Member states of the African Continental Free Trade Area (AfCFTA) concluded on Saturday their negotiations on rules of origin, a move expected to further reduce tariffs on original goods within the African continent.
Ebrahim Patel, chairperson of the African Union (AU) Ministers of Trade, told a press briefing that the adopted rules could cover 87.7 percent of goods on the tariff lines of the AU member states.
Although trading under AfCFTA had started officially on Jan. 1, the problems regarding rules of origin remained unresolved, making it difficult to identify products that could enjoy the preferential tariff regime under the agreement.
“That is a big breakthrough,” said Patel, adding that the agreed rules of origin would become the basis for full-scale trade among the various member states under the free trade agreement to boost Africa’s economic growth.
“For ordinary citizens on our continent, this means more jobs, more economic opportunities, and Africa’s opportunity to say we want to industrialize. We cannot simply remain the generators of raw materials,” he added.
Wamkele Mene, the secretary-general of AfCFTA, said the conclusion of negotiations on rules of origin was an important milestone towards a successful implementation of the free trade pact.
“Now that we have 87.7 percent of rules of origin agreed, we are now in the position for member states to gazette these legal instruments at the national level so that countries can apply these rules of origin from a customs point of view,” Mene said.
The AfCFTA agreement is the largest free-trade area in terms of the participating countries since the formation of the World Trade Organisation (WTO), as it would unite the 55-member countries of the AU in tariff-free trade.
The agreement’s countries have a cumulative GDP of $2.5trn and a market of 1.2 billion people. The free-trade area, which will include an easing of travel across the continent, is hoped to encourage Africa’s trade to diversify away from its traditional commodity exports outside of the continent, the volatile prices of which have hurt the economies of many countries.