April 8, 2021 by Uncategorized 0

Challenges Of African Continental Free Trade Agreement

Challenges Of African Continental Free Trade Agreement

While AfCFTA is signaling a revival towards a more integrated Africa to facilitate movement and trade, it will undoubtedly contribute to the strengthening of African unity and promote “African solutions to African problems.” However, many analysts say the AfCFTA calls for cautious celebration and optimism. Currently, intra-African trade accounts for only 15% of Africa`s foreign trade. With the abolition of tariffs, intra-regional trade is expected to increase by about 15-20% over the medium term.24 This is ideally feasible, as countries are expected to remove tariffs on 90% of products under the AfCFTA, leaving open the possibility of applying the reduction to either customs positions or import values. However, targeted pricing could only result in tariff reductions of up to 15% for import values.25 Yulia Vnukova advises the World Bank on the Department of Trade and Regional Integration (ETIRI). Based on more than a decade of experience, Yulia`s current work focuses on trade policy and regional integration, focusing on macroeconomic and microeconomic analyses of trade, trade and sectoral competitiveness, global value chains and private sector development in emerging countries in Europe, Asia and Africa. The development of simple and transparent rules of origin has proved elusive for the European Union and the United States. According to political circles, African trade negotiators have already identified 800 products for specific rules of origin. In addition, increased efforts are being made to ensure compliance with the movement of capital, services and goods, as does the East African Community (EAC) Common Scoreboard, which could be replicated at the continental level. Despite differences between labour mobility rules and implementation, migration is also increasing for countries that have implemented regional initiatives on the free movement of people. On the other hand, the range of results of African UCs indicates that regional integration is a complex process, where several factors are at stake beyond tariffs.

Some concerns, such as access to strong infrastructure (electricity, road, rail, viable domestic private sector and local industries), would require a longer-term commitment to create an environment conducive to robust continental trade. Infrastructure bottlenecks have severely hampered progress in intra-African trade.

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