African Trade Agreements

And it couldn`t have come at a better time. As a collective, the continent is embarking on a new economic path. In 2018, African heads of state signed an agreement that would revive the African Continental Free Trade Area (AfCFTA), a revolutionary change in Africa`s regional and international trade. When it gradually comes into force in the coming months and years, AfCFTA will cover a market of more than 1.2 billion people and up to $3 trillion in GDP, with the potential to increase intra-African trade by more than 50%, according to the UN Economic Commission for Africa. According to the World Bank, the agreement could add $76 billion in revenue to the rest of the world. Once completed, AfCFTA will become the largest free trade area in the world since the creation of the World Trade Organization. After the Kigali summit, more signatures were added for the AfCFTA. At the African Union summit in Nouakchott on 1 July 2018, five other nations, including South Africa, joined the agreement. Kenya and Ghana were the first nations to ratify the agreement and file their ratifications on 10 May 2018. [2] Of the signatories, 22 had to ratify the agreement in order for it to enter into force, and it happened on 29 April 2019, when Sierra Leone and the Arab Democratic Republic of the Sahara ratified the agreement. [7] As a result, the agreement came into force 30 days later on 30 May 2019; At that time, only Benin, Nigeria and Eritrea had not signed. Outstanding issues, such as trade agreements and rules of origin, are still being negotiated.

[when?] When President Bill Clinton signed the African Growth and Opportunity Act (AGOA) in 2000, African countries gained a competitive advantage by providing unilateral duty-free exports for 6,500 African products to the United States. Twenty years after AGOA`s first adoption, we see that it has created long-term sustainable growth by stimulating the private sector and creating jobs in a region where many countries face high unemployment, the challenges of the region. In addition, Clinton has strengthened the regional approach to the trade agreement for both major players such as South Africa and by smaller players such as Lesotho. In many ways, this approach is in line with “trade instead of aid.” Intra-African trade is currently only 16%, compared to 19% in Latin America, 51% in Asia, 54% in North America and 70% in Europe. The Continental Free Trade Area (AfCFTA) [9] is a free trade area with 28 countries from 2018. [1] [10] [11] [12] It was created by the African Free Trade Agreement between 54 of the 55 african union nations. [13] The free trade area is the largest in the world, in terms of the number of participating countries since the creation of the World Trade Organization. [14] Accra, Ghana, is the secretariat of AFCFTA and was commissioned by Ghanaian President Nana Addo Dankwa Akuffo Addo on 18 August 2020 in Accra and handed over to the AU. Companies frustrated by trade barriers could use a “non-tariff barrier mechanism” in the agreement to signal commitments on trade problems and ask for solutions, Muchanga says. The free trade area can only enter into force if all protocols from at least 22 countries are finalized and ratified.