Trade Liberalization

In my view variable geometry is likely to further slow down the implementation of the AfCFTA because it is a way to accommodate less advantageous countries or countries unwilling to move as fast as others.  Even if variable geometry is the only way to move forward in trade agreements of the 21th century as some have argued, it makes trade liberalization more complicated and slows down integration initiatives. More detailed research on variable geometry from an African perspective needs to be undertaken because the continent cannot afford the potential failure of the AfCFTA.

This blog post does not focus on the different reasons that makes integration difficult. Rather, it argues that the structure of the agreements of African Union (AU) contributes to the lack of political commitment among leaders which has been a missing ingredient for successful integration in Africa.

The creation of a single continental unit is meant to allow the formation of larger economies of scale and enhance the region’s specialization in agricultural and industrial production. However, the reduction or even elimination of tariffs will not be enough to reach the AU’s objective of doubling the existing level of intra-African trade, as significant and continent-specific challenges lie ahead.

The AfCFTA is thus a positive development for Africa as it seeks to advance its own interests through intra-African trade. For a region of the world that contributes to only about 3% of global trade, increasing intra-African trade is a laudable project. For example, while intra-Asia and intra-Europe trade account for 59 per cent and 69 per cent of exports respectively, intra-African trade accounts for only 18 per cent of total exports. However, despite the modest successes at improving intra-African trade through the eight African Union-recognized regional trade agreements on the continent, there are genuine apprehensions regarding the viability of the proposed AfCFTA.

The AfCFTA has a broad objective of creating “a single continental market for goods and services, with free movement of business persons and investments” and a potential to significantly impact international trade relations simultaneously at the continental and global levels. Yet, situated in the context of a challenging and protracted history of non-implementation of regional trade agreements, and a complex international and regional trade wars with divisive implications in contemporary multilateral trading system, there are reasons to be modest about the impact of the AfCFTA.

In this essay, I argue that the AfCFTA needs to rethink its relationship with the continental emancipatory movements. Its focus on economic integration without social-emancipatory movements undermines its central aim of creating “the Africa we want.” Its top-down approach fails to capture labor movements in Africa. Additionally, by creating yet another integration organization in Africa despite the existence of several regional and continental integration projects it cashes organizational costs that could have been spent in creating a labor-friendly integration project.