Designing Trade Liberalization in Africa

Modalities for Tariff Negotiations Towards an African Continental Free Trade Area

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The negotiations for an African Continental Free Trade Area (AfCFTA) were unprecedented in the history of regional trade agreements. The AfCFTA would ultimately comprise 55 members, 33 of which are least developed countries (LDCs), and encompass six preexisting regional economic communities (RECs), at different stages of integration with cascading and overlapping membership. In such a sui generis context, structuring negotiations was in itself a daunting challenge but identifying operational modalities for tariff negotiations that would serve for boosting intra-African trade was another. Despite the historic signing in March 2018 of the Agreement Establishing the African Continental Free Trade Area, the Agreement is without effect until such a time that operational modalities for AfCFTA tariff negotiations are firmly established, and market access negotiations completed, so that individual AfCFTA parties define their schedules of tariff concessions as an integral part of the Agreement. This study provides an analysis of ways in which AfCFTA liberalization could effectively be organized while seeking to meet the overarching policy objective of boosting intra-Africa trade. It discusses how the existing modalities – a blueprint of trade liberalization in Africa – may be assessed in establishing an operational and effective AfCFTA and draws policy implications for the post-modalities phases of tariff negotiations and implementation of liberalization commitments.



Tariff elimination modalities

RTAs are about tariff elimination. Thus, it would appear straightforward to establish tariff eliminating modalities for an RTA, which essentially consist of 100 per cent cuts (i.e., elimination) of existing tariffs for covered products however high or low they may be, with the coverage being the level of ambition, hence less complex than WTO agriculture or non-agricultural market access (NAMA) negotiations. This explains why under RTA negotiations, product coverage and transition periods are the two central parameters of negotiations, as the depth and “formulae” of tariff cut are mostly irrelevant (i.e., being 100 per cent linear cut) contrary to WTO market access negotiations where focus is precisely on these elements, i.e., level of ambition and its effect across products and countries (Table 14). Under RTAs, any adjustment is to be essentially addressed by the degree of coverage and the length of transition period.


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