Updated February 2024Where does the AfCFTA fit inAfrica’s developmentagenda? TheAgreementestablishingtheAfricanContinentalFreeTradeArea(AfCFTA)was signedatthe10thExtraordinarySummitoftheAUAssemblyon21March2018in Kigali,Rwanda.TheAfCFTAAgreemententeredintoforceon30May2019.The AfCFTAisthecontinent’smostambitiousintegrationinitiative. ThemainobjectivesoftheAfCFTAare: • create a single continental market for goods and services, with free movement of businesspersons andinvestments • expand intra-Africa trade across the regional economic communities and the continent ingeneral • enhance competitiveness and support economictransformation • promote industrialdevelopment Agenda2063isAfrica’sframeworkforstructuraltransformation.Itbuildsonandaims tofacilitatetheimplementationofexistingcontinentalinitiatives(AIDA,PIDA,BIAT andCAADP).TheAfCFTA,asingleAfricanairtransportmarket(SAATM),andthefree movementofpeopleareAgenda2063flagshipprojects.TheAUhasadoptedlegal instrumentsfortheeffectiveimplementationoftheseflagshipprojects.Importantly, theUNAgenda2030’s17SustainableDevelopmentGoals(SDGs)areincorporatedin the20goalsofAgenda2063.ByimplementingAgenda2063,Africawillalsomeetits globalcommitmentsundertheSDGs. 1Agenda 2063 PIDA AIDA BIAT CAADP SAATM Decision AfCFTA Agreement Source: https://au.int/en/agenda2063/continental-frameworksand https://au.int/agenda2063/flagship-projects 2Architecture of theAfCFTA TheAfCFTAAgreementisacomprehensivelegalcompactwhichincludesthe AgreementestablishingtheAfCFTA,ProtocolsonTradeinGoods,TradeinServices, DisputeSettlement,Investment,IntellectualPropertyRightsandCompetitionPolicy. Recently,DigitalTradeandWomenandYouthhavebeenaddedtothenegotiating agenda. Phase1negotiationscoverTradeinGoods,TradeinServicesandDisputeSettlement. TheProtocolsonTradeinGoodsandTradeinServiceseachhaveseveralAnnexes coveringsubstantivedisciplines. Negotiationsonanumberofissues(e.g.,tariffconcessions,rulesoforiginforgoods andschedulesofspecificcommitmentsforservices)arestillongoing.Thenegotia- tionsontheProtocolonDisputeSettlementhavebeenconcluded. Phase2negotiationscoverInvestment,CompetitionPolicyandIntellectualProperty Rights.TheseProtocolswillhaveAnnexes,whicharestilltobenegotiated. Phase3negotiationscoverDigitalTrade,andWomenandYouthintrade. 3Agreement establishing theAfCFTA Protocol on Rules and Procedureson the Settlement of Disputes Protocolon Trade in Services Protocolon Trade in Goods Protocolon IPRs Protocol on Competition Policy Annexes • Schedules of SpecificCommitments • MFNExemption(s) • Air TransportServices • List of prioritysectors • Framework document on Regulatory Cooperation Annexes • Schedules of Tariff Concessions • Rules of Origin • Customs Cooperation and Mutual Administrative Assistance • Trade Facilitation • Non-TariffBarriers • Technical Barriers toTrade • Sanitary and PhytosanitaryMeasures • Transit • Trade Remedies: Guidelines on implementationof TradeRemedies PhaseTwo Annexes • WorkingProcedures ofthePanel • ExpertReview • Code of Conduct for Arbitrators and Panellists Protocolon Womenand Youthin Trade Protocol onDigital Trade Phase Three Protocolon Investment 4Trade in Goods: Tariff Negotiations TheProtocolonTradeinGoodsnominallyenteredintoforcewiththeAfCFTAAgree- mentin2019,althoughnegotiationsonsomerulesoforiginandschedulesoftariff concessionsarestillongoing.TheAfCFTAwillseetheprogressiveliberalisationof97%of intra-Africatariffs,7%ofwhicharecategorisedassensitiveproductsandwillbe liberalisedoveralongertimeframe.Theremaining3%oftariffsmaybeexcludedfrom liberalisationforreasonsrelatingtofoodsecurity,nationalsecurity,fiscalrevenue, livelihood,andindustrialisation. Forty-sixStatePartieshave(asatFebruary2024)submittedoffersoftariffconcessions thathavebeenverifiedbytheAfCFTASecretariattobecompliantwiththenegotiating modalities.TheseProvisionalSchedulesofTariff Concessionsareavailableinthee-TariffBook (https://etariff.au-afcfta.org/mapsearch)andare applicabletotradeundertheGuidedTradeInitiative. Tariff Elimination Modalities General Sensitive products Excluded products Coverage (%)Transition Period Tariff linesImport Valuenon-LDCsLDCs 90 90 5 years 10 years 7 10 years13 years 3 10 No liberalization No liberalization 5Rules of Origin RulesofOrigin(RoO)determinetheeconomicnationalityofaproductandhenceits eligibilityforpreferentialtarifftreatmentinafreetradearea.TheAfCFTARoOinclude the‘whollyobtained’ruleforagriculturalandotherprimaryproducts,andproduct- specificruleshavebeenagreedontoencouragelocalvalueadditionandtransformation ofinputs. RulesofOriginforsomeclothingandtextileandautomotivetarifflineshavenotyet beenagreed.Forsomeclothingtarifflines,adouble-transformationrulehasbeen agreedfor5years(whenareviewwilltakeplace).SomeStateParties,including BotswanaandMauritius,hastabledrequestsforanexceptiontothisrule. TheWorldCustomsOrganisationhaspreparedaguidetotheAfCFTARulesofOrigin: https://www.wcoomd.org/en/topics/origin/instrument-and-tools/afcfta-rules-of-origin.aspx 67 TheProtocolsonInvestment,IntellectualPropertyRights(IPRs),and CompetitionPolicyhavebeencompletedandadopted.Furthernegotiations arerequiredforfinalisingtheAnnexestotheInvestmentandIPRProtocols. DisputeresolutionundertheInvestmentProtocol TheProtocolonInvestmentprovidesforadisputeresolutionmechanism thatinvestorswillhaveaccessto.Article47oftheProtocolprovidesthatin theeventthataninvestorofaStatePartyandtheHostStateareunable resolveadisputeamicably,theymaymakeuseofthedisputeresolution mechanismprovidedintheAnnex(whichisyettobenegotiated).Whilethe InvestmentProtocolonlyappliestointra-Africainvestment,U.S.firmsthat alreadyhaveanestablishedcommercialpresenceinaStatePartywillbeable tomakeuseoftheProtocol’sdisputesettlementmechanism. ThePhaseIIIProtocolsonDigitalTradeandWomenandYouthinTradearein progressandnegotiationsareexpectedtobeconcludedin2023,andtobe adoptedbytheAUAssemblyinearly2024.TheProtocolonDigitalTrade (whichcoverse-commerce)aimstosupporttheProtocolsonTradeinGoods andTradeinServicesbypromotingthesustainableandinclusive transformationofdigitaltradeonthecontinent.TheProtocolonWomenand Youthisgearedtowardstowardseliminatinggender-specificbarrierstotrade andunlockingthepotentialofthecontinent’syoungpopulation. Phase II and Phase III NegotiationsTheAfCFTAhasaProtocolonRulesandProceduresontheSettlementofDisputes whichwasadoptedduringPhaseIoftheAfCFTAnegotiationsandhasbeeninforce since30May2019.TheAfCFTA’sdisputesettlementsystemismodelledonthe DisputeSettlementMechanismoftheWTO.Itconsistsofpanelsandanappellate body.OnlyAfCFTAStatePartieshavestandingtofileclaimsunderthisProtocol, whichcanbeheardanddecidedbyPanelsandtheAppellateBodyoftheAfCFTA. Sinceviolationsofobligationsregardingtradeingoodsandinservicesinmost instancesimpactprivatefirms,itisforthenationalgovernmentsoftherelevant countries(iftheyaremembersoftheWTOortheAfCFTA)tolitigateagainstStates adoptingandimplementingmeasuresinviolationoftheirobligations. Legalremediesforprivateparties WhilecompaniesdonothavedirectaccesstotheAfCFTA’sState-Statedisputesettle- mentmechanism,theycanlobbythehostgovernmenttotakeupadisputeontheir behalforapproachthedomesticcourtstoaddressacomplaint. Theycanalsobenefitfromtheapplicationoftraderemedies.Privatepartieswhohave beenaffectedbyunfairtradepractices,suchasthedumpingofgoodsorsubsidized imports,canrequestnationalinvestigatingauthoritiestoundertaketherequired investigationsandimposeanti-dumpingduties,countervailingmeasures,orsafeguard measures.Annex9oftheProtocolonTradeinGoodsprovidesforTradeRemediesand Safeguards. Dispute Settlement 8Next >