The agreement on the African Continental Free Trade Area (AfCFTA) reached a significant milestone as its Council of Ministers, meeting on 28 and 29 January 2022, agreed on a criterion for determining the origin of 88% of all products listed in tariffs across the continent. Known as rules of origin, this criterion establishes the value added to raw materials and semi-finished products that qualifies them as locally produced.
This agreement, pending approval by the Heads of State at the upcoming Assembly of the African Union (AU) in Addis Ababa, Ethiopia, will lay the groundwork for launching meaningful trade under the AfCFTA.
Meeting Insights
After the eighth meeting of the AfCFTA Council of Ministers in Accra, Council Chairman Ebrahim Partel stated, "This is a major breakthrough for the AfCFTA, and it now allows us to say with confidence that we have a package of products that we can start negotiating on."
In July 2019, during a meeting of heads of state that finalized the key treaty provisions for the AfCFTA's entry into force, one significant issue raised was the establishment of a Council of Ministers tasked with overseeing trade matters across the continent.
According to Mr. Partel, the Council has since convened regularly, ultimately leading to the agreement.
"Our eighth meeting was very successful and historic. During the two-day meeting, we took ground-breaking decisions that will now be forwarded to the Heads of State at the AU Assembly.
"The most important thing is that we have key rules of origin in place that allow us to say now with confidence that we have a set of products that we can start negotiating on," he said.
Partel elaborated, " In other words, we have now defined for each product the minimum African content needed for trade between countries on the basis of preferences. This is a major step forward, and I am pleased to say that this two-year period of work has identified over 850 additional products for which rules of origin have been agreed."
Other Agreements
Partel also indicated that the Council had reached agreements on other aspects, including a tendering process for completing negotiations on trade and services under the AfCFTA agreement. "We want to accelerate these services negotiations to create large African markets in these areas," he emphasized.
"We cannot continue to produce raw materials for other continents. Our time for industrialisation is now, and this package will move this initiative forward," he declared.
Mr.Partel also indicated that the meeting had also adopted modalities for reporting on dispute resolution processes, such as “the day-to-day challenges that arise in trade relations between countries and companies”.
Progress in Trade Services
Wamkele Mene, Secretary General of the AfCFTA Secretariat, noted that negotiations on trade in services were nearing completion, with 46 Member States having submitted their schedules of specific commitments.
The Council has directed that these negotiations be concluded by 30 June 2022.
Furthermore, he announced that AfreximBank had pledged to support specific sectors of the African economy with financing, notably the automotive industry.
BY: Emmanuel Bruce / Graphic Online