The Sunday News
Judith Phiri, Business Reporter
TALKS aimed at finalising key aspects of the new African Continental Free Trade Area (AfCFTA) are facing delays, as member countries work to reach an overarching agreement on rules of origin and tariff reduction schedules.
When countries officially started trading under the AfCFTA in January this year, officials said that Phase one negotiations covering trade in goods and services would be fully wrapped up by July. In an online presentation on linkages between the AfCFTA and the Regional Economic Communities (RECs), Trade Law Centre (tralac) executive director Ms Trudi Hartzenberg said for Phase 1 negotiations some of the rules of origin were still being negotiated.
“Some of the rules of origin still being negotiated include fish (Chapter three — progress made are ‘wholly obtained’ rule, definitions of ‘vessels’ and ‘factory ships’), articles of leather (Chapter 42), knitted/crocheted fabrics (Chapter 62).
The others include knitted/crocheted apparel and clothing accessories (Chapter 61), and not knitted/ crocheted apparel and clothing accessories (Chapter 62); and some motor vehicle, agric and clothing products,” said Ms Hartzenberg.
Rules of origin are crucial, and will have a material impact on how African companies trade with counterparts across the continent. There are thousands of tariff lines, and these rules will specify for each whether a product can be categorised as “Africa made” and eligible for tariff concessions.
She said that modalities for tariff negotiations were at 90 percent of tariff lines liberalised over five years (LDCs have 10 years), seven percent additional tariff lines (sensitive products) liberalised over 10 years (LDCs have 13), while three percent tariff lines may be excluded.
In terms of tariff phase down, Ms Hartzenberg said they will be in equal instalments, for example 20 percent reduction per annum on 90 percent of tariff lines, over five years. She said: “For the criteria for products designated sensitive or excluded these include food security, national security, fiscal revenue, livelihood and industrialisation, a decision made in 2019.”
Ms Hartzenberg said for negotiations Phase 2 State parties had agreed to cooperate in areas such as Protocols on Sustainable Investment, Competition Policy and Intellectual Property Rights. In terms of Intellectual Property Rights, she said regional cooperation initiative would be through African Regional Intellectual Property Organisation (ARIPO), while Burundi, South Sudan and South Africa do not participate.
For Phase three negotiations on Digital trade/ E-commerce, Ms Hartzenberg said the AfCFTA agreement provides the additional legal instruments that may be concluded on women, youth and SMEs.
“On the relationship between the AfCFTA Free Trade Areas (FTAs) and the RECs, article 19 of the AfCFTA agreement states that in the event of any conflict and inconsistency between this Agreement and any regional agreement, this Agreement shall prevail to the extent of the specific inconsistency, except as otherwise provided . . .”
Ms Hartzenberg said notwithstanding the provisions of Paragraph 1 of the article, State parties that are members of other regional economic communities, regional trading arrangements and custom unions, which have attained among themselves higher levels of regional integration than under this Agreement, shall maintain such higher levels among themselves.
She gave the presentation to businesses that attended a AfCFTA training workshop conducted by the Zimbabwe National Chamber of Commerce (ZNCC) in conjunction with the United Nations Development Programme (UNDP).
