The free trade Area african upset by the Covid-19 - The Point

According to multiple media outlets including Reuters, the free trade agreement, continental will not be in effect on July 1, 2020 as expected due to the global

The free trade Area african upset by the Covid-19 - The Point

According to multiple media outlets including Reuters, the free trade agreement, continental will not be in effect on July 1, 2020 as expected due to the global pandemic of sars coronavirus. Note that this historic agreement signed on July 7, 2019 was due to start in July 2020, after its ratification by 54 of the 55 african countries. "The consideration of a report does not mean that there is more political will, and that there is more political commitment," said Wamkele Mene, the secretary-general of the institution in charge of the implementation of the Zleca, it is intended that the seat be installed in Accra, Ghana. Barrier : the complete closure of borders by some thirty countries prevents the secretariat of the free trade Area of continental african to advance the talks.

Read also 2020, the year of the free trade area african

negotiations behind

The consequence is that the negotiations are delayed two and a half months. The secretariat of the Zleca still has not moved to Accra and his boss is stuck in Addis Ababa with its cartons. Other sign which does not deceive, the report of the AU summit to be held in South Africa on may 30 for the purposes of encouraging trade negotiations on tariff reductions, rules of origin and other necessary regulations. "We need to adapt to conditions that no one would have been able to anticipate and we need to give priority to the governments to resolve the crisis of public health priority," explained Wamkele.

This comes at a time when Africa is lagging behind with regard to trade intracontinental. The latter represents only 15 % of the total, compared with 58% in Asia and 70 % in Europe. Even without the interference of a pandemic, the conclusion of an agreement seemed difficult – in spite of the progress made so far. In particular the issues of customs duty.

important points to finalize

The agreement requires the member States to remove tariffs for 90 % of the goods traded, which allows free access to the basic products, goods and services across the continent. The current text proposes that countries a period of five years to reduce to zero tariffs on 90 % of their goods. They then have seven years to lower the tariffs on 7 % of their tariff lines, while the remaining 3% can be protected. In reality, the negotiations have taken much more time.

Another sensitive point : the rules of origin. The countries have nearly completed the negotiations on rules of origin – products which may benefit from the block free trade must be manufactured in Africa – although they still have a long way to go before they agree on the intellectual property rights, trade in services and competition policy.

According to the international monetary Fund (IMF), the elimination of tariffs could boost trade in Africa, 15% to 25% in the medium term. Once operational, by 2030 according to the forecasts, the agreement is expected to create an economic bloc of $ 3.4 trillion, connecting 1.3 billion people across Africa, which would make it the largest trading bloc since the creation of the world trade Organization in 1994.

Read also The free trade area of continental soon effective

Making the pandemic an opportunity

" In fact, this crisis has demonstrated the need for us to reconfigure our supply chains, reconfigure our trade relationships and establish regional value chains in Africa that will advance our own capacity of african industrial development without logging off completely from the rest of the world ", said Leads so that the fears of international organizations such as FAO or the united nations are sounding the alarm on the stoppage of food supply chains. "The dependence on global supply chains presents a challenge. When you have a disruption, you become very, very exposed. ""Although the delay in implementation means that these benefits will not be in the short or medium term, we believe that this gives the country enough time to accelerate investment in essential infrastructure which will reduce the cost of production of goods locally and enhance the competitiveness of local manufacturers ," responded the broker nigeria CSL stockbrokers.

" In our opinion, the african countries with the infrastructure required for manufacturing activities on a large scale will be better placed to attract foreign capital from multinational companies seeking to establish manufacturing facilities in Africa to take advantage of economies of scale as well as benefits associated with the absence of regional taxes made possible by the Zleca ", analysis this agency recognized by the Nigeria Stock exchange. Wamkele Mene can see in this behind the opportunity to strengthen the economic recovery plans of african States. Because according to the latest issue of the ADB, the Covid-19 is expected to cost 2.8% of GDP in Africa. "The shock of the Covid-19 would further reduce the budget flexibility of the continent, given that the budget deficits are expected to widen from 3.5 to 4.9 percentage points and increase the funding deficit in Africa, from 110 to 154 billion by the year 2020 ", said the president, Akinwumi Adesina.

" This is our stimulus plan. It is as well that we're going to go back to Africa ", stressed the secretary general, who is shortly to make a point during a debate in video conferencing. For this young South African of 43 years, experience in commercial negotiations within large international agencies, this global pandemic has also highlighted the weaknesses of Africa on the map of intellectual property, particularly on the industry of medicines. In the near future, this expert is hoping to make the free trade agreements as a springboard for the industrial development of this key sector.

Read also Area of a continental free trade : what it will bring, the challenges it faces

writing will advise you

The free trade area of continental soon effective 2020, the year of the free trade area african
Updated Date: 21 May 2020, 17:34

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