Regional Economic Communities critical for AfCFTA implementation, experts say

Cross-border cargo trucks transport goods from Tanzania to Rwanda. Both the process and the substance of the AfCFTA are based on best practices of Regional Economic Communities. / Photo: Craish Bahizi.

The role of Regional Economic Communities (RECs) “will remain critical” once implementation of the African Continental Free Trade Area starts, officials including Prudence Sebahizi, Chief Technical Advisor on the AfCFTA at the AU Commission, have told The New Times.

More than a year after African leaders met in Kigali in March 2018 and started the process to establish the trading bloc, the agreement establishing the African Continental Free Trade Area came into force in May 2019.

 

Trading under the AfCFTA agreement was earlier set to commence on July 1. But because of the ongoing Covid-19 global pandemic, this launch was postponed to January 1, 2021.

 

Stressing that the role of Africa’s eight RECs will remain critical once implementation starts, Sebahizi noted that “it should be emphasized that the AfCFTA process has borrowed vastly from Regional Economic Communities.”

 

Besides the East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA) and the Economic Community of Central African States (ECCAS), which Rwanda is a member, the AU recognises five other RECs.

These are the Southern African Development Community (SADC), the Arab Maghreb Union (UMA), the Community of Sahel-Saharan States (CEN-SAD), the Economic Community of West African States (ECOWAS), and the Intergovernmental Authority on Development (IGAD).

However, not all of them have formed Free Trade Areas yet, which is required for liberalizing trade in goods.

From the institutional point of view, Sebahizi said, the Continental Task Force on the AfCFTA comprises the AU Commission and the eight Regional Economic Communities’ Secretariats, among others.

This Task Force set up to provide technical assistance to the negotiations process, Sebahizi explained, met many times during the process of negotiating the AfCFTA Agreement.

“The draft text that formed the basis for negotiating the AfCFTA Agreement was based on already existing treaties, protocols and trade agreements of regional economic communities. The AfCFTA negotiators have, to a large extent, been involved in negotiations in their respective regional organizations,” Sebahizi said.

“In this regard, both the process and the substance of the AfCFTA are based on best practices of Regional Economic Communities. This confirms the already known anecdote that Regional Economic Communities are building blocks of the AfCFTA.”

Dr Halima Noor Abdi, Senior Trade Expert at the AU Commission, told The New Times that Africa’s RECs are meant to be the building blocks for the AfCFTA.

The RECs, she said, will therefore have a key role to play in supporting the finalisation and implementation of the AfCFTA Agreement. This Agreement also promises to resolve the challenges of overlapping REC membership, she said.

“The AfCFTA will not replace Africa’s existing regional economic communities (RECs). In fact, the AfCFTA Agreement explicitly recognises the RECs as building blocks for the AfCFTA,” she explained.

Furthermore, the agreement envisages that RECs that have already achieved deeper integration – as is the case for the EAC – will continue to apply their regional trade regimes for intra-regional trade, Abdi said.

Given that the majority of intra-African trade is conducted within RECs, she explained, these institutions will continue to play a central role in the African trade landscape.

According to Sebahizi, it should be understood that “the success of the AfCFTA will call for deeper integration at regional level.”

From the legal point of view, Sebahizi said, the Agreement shall not nullify, modify or revoke rights and obligations under pre-existing trade agreements that members already concluded at regional level.

He said: “The Treaty establishing the African Economic Community (Abuja Treaty) provides a roadmap for Africa’s integration agenda that will culminate into African Single market through stages. The formation and strengthening of Regional Economic Communities is one of those stages.”

“Therefore, both the AfCFTA and Regional Economic Communities will pave the road towards achieving a Continental Customs Union as well as Common Market that will lead to One African Single Market,” he added.

In short, he said, the RECs continue to facilitate regional economic integration between members of the individual regions and through the wider African Economic Community (AEC), which was established under the Abuja Treaty (1991).

Future of the RECs

Article 19(2) of the AfCFTA Agreement contains an important provision about the future of the RECs, Abdi noted. It is noted that State Parties that are members of other regional economic communities, regional trading arrangements and custom unions, which have attained among themselves higher levels of regional integration than under this Agreement, shall maintain such higher levels among themselves.

For example, Abdi said, the EAC Secretariat played a key role in the AfCFTA process. Though the AfCFTA was negotiated by individual states, the EAC common external tariff (CET) provided the basis for the EAC member states’ tariff negotiations under the AfCFTA.

Another example, she added, is that the EAC Secretariat also participated in a broad range of regional consultations on the AfCFTA, including with the private sector and civil society organisations.

“In the future, the RECs will play a key role in supporting training and development of national customs administrations to enforce AfCFTA rules. Given that the AfCFTA will introduce continental rules of origin which will need to coexist with RECs own rules of origin, efficient border control measures will need to be implemented to avoid trade deflection,” she said.

“This is important for AfCFTA State Parties. The RECs can provide national customs administrations with relevant training on how to implement these two sets of rules of origin to facilitate efficient customs clearance procedures at borders.”

In February, the AU adopted a revised protocol - replacing the one of 2008 - on relations between the AU and RECs.

In addition, the Assembly mandated the AfCFTA Secretariat and RECs to develop a framework of collaboration before the start of trading.

“The purpose of the framework of collaboration is to provide a strategic partnership framework among the AUC, the AfCFTA Secretariat and the Secretariats of the RECs to facilitate coordination and collaboration between the parties with regard to the AfCFTA and the boosting intra-African trade,” Sebahizi said. All this, he explained, is aimed at facilitating the realization of the African Economic Community as envisaged in the Abuja Treaty of 1991.

“The Framework which is currently being developed identifies the areas and modalities of collaboration between the Commission, the AfCFTA Secretariat and the Secretariats of the RECs and establishes working arrangements for its implementation,” Sebahizi said.

“The framework of collaboration would enhance transparency, mutual trust as well as remove overlaps and duplication of efforts, all of which would equip all these institutions to perform and deliver to the expectations of the African people.”

READ ALSO: Report: Rwanda most committed to AfCFTA

jkaruhanga@newtimesrwanda.com

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