Fifty-four of the 55 African countries have signed the agreement, with 41 countries having ratified the agreement.

Nonprofit company Trade Law Centre executive director Trudi Hartzenberg notes that progress has been made on negotiations for the Rules of Origin (RoO) as agreement on 87.7% of tariff lines has been achieved.

This could open the door for “commercially meaningful trade” to begin, in terms of a decision by the African Union (AU) Summit last month. However, full details of the summit decisions are not yet available to the public domain.

She explains that, while the Heads of State at the AU’s thirteenth Extraordinary Summit on December 5, 2020, decided to start trade on January 1, 2021, “this did not happen”.

Hartzenberg tells Engineering News & Mining Weekly that, by January 1, 2021, RoO for 90% of tariff lines had not been agreed to, and as a result, member States were reluctant to make tariff offers for tariff lines without agreed RoO. Consequently “there hasn’t been any trade under the AfCFTA, but intra-Africa trade continues under existing tariff regimes”.

However, during their January meeting, AfCFTA’s Council of Ministers agreed that trade should begin on the basis of the 87.7% agreed tariff lines. The expectation is that last month’s summit confirmed this decision.

Law firm Webber Wentzel alliances and network head Yael Shafrir explains that, once countries start to trade, their commitments will apply retrospectively from January 1, 2021. “For example, if the countries agree to progressively reduce tariffs over five years, they must assume that period began in January 2021.”

At the time of writing, RoO for products in the automotive, textiles, sugar and tobacco sectors had yet to be finalised.

Hartzenberg adds that RoO for textiles is expected to be completed only by September. This follows an earlier June 2021 deadline for the finalisation of Phase 1 negotiations.

The Phase 1 negotiations cover trade in goods and services as well as dispute settlement; Phase 2 tackles intellectual property rights, investment, and competition policy, and Phase 3 will discuss e-commerce.

Courtesy of Engineering News – full article here