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African Comprehensive Free Trade Agreement

To achieve concrete results, it will also be necessary to enable the private sector to truly seize new opportunities in the market. This means market information and often strives to improve the competitiveness of the industry. To attract investment, whether local, regional or from third countries, African countries must continue to improve framework conditions and facilitate trade. The G20 Compact with Africa (CwA) and the European External Investment Plan (within the framework of the Africa-Europe Alliance) are framework conditions to be used for these support efforts. The overall objectives of the agreement are:[20] Finally, African countries will need their energy and capacity to negotiate the conclusion of the AfCFTA. Given the current weakness of the multilateral system, they also have an interest in concluding free trade agreements with other partners, particularly in Asia, but also in Latin America and the United States. Of course, Africa`s bargaining power would be greater if African countries could already act together as a pan-African customs union. But the first step is the completion of the AfCFTA. The agreement is seen as crucial for growth and job creation for Africa and its 1.27 billion people. Reaching Nigeria`s agreement and entering the operational phase in July was an important step: the continuation of the ongoing negotiation process is not yet entirely clear. While the goal of creating a single African Free Trade Area under the aegis of the African Union could give the impression that the result will be a single instrument of African liberalization, under which each country will make its offer of liberalization to all other members of the African Union before a single agreement is negotiated on that basis. This would be in line with the WTO approach. But it already appears that the process will not develop in this way.

By negotiating and ratifying the AfCFTA agreement, the AU Commission has given new impetus to the regional integration process. However, the step between the discussions – and even the results of the negotiations – towards concrete economic effects is important. Criticism of the African Union`s pressure for quick results has also been heard by government circles, for example in southern Africa. They also highlight a difficulty: although a timetable has been agreed, implementation is still likely to be ongoing. It is therefore likely that integration in regions that are already committed to a more open trade policy will progress (further). In this sense, talks in Southern Africa between the South African Customs Union (SACU) and the EAC are expected to go well, while the process of opening up between countries with a more protectionist approach, such as Nigeria or Zimbabwe, continues to begin. Paul Brenton is a Chief Economist of the World Bank`s Trade and Regional Integration Unit (ETIRI). It focuses on analytical and operational work on trade and regional integration. African States and regions have already concluded various agreements with partners outside Africa.

The main ones are the Economic Partnership Agreements (EPAs) with the European Union; There are also free trade agreements and preferential agreements (the latter covers only a selection of sectors) with other countries and regions such as the European Free Trade Association (EFTA) or Mercosur. Other free trade agreements are being negotiated, for example with Great Britain, between SACU and India and soon with the United States. “We now have heads of state and government from 54 countries who have their necks on this agreement. He is a game changer. There is now much more political energy than ever for integration,” said Arancha Gonzalez Laya, Executive Director of the International Trade Centre (ITC). . . .