The African Continental Free Trade Area Agreement (AfCFTA)

Background: On 21 March 2018 during an extraordinary summit held in Kigali, 44 member states of the African Union (AU) signed the Agreement Establishing the African Continental Free Trade

582 H. Jason, “Trading with the enemy”, Foreign Policy in Focus, 16 February 2011, online at:

<http://fpif.org/trading_with_the_enemy/>, (accessed on 20 December 2016).

583 Musibau Babatunde, “Conforming to Sanitary and Phytosanitary Measures by African Smallholder Farmers:

Challenges and Constraints” (2018) demonstrates how SPS in AGOA is affecting trade in different African countries.

<file:///C:/Users/uchel/Downloads/CONFORMINGTOSANITARYANDPHYTOSANITARYMEASURESBYAFRI CANSMALLHOLDERFARMERSCHALLENGESANDCONSTRAINTS.pdf>. (Accessed 18/8/2019).

584 Thompson, supra note 583, at 467.

585 UNCTAD, World Investment Report 2015 (2015) 32-36.

Area (AfCFTA).⁵⁸⁶ In July, 2018, during the 31^st African Union summit held in Nouakchott, 5 additional member states of the African Union signed the Kigali Declaration, by which they committed to sign the Agreement of the African Continental Free Trade Area once they had undertaken necessary national consultations.⁵⁸⁷

A free trade area is a form of economic integration whereby countries reduce or abolish all trade impediments among themselves, but retain their individual policies and trade barriers with the outside world. All the tariffs and quantitative restrictions on substantially all trade are eliminated. Establishing a free trade area in Africa is about liberalising intra-regional trade among countries in the continent. ⁵⁸⁸ The creation of a free trade zone means that each member country has the power to determine or fix its own tariff rates on imports from non-member countries. It also means that the rules of origin are designed in such a manner that preferential treatment is confined to goods or services emanating from within the free trade area. By so doing, member states are able to derive benefits from the preferential trading arrangements.⁵⁸⁹

The emerging African free trade area is part of the AU’s regional integration strategy to overcome the constraint of small and fractioned markets and economies in Africa. The establishment of free trade areas is consistent with the international trading system of the WTO, as provided in Article XXIV of the General Agreement on Tariffs and Trade (GATT) of 1947, the Enabling Clause and Articles V and V(bis) of the General Agreement on Trade in Services (GATS). The AfCFTA is a mega-regional agreement which will encompass the 55 member

586 African Union (AU), Agreement Establishing the African Continental Free Trade Agreement (AfCFTA), Kigali draft text, March 2018, TI21086_E. [AfCFTA].

587 The additional signatories were South Africa, Namibia, Burundi, Lesotho and Sierra Leone.

588 United Nations Economic Commission for Africa (UN-ECA), African Continental Free Trade Area: Towards the Finalization of Modalities on Goods-Toolkit (Addis Ababa: UN-ECA, 2018) at 1.

589 Yeukai Mupangavanhu, “The protection of intellectual property rights within the continental free trade area in Africa: Is a balance between innovation and trade possible?” (2018) 15:4 International Journal of Business, Economics and Law, 14 at 15 [Mupangavanhu, The protection of IPRs in the CFTA].

countries of the AU and eight recognized Regional Economic Communities (RECs).⁵⁹⁰ This will be one of the world’s largest free-trade areas in terms of the number of countries, covering more than 1.2 billion people and over $4 trillion in combined consumer and business spending if all 55 countries join. Phase II of the AfCFTA negotiations will focus on investment, IP rights and competition policy with the draft legal texts being due for submission to the Assembly by January 2020.⁵⁹¹

In the preamble of AfCFTA, member countries of the African Union state their determination to build upon their rights and obligations “under the Constitutive Act of the African Union of 2000, the Treaty Establishing the African Economic Community of 1991 and, where applicable, the Marrakesh Agreement Establishing the World Trade Organisation of 1994.” They also acknowledge several regional economic communities (RECs), including ECOWAS, as the building blocs upon which AfCFTA will be established. This hints at a desire to conform with existing multilateral and regional trade agreements relevant to Africa.

Content and Implications for Food Security: Pursuant to Article 3, the general objectives of AfCFTA include the creation of a single more liberalized market for trade of goods in Africa and facilitating the establishment of a continental customs union.⁵⁹² Other AfCFTA objectives that are relevant to food security are to: promote and attain sustainable and inclusive social and economic development and structural transformation of the State Parties;⁵⁹³ enhance the competitiveness of

590 Specifically, the Common Market for Eastern and Southern Africa (COMESA); the Community of Sahel-Saharan States (CEN-SAD); the East African Community (EAC); the Economic Community of Central African States (ECCAS); the Economic Community of West African States (ECOWAS); the Inter-governmental Authority on Development (IGAD)2; the South African Development Community (SADC); and the Arab Maghreb Union (AMU).

591 African Union Decision, Assembly of the Union Tenth Extraordinary Session 21 March 2018 Kigali, Rwanda.

(2018) Ext/Assembly/AU/Dec.1(X).

592 AfCFTA, Article 3 (a), (b), and (c).

593 AfCFTA, Article 3(d).

the economies of State Parties within the continent and at the global market;⁵⁹⁴ promote industrial development through diversification and regional value chain development, agricultural development and food security;⁵⁹⁵ and to resolve the challenges of multiple and overlapping memberships and expedite the regional and continental integration processes.⁵⁹⁶ The agreement seeks to realize the general objectives of Article 3 by placing obligations on countries, categorized as specific objectives, to eliminate tariffs and non-tariff barriers to trade in goods, liberalize trade in services and cooperate on IPRs and competition policies (Article 4). It also adopts principles similar to those in multilateral treaties (Article 5).

The suitability of the transparency requirement in Article 17.2, which states that AfCFTA provisions “shall not require any State Party to disclose confidential information which… will prejudice the legitimate commercial interest of particular enterprises, public or private” is questionable, as the provision might limit the ability of African countries to disclose IP protected information necessary for the grant of compulsory licenses for public interest purposes. The holder of a PBR may protest against the distribution of cheaper generic versions of seeds to farmers as going against their legitimate commercial interest of maximizing profits.

In the event of any inconsistency between any regional agreement and the AfCFTA, the provisions of the latter shall prevail.⁵⁹⁷ However, the AfCFTA Agreement shall not nullify, modify or revoke rights and obligations under preexisting trade agreements that State Parties have with third parties.⁵⁹⁸ Similarly, Article 22 (Exceptions) of the AfCFTA restricts the use of exceptions, by stating that “No provision in this Agreement shall be interpreted as derogating from the

594 AfCFTA, Article 3(e).

595 AfCFTA, Article 3(f).

596 AfCFTA, Article 3(g).

597 AfCFTA, Article 20.

598 AfCFTA, Article 19.3.