTA.
Author: Caroline Dommen, Independent consultant
 United Nations Economic Commission for Africa (ECA) and Friedrich-Ebert-Stiftung (FES). The Continental Free Trade Area (CFTA) in Africa - A Human Rights Perspective. Addis Ababa and Geneva: ECA and FES, July 2017.
 World Bank. Human Rights and Economics: Tensions and Positive Relationships. Washington D.C.: World Bank, 2012.
 Stiglitz, Joseph. The Price of Inequality: How Today’s Divided Society Endangers our Future. New York: W.W. Norton & Company, Inc., 2012.
 African Union (AU). “Draft Strategic Framework for the Implementation of the Action Plan for Boosting Intra-Africa Trade and for Establishing the Continental Free Trade Area” (AU/TD/CFTA/AP/DSF). 2015.
 See for instance Nicolas Depetris Chauvin, M. Priscila Ramos & Guido Porto (2016) Trade, Growth, and Welfare Impacts of the CFTA in Africa.
 Higgins, Kate. “Gender and Free Trade Agreements: Best Practices and Policy Guidance.” Ottawa: The North-South Institute, 2013.