The second phase of services liberalization is anticipated to cover the remaining sectors. The five prioritized sectors for liberalization within AfCFTA include business services, communication, financial services, transport and tourism.
#African trade blocs how to
Negotiations are continuing with respect to how to open up the service sector. Admittedly, the implementation process has been slower than anticipated, with tariff books still being updated and administrative procedures getting rolled out. To date, it has been reported that 41 countries and the RECs, including SACU, EAC, CEMAC and ECOWAS, have submitted their tariff offers and service commitments. There is already a degree of liberalized trade and integration under the eight RECs recognized by the African Union, and other customs and monetary unions that exist elsewhere on the continent. Trading under AfCFTA commenced on 1 January 2021 under a liberalized trade regime that would gradually lead to an integrated continental market with tariffs phased out on 97% of tariff lines within 10 to 13 years.ĪfCFTA covers both goods and services, and provides a platform for individual countries or Regional Economic Communities (RECs), as applicable, to engage in intra-African trade, through offers of tariff concessions and service commitments with reciprocal most-favored-nation treatment. Pomy Ketema, Counsel at Baker McKenzie in New York, discusses the agreement’s latest developments, and how businesses in Africa can benefit from AfCFTA, noting that the profitability of any endeavor depends on many factors, commercial and otherwise. The African Continental Free Trade Area (AfCFTA) is one of the largest trading blocs in the world with the majority of African countries now operating under its preferential trade framework.