Free Trade Area Agreement Research Articles

The African Continental Free Trade Area Agreement Vis-a-Vis Its Data Protection Concerns

The African Continental Free Trade Area(AfCFTA) Agreement (the Agreement) is an ambitious move at integrating the African continent, improving its domestic economy, and a signaling light of Africa's potential in world trade. It is a laudable step by the African Union to meet its AGENDA 2063. Flowing from this, protocols to the Agreement aim to ensure the elimination of possible bottlenecks, and by this, ease of trade is promoted in Africa. Despite this noble and commendable intention, the Agreement fails to establish a robust data governance regime, especially to protect personal data in the exchange of goods and services in the emerging African digital economy. This paper seeks to appraise the Agreement in the light of the data protection debate and other incidental issues.

AfCFTA - BEYOND THE FINE PRINT

The African Continental Free Trade Area (AfCFTA) Agreement presents a new dawn in international trade for and among African countries. While the agreement establishing it is in itself mighty a feat, mightier still its smooth implementation will prove to be. A few points that may smoothen its journey from agreement to reality are considered in this paper.

ICT Diffusion, Foreign Direct Investment and Inclusive Growth in Sub-Saharan Africa

This study examines the joint effects of ICT diffusion (composed of access, usage and skills), and foreign direct investment (FDI) on inclusive growth in sub-Saharan Africa (SSA). The study draws on data from the World Bank’s World Development Indicators, and the Global Consumption and Income Project for the period 1980–2019 for the analysis. The study provides evidence robust to several specifications from ordinary least squares and dynamic system GMM estimation techniques to show that: (1) FDI and ICT diffusion and corresponding components (ICT access, usage, skills) induce inclusive growth in SSA; (2) compared to its direct effect, FDI is remarkable in fostering shared growth in SSA in the presence of greater ICT diffusion, and (3) compared to ICT access and usage, ICT skills are more effective in driving inclusive growth in SSA. Overall FDI modulates ICT dynamics to engender positive synergy effects on inclusive growth. Policy recommendations are provided in line with the implementation of the African Continental Free Trade Area (AfCFTA) Agreement and the projected rise in FDI in SSA from 2022.

Using Utilization Rates to Identify Rules of Origin Reforms: The Case of EU Free Trade Area Agreements

Governments are increasingly entering FTAs and mega-regionals to secure market access for their firms. Utilization rates are used to monitor whether firms are using these FTAs. This paper is part of a recent stream of studies to dash out enduring myths that preferences are not used when preferential MFN rates are low or for unknown or vague reasons. Contrary to this sort of conventional wisdom this study advocates that low utilization rate is a valuable and unequivocal sign that reform of rules of origin and related administrative procedures is needed to make the FTA attractive and meaningful to the private sector. By using a “repeated offender” methodology this paper identifies a series of product specific rules of origin (PSROs) causing low utilization rates. Such PSROs are the candidate for reforms towards more lenient requirements that are commercially viable for firms.

Is It Possible a Full Free Trade Area Agreement between Mexico and Malaysia?

Is It Possible a Full Free Trade Area Agreement between Mexico and Malaysia?

Local production and international trade regulations: challenges and legal framework

This paper discusses local production and international trade regulations that is the legal framework and challenges encountered in ensuring compliance with such trade regulations. It contextualizes the meaning of local production and its benefits. This paper further discusses the key international trade regulations such as the World Trade Organisation (WTO) which was created out of the General Agreement on Tariffs and Trade (GATT). At regional level specifically Africa, this paper discusses the African Continental Free Trade Area Agreement (AfCFTA) whose main focus is to establish a free trade area. Furthermore, this paper discusses the challenges encountered in ensuring that local production by African countries is in compliance with the international and regional trade regulations.

Towards Efforts to Enhance Tax Revenue Mobilisation in Africa: Exploring Synergies between Industrialisation and ICTs

Motivated by the momentous rise in ICT diffusion, the implementation of the African Continental Free Trade Area agreement, and the expected rebound of foreign direct investment inflow to Africa from 2022, this study examines the joint effects of industrialisation and ICT diffusion on resource mobilisation in Africa. To this end, we use data on 42 African countries for the period 1996 – 2020 for the analysis. First, we provide evidence robust to several specifications from the dynamic system GMM to show that although unconditionally both industrialisation and ICT diffusion enhance (i) goods and services tax (GST), and (ii) profits, corporate and income tax (PCIT) mobilisation efforts in Africa, the effects of the former are rather remarkable in the presence of the latter. Particularly, the results show that, while ICTs amplify the effect of industrialisation on GST, only ICT usage and ICT skills matter for PCIT. Second, the study unveils ICT thresholds for complementary policies. Accordingly, industrialisation and ICTs are necessary and sufficient conditions for tax revenue mobilisation only below some ICT thresholds. Above these ICT thresholds, complementary policies are needed to maintain the overall positive incidence on tax revenue mobilisation. Policy recommendations are provided in the end.

The African Continental Free Trade Area Agreement: Aiding Intra-African trade towards deeper continental integration

The signing of the African Continental Free Trade Area Agreement (AfCFTA) reflected many years of hard work by the continent’s forefathers who include Kwame Nkrumah of Ghana, Julius Nyerere of Tanzania, Jomo Kenyatta of Kenya, Kenneth Kaunda of Zambia, Patrice Lumumba of Congo, Robert Mugabe of Zimbabwe and Frantz Fanon of Algeria, but to mention a few. The AfCFTA also depicts the novel work of the Organisation of African Unity (OAU), and later the African Union (AU), towards shaping a vision of continental integration, embedded in the vision of the African Economic Community (AEC), a by-product of the Abuja Treaty. Vision 2030 and the long-term continental vision of Agenda 2063: ‘The Africa We Want’ are also designed to contribute towards deeper and successful continental integration. However, by now the excitement over the AfCFTA signing has subsided. For each member state, the reality of being an AfCFTA party has started to sink in. Some member states have expressed concern and fear over problems such as opening their markets and accepting continental competition, allowing free movement of persons and trade across borders. Others find it too expensive to deal with the internal political fallout from their populace’s scepticism regarding the agreement’s effects on jobs (due to increased competition) and livelihoods. This article examines the AfCFTA to determine its impact and related advantages in respect of continental trade policies. It discusses the advantages of the AfCFTA and its potential challenges.

Towards Macro-Economic Convergence in SACU: The Position of Botswana

In light of recent developments such as the African Continental African Free Trade Area agreement (AfCFTA), incrementalist approaches to regional inte gration that focus on sub-regions seems to have been pushed to the backburner as more focus puts the entire African continent at the centre of integration processes. With all its potential, gradual macro-economic convergence has accordingly been neglected. Discussions on macro-economic convergence have on the other hand been cast over the broader sub-region such as the Southern African Development Community (SADC) where a number of indicators and targets have been identified and pursued closely. Whilst looking at Botswana as a point of departure, this paper argues that incremental macro-economic convergence is pivotal to broader regional integration and the Southern African Customs Union (SACU) provides an ideal stepping-stone. An incrementalist approach to macro-economic convergence as well as broader regional integration should begin with identifying key formal institutions that serve as custodians of macro-economic policy such as the central banks and departments of finance or treasuries. Using secondary data sources, with Botswana as a case study, this paper foregrounds macro-economic convergence, macro-economic policy making institutions, and SACU as critical building blocks for broader regional integration.

Towards Macro-Economic Convergence in SACU: The Position of Botswana

In light of recent developments such as the African Continental African Free Trade Area agreement (AfCFTA), incrementalist approaches to regional inte gration that focus on sub-regions seems to have been pushed to the backburner as more focus puts the entire African continent at the centre of integration processes. With all its potential, gradual macro-economic convergence has accordingly been neglected. Discussions on macro-economic convergence have on the other hand been cast over the broader sub-region such as the Southern African Development Community (SADC) where a number of indicators and targets have been identified and pursued closely. Whilst looking at Botswana as a point of departure, this paper argues that incremental macro-economic convergence is pivotal to broader regional integration and the Southern African Customs Union (SACU) provides an ideal stepping-stone. An incrementalist approach to macro-economic convergence as well as broader regional integration should begin with identifying key formal institutions that serve as custodians of macro-economic policy such as the central banks and departments of finance or treasuries. Using secondary data sources, with Botswana as a case study, this paper foregrounds macro-economic convergence, macro-economic policy making institutions, and SACU as critical building blocks for broader regional integration.

Nigeria’s Border Closure: Implications for Africa Continental Free Trade Area Agreement

African Continent Free Trade Area Agreement (AFCFTA) has long been considered as a mechanism for accelerating economic growth and engendering visible reductions in income inequality. Trading activities under the AFCFTA arrangement was expected to kick start in July 2020 but recent developments suggest that the implementation may be slowed down. The closure of Nigerian border barely 3 months after signing the pact is an indication of the low level of preparedness and commitments by most member states. The argument in favour of the border closure is further strengthened by the current reality of Coronal virus pandemic which suddenly hit the world's population. Moving forward, Nigeria's actions render the seriousness and prospects of regional integration in Africa a little doubtful. Apart from diverting focus from areas that can enhance free trade agreement such as trade data capture, transportation infrastructure, and border protection, the Nigeria's border closure may dampen the enthusiasm of other countries towards the free trade deal. The effect of the land closure placed a downward strain on the national income and GDP of Nigeria's neighbouring countries particularly Benin republic, Niger republic, Cameroun and Ghana. As a way forward, AFCTA should encourage member countries to diversify and specialize in the production of goods for which they have comparative advantage in order to deepen intra-African and intra-regional trade and for participating countries to benefit from economies of scale.

A Critical Appraisal of the African Continental Free Trade Area Agreement

Despite Africa’s fragmented sub-regional economic regimes, the AfCFTA Agreement represents a significant moment for African States to harness the continent’s international trade and investment opportunities on their own terms. The AfCFTA Agreement initiates a set of complex and lengthy negotiations with a view to reducing tariffs, galvanize industrial production and boost Africa’s trade. The success of Africa’s reinvigorated liberal internationalism embodied in the AfCFTA Agreement depends on a host of factors that primarily includes its effective implementation.This Chapter situates the AfCFTA Agreement in the historical and contemporary contexts of the mixed performance of sub-regional economic communities and other regimes in which its implementation will be embedded. The Chapter also examines the pre-existing structural deficiencies that the COVID-19 pandemic has brought to the fore and their implications for the AfCFTA Agreement. Building on the foregoing, the Chapter also critically examines the blindspots of the pan-Africanist underpinning of the AfCFTA Agreement for the future of trade regime in Africa.The Chapter examines the substantive provisions of the AfCFTA Agreement and its institutions focusing on the question of supranationality in the decision-making process. In the third section, I deepen the Chapter’s analysis by examining the promise of the AfCFTA in the shadow of Africa’s mixed record of economic cooperation. Based on the analyses of the systemic deficiencies in African regional trade regimes, as impacted by the COVID-19 pandemic. To illustrate the latter, I draw on the finance sector - debt burden conundrum and digitalisation. The examples are selected to illustrate areas where historical deep-seated challenges exist and emerging sectors that African leaders should capitalise for a better post-pandemic Africa. I contend that a critical understanding of pan-Africanism and in a morphological sense that acknowledges its shortcomings is important to understanding the attitude of African States to the lethargic implementation of regional trade agreements. Operating with such consciousness, I contend, engenders a better understanding of the intrigues of the implementation phase, as opposed to the narrow, lack of political will arguments.

Potential trade, welfare and revenue implications of the African Continental Free Trade Area (AfCFTA) for Ghana: An application of partial equilibrium model

This study estimates the potential implications of the implementation of African Continental Free Trade Area (AfCFTA) Agreement for Ghana in terms of trade, welfare and revenue effects. By applying the WITS‐SMART simulation model on 2018 disaggregated international trade data, the paper finds that total trade effects in Ghana are likely to surge by US$ 148.3 million while promoting consumers' welfare by US$ 8.597 million. However, revenue losses are imminent as the country might experience a drop in tariff revenue of US$ 8.604 million. Overall, the free trade area is expected to improve on the country's trade balance as exports are envisaged to outweigh imports. In order to mitigate the revenue losses, the paper recommends that the country keep substantial portion of tariff lines for sensitive and excluded products over a longer period during the liberalization.

Dispute Settlement under the African Continental Free Trade Area Agreement: A Preliminary Assessment

The African Continental Free Trade Area Agreement (AfCFTA) will add a new dispute settlement system to the plethora of judicial mechanisms designed to resolve trade disputes in Africa. Given the discontent of member states and the limited impact that the existing highly legalised trade dispute settlement mechanisms have had on regional economic integration in Africa, this article undertakes a preliminary critical assessment of the AfCFTA Dispute Settlement Mechanism (DSM). The article situates the AfCFTA-DSM in the overall discontent and unsupportive practices of African states with highly legalised dispute settlement systems and similar WTO-styled DSMs among other shortcomings. Notwithstanding the transplantation of the WTO-styled DSM and the ineffectiveness of previous similar attempts in Africa, the article argues that the Consultation Phase offers the AfCFTA member states a realistic chance of engaging with the DSM. In conclusion, the article highlights other factors such as private sector involvement, the strategic operationalisation of the DSM, and geopolitical and power dynamics as critical to the success of the dispute settlement system.

African Continental Free Trade Area Agreement – Does the Facts Support the Benefits for Nigeria?

Hesitantly, but finally, Nigeria joined the African Continental Free Trade Area (AfCFTA) with the Nigerian President, Mohammadu Buhari, signing the protocol at the African Union Summit in Niamey on July 7, 2019 based on perceived benefits. This study interrogated the purported benefits for Nigeria using standard trade costs between Nigeria and peer countries in Africa. Using a content analytical framework on a dataset by World Development Indicators and World Integrated Trade Solutions, the study found that average tariff rate in Nigeria is very high when compared to that of her major trading rivals in Africa like Ghana, Egypt and South Africa. Furthermore, the study found Nigeria in a comparative disadvantaged position on the ease of doing business in the same setting. Also, Nigeria’s major export commodity is crude oil and lubricants which has little or no market in the continent. Besides, trade-related infrastructure, especially roads and maritime corridors, in Nigeria is poor even by African standards. With these structural problems, ipso facto, Nigeria may not benefit maximally and comparatively in the enlarged continental market envisioned by the AfCFTA agreement. The study therefore, recommended that Nigerian government should continue to maintain the present cautious approach and refrain from making further commitments on the AfCFTA deal. In the meantime, the country should embark on massive infrastructural and trade-related development, improve the ease of doing business and diversify the economy in order to be in vintage position to exploit the potential opportunities offered by the AfCFTA in the medium-to-long term horizon.

Challenges to Regional Cooperation in South Asia: An Overview

The devastating effects of the Second World War significantly affected states, their resources and the overall balance of peace. As a result, states began to search for a new model that would not only promote and expand trade but would also contribute to world peace. Since the 1980s there has been an increase in regional cooperative projects all over the world. The concept of regional cooperation revolves around the idea that states in a shared geographical space cooperate with each other in order to achieve goals that go beyond the capacity of individual national attainment. Regional cooperation eventually found its place in South Asia. As a result, South Asian Association for Regional Cooperation (SAARC) was established in 1985 and the South Asian Free Trade Area (SAFTA) agreement came into force in 2006. Despite these mechanisms, regional cooperation remained relatively low. Both economic and non-economic factors are responsible for this situation. Factors that range from tariff and non-tariff barriers to physical connectivity to asymmetric power relations and security concerns have served as obstacles to achieve regional cooperation in South Asia. In order to overcome these barriers, South Asian states must maintain flexibility in dealing with highly political issues in order to make way for regional growth and economic development.

The African Continental Free Trade Area

Political momentum towards Africa-wide free trade has been intensifying. In March 2018, over 40 countries signed the African Continental Free Trade Area (AfCFTA) agreement. Once fully implemented, the AfCFTA is expected to cover all 55 African countries, with a combined GDP of about US$2.2 trillion. This SDN takes stock of recent trade developments in Sub-Saharan Africa and assesses the potential benefits and costs of the AfCFTA, as well as challenges to its successful implementation. In addition to increased trade flows both in existing and new products, the AfCFTA has the potential to generate substantial economic benefits for African countries. These benefits include higher income arising from increased efficiency and productivity from improved resource allocation, higher cross-border investment flows, and technology transfers. Besides lowering import tariffs, to ensure these benefits, African countries will need reduce other trade barriers by making more efficient their customs procedures, reducing their wide infrastructure gaps, and improving their business climates. At the same time, policy measures should be taken to mitigate the differential impact of trade liberalization on certain groups as resources are reallocated in the economy and activities migrate to locations with comparatively lower costs.

Ukraina w Partnerstwie Wschodnim: osiągnięcia i perspektywy

May 2019 marked the 10th anniversary of the launch of the European Union’s Eastern Partnership initiative, which encourages democratic reforms in Azerbaijan, Armenia, Belarus, Georgia, Moldova and Ukraine and the strengthening of the relations and cooperation between these countries and the EU. During this period, significant results were achieved in terms of political association, economic relations and regulatory convergence. Thanks to this initiative, Moldova, Georgia and Ukraine signed association and free trade area agreements (DCFTAs) and achieved visa-free travel. One of the main drawbacks of the programme at this stage is that it does not provide for a differentiated approach towards partner countries and deeper cooperation with those already signatory to Association Agreements. The anniversary of the Eastern Partnership encourages to take stock of the results of the initiative and identify perspectives for its further development. The aim of this article is to identify the main achievements of the Eastern Partnership from the perspective of Ukraine’s priorities and interests, as well as to propose a new effective model of relations between Ukraine and other partner countries with the EU under this initiative. The text sets out and analyses the main stages of the cooperation between Ukraine and the EU in the years 1991–2019, especially the participation of Ukraine in the European Neighbourhood Policy and the Eastern Partnership. The article shows that the Eastern Partnership policy and its implementation mechanisms need a structural review and differentiated, individual approaches that would meet the needs, expectations and interests of all the parties. If the EU intends to continue building mutually beneficial relations with its eastern neighbours, it should not only maintain the existing initiative, but also adapt it effectively to the challenges of the present. The EU should therefore develop a sufficiently attractive and effective model of cooperation to support pro-European reforms in its partner countries.

The African Continental Free Trade Area in a Decaying Multilateral Trading System: Questioning the Relevance of the Enabling Clause

The signature of the African Continental Free Trade Area (AfCFTA) Agreement during the 10th Extraordinary Summit of the African Union (AU) Assembly of Heads of State and Government held on 21 March 2018, in Kigali, Rwanda, marks a decisive turn in African regional economic integration. After speedily securing the minimum threshold of 22 signatures, the Agreement, with the Protocols on Trade in Goods, Services and Dispute Settlement, entered into force on 30 May 2019. While the AfCFTA comes at a very good time for the continent especially by proposing African solutions to African problems, it also happens amidst a backlashed multilateral trading system epitomised by the US-China trade war, the WTO negotiations stalemate and the likely demise of its dispute settlement mechanism, as well as the United Kingdom’s exit from the EU (Brexit). The AfCFTA’s main aim is to create a single continental market for goods and services, with free movement of businesspersons and investments, and thus pave the way for accelerating the establishment of the continental Customs Union. While the establishment of existing regional trade agreements (RTAs) has not always been conditioned on the satisfaction of the WTO rules on the issue, this article examines the regime under which the AfCFTA should be scrutinised. This calls for the dissection of the pertinence and the desirability of the Enabling Clause as opposed to Article XXIV for this scheme composed of developing and least-developed countries. The paper notes the tendency since 1979 to notify intra-African RTAs under the Enabling Clause contrary to earlier practice.

African Continental Free Trade Area Agreement: The Euphoria, Pitfalls and Prospects

The ratification of African Continental Free Trade Agreement (AfCFTA) climaxes African Union effort to foster intra-African Trade. AfCFTA is expected to foster socio-economic development and industrial competitiveness in Africa. AfCFTA will engender massive liberalization of intra-African trade in goods and services, making it easier for business to trade across borders and reduce the costs of trade. But there are fears that a successful implementation of the agreement in a continent that lacks capacity, industrial competitiveness and infrastructure will be fraught with challenges. The article examines the dynamics, and contends that the success of AfCFTA will be significantly dependent on a number of factors, namely the level of commitment exhibited by the Member States, availability of technical capacity and infrastructure, transparency and accountability of processes, and the manner infractions and complaints are addressed or redressed.