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1 [1] (February 7, 2020)

handle is hein.crs/govcaer0001 and id is 1 raw text is: 01;0i E.$~ & February 7, 2020 African Continental Free Trade Area (AfCFTA) On May 30, 2019, the framework agreement establishing the African Continental Free Trade Area (AfCFTA) entered into force. Trading under the agreement, however, is not expected to occur until mid-2020 at the earliest, as negotiations continue on critical commitments, including tariff liberalization schedules. If fully realized, the AfCFTA would cover 54 countries (the largest of any regional trade bloc), creating a market encompassing 1.2 billion people with combined economic output in 2018 of $2.5 trillion. Through the AfCFTA, the African Union (AU) seeks to create a pan-African free trade area liberalizing the flow of goods and services, thereby increasing intra-African trade and enhancing regional development prospects. All but one (Eritrea) of the AU's 55 members have signed the agreement, and 29 had ratified it as of January 2020. Many observers hailed the AfCFTA agreement's entry into force as a milestone in African economic integration. Its impact, however, will depend on future negotiations and on its successful implementation in a region in which some past trade integration efforts have fallen short of their ambitions. The United States, partly as directed by Congress, has provided assistance to expand Africa's intra-regional and global trade through various initiatives. The Trump Administration broadly supports the AfCFTA and has pledged U.S. assistance for its implementation but has also stated interest in negotiating one or more bilateral trade agreements in the region, which could potentially complicate AfCFTA negotiations and implementation. Aspirations for Africa-wide trade liberalization date to the 1960s and the establishment of the Organization of African Unity (OAU), which sought to foster economic cooperation among its members. Efforts by the OAU and its successor, the AU, created in 2002, have primarily aimed to use Africa's eight regional economic communities (RECs, sub- regional organizations with varying levels of policy and economic integration) as the building blocks for eventual pan-African integration. Initial plans envisioned transforming the RECs into customs unions (free trade among members and a common external tariff rate) before merging them into a continental trading bloc. These plans eventually became untenable given the REC's variable performance and their increasingly overlapping membership. The AfCFTA approach is more flexible; it allows for an agreement that includes commitments between both RECs and individual states. The AfCFTA is intended to liberalize trade in goods and services and establish rules on competition policy, IPR, and investment, to be enforced through a formal dispute settlement mechanism. The AU Assembly heads the agreement's institutional structure and administers the agreement, including consideration of future amendments. Ultimately, the AfCFTA is intended to lay the groundwork for an Africa-wide customs and monetary union with the free movement of people. The Phase 1 agreement, some of which is now in effect, includes protocols on goods, services, and enforceable dispute settlement, and annexes on customs and trade facilitation, sanitary and phytosanitary standards, nontariff and technical barriers to trade, and trade remedies. Annexes covering specific commitments for goods and services market access, however, are still under negotiation, as are the commitments on Phase 2 issues (IPR, investment, and competition). Key Developments Leading to the AfCFTA S1980-2002 - Lagos Pan of Action (1980-2000) lays oita framework for an African Economic Community (AEC). In 199 1, the Abuia Treaty sets 34-year timeframe to create the AEC with a plan to form regional customs and monetary unions, eventually merging them into one continental economic community. In 2002, the African Union (AU) succeeds the QAU. * 2008 - Three RECs in eastern and southern Africa launch plans for a Tripartite FTA, potentially covering 27 of the 55 AU members. * 2012 - AU establishes a plan for creating the AfCFTA in which the Tripartite FTA and other REC ETAs are to proceed in tandem with the AfCFTA and later merge. * 2015 - AfOFTA negotiations launiched. * 2017- Tripartite FTA negotiations concluded (not yet in force). * 2018- AfCFTA framework agreement negotiations concluded. * 2019 - AfCFTA framework agreement enters into force. The AfCFTA protocol on goods calls for the progressive elimination of tariffs and AU members have agreed to eliminate duties on 90% of tariff lines within five years. An additional 7% of tariff lines, for sensitive products, will have longer phase out periods and 3% of tariff lines (not to exceed 10% of imports by value) may be excluded entirely. These tariff schedules remain under negotiation, so no tariffs have been reduced to date. Special treatment for least developed countries, a potentially large category, is also to apply. Existing regional customs unions (such as the East African Community) are expected to negotiate in blocs, while member states not in customs unions may negotiate individually. Annexes establishing guidelines on rules of origin are completed, but specific rules determining whether a good originates from within the AfCFTA and is eligible for preferential treatment are under negotiation. In 2018, 16% of Africa's total exports were intra-regional, which was considerably below that of most global regions, including North America (30%), Asia (60%), and Europe (69%). Long-term trends in Africa, however, suggest such trade is increasing. Intra-African trade rose from 7% to 16% p\w -- , gn'a', goo mppm qq\ a , q 's I 11LIANJILiN,

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