What Is The Most Likely Result Of A New Continent-Wide Free-Trade Agreement In Africa

In addition, a new report by Baker McKenzie and Oxford Economics, Beyond COVID-19: Supply Chain Resilience Holds Key to Recovery, showed that the pandemic has caused an unprecedented global supply chain crisis, mainly due to the creation of temporary “production deserts,” where production of an entire city, region or country is so strangled by bait conditions that it becomes a non-go-go zone. to get something other than important products like food and medicine. Although the effects of COVID-19 on trade in Africa have been detrimental, most supply chain disruptions are expected to be in the short term. In addition, the continent`s over-reliance on external imports has highlighted the intra-regional trade benefits of AfCFTA. The Continental Free Trade Area (AfCFTA) agreement will create the largest free trade area in the world in terms of the number of participating countries. The pact connects 1.3 billion people in 55 countries for a total gross domestic product (GDP) of $3.4 trillion. It has the potential to lift 30 million people out of extreme poverty, but achieving its full potential will depend on the introduction of meaningful political reforms and trade facilitation. Who`s going to win the most? African nations with large production sites such as South Africa, Kenya and Egypt would get the fastest benefits. Successful implementation of AfCFTA would help mitigate the negative effects of COVID-19 on economic growth by supporting regional trade and value chains by reducing trade costs. In the longer term, AfCFTA would provide a path for integration and growth reforms for African countries. By replacing the patchwork of regional agreements, streamlining border procedures and prioritizing trade reforms, AfCFTA could help African countries strengthen their resilience to future economic shocks. AfCFTA should also change the way Member States act at the international level, harmonizing trade practices, generating additional efficiencies, having access to global value chains and systematizing the way Africa treats the rest of the world.

With the African Growth and Opportunity Act (“AGOA”) due to expire in 2025, this will allow the United States and AfCFTA member states to revise the AGOA framework in a manner consistent with afCFTA implementation, not least because the United States is unlikely to continue to maintain a unilateral trade agreement. In order to obtain access to trade preferences under the GSP, potential beneficiaries must meet the relevant eligibility criteria, including the provision of internationally recognized workers` rights, satisfactory protection of intellectual property rights and appropriate market access.