Africas continental free trade area agreement, one of the most ambitious regional integration efforts of the 21st century, is requiring policymakers to align a wide range of complex and divergent trade strategies across the continent. Concept document on formation of a pan african free trade zone association introduction the globalization of trade and foreign investment over the past decade, as expressed in the world trade organization wto, have significantly exposed african economies to competitive pressures of the global economy. Implications of the african continental free trade area agreement has been prepared at a time when concerted efforts are being made across the continent by both sovereign and corporate. Bbc news business african free trade zone is agreed. Djibouti, a tiny state in east africa, opened a chinesebuilt international free trade zone on thursday.
In addition, djibouti will create a unified customs system with china, establish a transit trade center and set up a currency clearing system. The african leaders of economic zones and free zones engaged their collective knowledge, through africa economic zones organisation aezo, providing strategic and technical assistance, identifying business. The african union has launched the operational phase of the africa continental free trade area afcfta, which will be the worlds largest free trade area. Mar 04, 2019 the africa continental free trade area afcfta signed in march 2018 aims to establish a single market across the continent.
In 2012, the african heads of state and governments resolved to establish afcfta treaty to create a single continental market for goods and services. The african continental free trade agreement afcfta aims to unite 1. The au says that the african continental free trade area called afcfta will create the worlds largest free trade area. What is the african continental free trade area afcfta. Fiftyfour african nations met on sunday to work out an agreement on the pancontinental free trade zone.
One of these is ecowas, the economic community of west african states, a coalition of 15 countries in west africa that have already established a freetrade zone. Au assembly of heads of state and government decreed, in 2012, the decision to boost intraafrican trade and fasttrack the continental free trade area cfta. As of last week, there is a new global trade player, the african continental free trade area afcfta. But there are still hurdles to be overcome, says dws ludger schadomsky. List of books and articles about free trade online research. The 2018 edition of the african exportimport banks annual flagship report the african trade report titled boosting intraafrican trade. The summit also endorsed the action plan on boosting intraafrica trade biat which identifies seven. African continental free trade area agreement insight.
Jul 07, 2019 the au says that the african continental free trade area called afcfta will create the worlds largest free trade area. Namibia, rwanda, seychelles, swaziland, south africa, tanzania, united republic of, uganda, zambia, zimbabwe, area of cooperation. Africa economic zones organisation have multiplied around the world since the 1980s, mainly in response to the wave and changes in global trade and industrial value chain. The african free trade zone announced at the eacsadccomesa summit also known the aftz summit and tripartite summit effectively is the realization of a dream more than a hundred years in the making, a trade zone spanning the length of african continent from cape to cairo, from north african egypt all the way to the southernmost tip of africa. The advantages and disadvantages of free trade show us that any nation deciding to enter into an agreement must take proactive steps to guard their resources and people against exploitation without resorting to protectionism. In april 2019, gambia ratified the agreement, bringing the total number of african union au member state ratifications to 22, the minimum threshold for afcftas implementation. On the eve of the 55th anniversary of the formation of the organisation of african unity oau, the predecessor of the african union au, a large bloc of nationstates have signed a document entitled agreement establishing the african continental free trade area afcfta in kigali, rwanda on 2021 march 2018. The 18th ordinary session of the assembly of heads of state and government of the african union, held in addis ababa, ethiopia in january 2012, adopted a decision to establish a continental free trade area cfta by an indicative date of 2017.
The area enables users to operate without paying several types of tax. The african continental free trade area afcfta is a free trade area which as of 2018 includes 28 countries. Civil society organizations urged to play complimentary political roles niamey, niger 4 july 2019 the african union commission in partnership with the united nations economic commission. Jul 12, 2018 the 2018 edition of the african exportimport banks annual flagship report the african trade report titled boosting intraafrican trade. It is hoped the deal will ease access to markets within the region and end problems arising from the fact several countries belong to multiple groups. The free trade area is the largest in the world in terms of the number of participating countries since the formation of the world trade organization. List of books and articles about free trade online. The african free trade zone is also referred to as the african free trade area in some official documents and press releases. Mar 29, 2018 as of last week, there is a new global trade player, the african continental free trade area afcfta. The new zone, called the african continental free trade area afcfta, officially came into being on may 30, 2019, after a minimum threshold of 22 countries confirmed that they had copied its 2018 founding treaty into their national laws a process called ratification. Implications of the african continental free trade area agreement has been prepared at a time when concerted efforts are being made across the continent by both sovereign and corporate entities to deepen economic integration. So the au decided, for now, to emphasis the creation of the continental free trade area, leaving aside the common market, and economic and monetary community.
The creation of a new pan african free trade zone is intended to pave the way for the worlds largest interstate market. The fifth meeting of african union ministers of trade amot, held in kigali, rwanda on 89 march 2018, adopted the legal instruments constituting the african continental free trade area afcfta, namely a the agreement establishing the afcfta, b the protocol on trade in goods, c the protocol on trade in services, and d the protocol on. Also in 2018, most african nations but notably not nigeria and south africa signed an agreement to establish the african continental free trade area, envisioned as a continentwide single market. In the past, nigeria has taken an activist role on african issues, but today its hesitation to sign the african continental free trade area agreement risks leaving the country on the sidelines of. Moodys estimates south africa will be among the countries which benefit most. Nigeria signs african free trade area agreement bbc news. Africas big new free trade agreement, explained the. The summit also endorsed the action plan on boosting intra africa trade biat which identifies seven. It concluded that a continental freetrade agreement would only succeed in meeting the au target of doubling the share of intraafrican trade from 16% of the continents total trade to 32% over. Although the general concept of a free trade zone is uniform in nature, one encounters a number of different types of free trade zones in different countries.
They vary according to national characteristics and the goals set for them by national governments. African leaders launched a continental free trade zone on sunday that if successful would unite 1. Intra african trade growth is estimated at 33% and. In addition, djibouti will create a unified customs system with china, establish a transit trade center and set. It was created by the african continental free trade agreement among 54 of the 55 african union nations. Jul 14, 2016 one of these is ecowas, the economic community of west african states, a coalition of 15 countries in west africa that have already established a free trade zone. The african continental free trade area agreement afcfta came into force on 30 may 2019.
It means that trade will flow between countries with no or much lower import tariffs. The agreement is set to be signed by all 55 member states of the african. A couple of days ago, the african union officially launched the african continental free trade area afcfta. Jun 20, 2019 it concluded that a continental freetrade agreement would only succeed in meeting the au target of doubling the share of intraafrican trade from 16% of the continents total trade to 32% over.
It also estimates that implementing afcfta will lead to around a 60%. Adopted in kigali, rwanda in march 2018, the negotiated framework has entered into force on the 30 th may 2019 and officially launched during a special summit of heads of state of the african. China and djibouti open free trade zone in africa cnbc. This date marked 30 days after 22 countries had deposited their ratification instruments with the african union commission auc chairperson the designated depositary for this purpose, as stipulated in. The agreement establishing the african continental free trade agreement afcfta entered into force on 30 may 2019 for the 24 countries that had deposited their instruments of ratification. The african heads of states and governments pose during african union au summit for the agreement to establish the african continental free trade area in kigali, rwanda. Mar 22, 2018 the african heads of states and governments pose during african union au summit for the agreement to establish the african continental free trade area in kigali, rwanda. This challenge is also an opportunity to extend the provision of. Africa set for a massive free trade area africa renewal. African continental free trade area afcfta african union. African continental free trade area afcfta legal texts and.
African continental free trade area afcfta legal texts. Continents free trade deal a gamechanger for africa. Niamey, niger 7 july 2019 the operational phase of the african continental free trade area, afcfta has been launched. Jul 08, 2019 in 20, the african union launched agenda 2063 with 14 flagship projects including the establishment of an african continental free trade area afcfta. The african free trade zone aftz is a free trade zone announced at the eacsadccomesa summit on 22 october 2008 by the heads of southern african development community sadc, the common market for eastern and southern africa comesa and the east african community eac. Au assembly of heads of state and government decreed, in 2012, the decision to boost intra african trade and fasttrack the continental free trade area cfta. Africa is moving toward a massive and important free trade. Jul 11, 2019 fiftyfour african nations met on sunday to work out an agreement on the pancontinental free trade zone. South africa will be one of the biggest beneficiaries from. In the last month, the required number of endorsements was received by the. After the first meeting, the african association met again in london december 2005 were the present executive members were elected and the constitution was. In 2012, the african heads of state and governments resolved to establish afcfta treaty to create a single continental market for goods and services in member nations of the african union, with. While countries still need to agree on plenty of details, it promises to become the worlds biggest free trade area.
The agreement will be the largest trade agreement in history since the creation of the world trade organization. The creation of a new panafrican free trade zone is intended to pave the way for the worlds largest interstate market. African leaders will decide on sunday which nation will host the headquarters for a continental freetrade zone that aims to eventually unite the. If all 55 african countries join a free trade area, it will be the worlds largest by number of countries, covering more than 1. The africa free zone association afza is an international nongovernmental organisation formed in october 2004 in cape town, south africa at the world free zone convention. The majority of africa union member states, 44 out of 55, have signed a free trade agreement whose aim is to create a single african market of economic cooperation thus creating the biggest economic zone in the world.
The african union has launched the operational phase of the africa continental free trade area afcfta, which will be the worlds largest free trade area by number of countries once its fully up and running. Aug 26, 2019 the new zone, called the african continental free trade area afcfta, officially came into being on may 30, 2019, after a minimum threshold of 22 countries confirmed that they had copied its 2018 founding treaty into their national laws a process called ratification. The free trade area will be the largest in the world by number of countries included. African heads of government agreed to establish a continental free trade area in 2012 and started negotiations in 2015. Africa free zones organization africa economic zones. In zambia, the spirits, motor and textile industries are almost dead.
Jul 04, 2019 african leaders will decide on sunday which nation will host the headquarters for a continental free trade zone that aims to eventually unite the continents 1. In cameroon, banks, agricultural ventures and the national airlines were taken over by foreign investors. Jul 06, 2018 djibouti, a tiny state in east africa, opened a chinesebuilt international free trade zone on thursday. Diverse african economies such as south africa and egypt, are likely to be the drivers of the free trade area, and are likely to benefit from it. Mar 21, 2018 a massive new african trade deal has been signed. New strategy approaches for the african continental free trade area. Mar 26, 2018 diverse african economies such as south africa and egypt, are likely to be the drivers of the free trade area, and are likely to benefit from it the most. The effectiveness of the agreement was unclear, given that the several regional african free trade agreements have generally not succeeded in. The african market has become the dumping ground for all kinds of goods from developed countries and from the east, all in the name of free trade. Understanding the african continental free trade area. Progress, emerging challenges, and future directions. The africa continental free trade area afcfta signed in march 2018 aims to establish a single market across the continent. The free trade area is the largest in the world in terms of the number of.
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