African Continental Free Trade Area: A bold commitment
Moves towards greater economic integration across Africa are gaining momentum with the recent entry into force of the African Continental Free Trade Area (AfCFTA) for the 24 countries that have deposited instruments of ratification.
Covering the 55 members of the African Union, the AfCFTA will be the world's largest free trade area since the establishment of the World Trade Organisation. It will cover a market of over 1.2 billion people and a combined gross domestic product (GDP) of more than US$3.4 trillion. The Economic Commission for Africa (UNECA) estimates that the AfCFTA could boost intra- African trade by over 50 per cent by eliminating import duties, and by double this amount if nontariff barriers are also lowered.
The AfCFTA aims to do this by establishing a single continental market for goods and services, with free movement of business persons and investments. Intra-African trade is expected to rise through better harmonisation of regulatory frameworks and trade policies. Realising this will be a long-term process. However, there are clear potential benefits for Australian businesses operating in Africa from greater ease of doing business and lower costs to operating across borders.
Some continuing negotiations are progressing well, such as the protocols on trade in goods and services. However, negotiations on tariff schedules, rules of origin and specific services sector commitments are not so straightforward. The number of negotiating partners, the diversity of economic activities, and varying levels of technical expertise and political interest, also add to the complexity of negotiations.
Recognising the potential for a high quality agreement to benefit Australian business, the Australian Government is working to provide training opportunities for AfCFTA negotiators.