The Southern Times | 6 August 2021
AfCFTA rules of origin talks drag
By Bright Mpepe
Officially operationalised on January 1, 2021, AfCFTA phase 1 negotiations covering trade in goods and services were slated for completion by July.
Mr Silver Ojakol, chief of staff at the AfCFTA Secretariat, said as at July 1, nearly 90 percent of the rules of origin had been agreed upon. However, some countries are still holding out.
In a statement on its website, GTR said, “Rules of origin are crucial, and will have a material impact on how African companies trade with counterparts across the continent. There are thousands of tariff lines, and these rules will specify for each whether a product can be categorised as Africa made and eligible for tariff concessions.”
Mr Stefano Inama, a trade and customs expert at the United Nations Conference on Trade and Development (UNCTAD), is quoted in the statement saying there were disagreements between governments over rules of origin for products in a few “sensitive sectors”.
Pointing to countries such as Egypt and South Africa, Inama said some governments harboured concerns that lax rules of origin could hurt their manufacturing sectors, particularly textiles, clothing and automotives. One fear is that companies will undercut their domestic industries by importing cheap parts or materials from abroad.
“With less stringent rules of origin, they are afraid that other countries will buy inputs from third countries such as China, carry out some manufacturing, then export to South Africa and Egypt, creating problems for their industries,” he noted.
AfCFTA seeks to create a market of 1.2 billion people and a combined GDP of US$2.5 trillion. It constitutes a significant milestone towards realisation of the African Union’s Agenda 2063 for the socio-economic transformation of the continent.
According to the United Nations Economic Commission for Africa, negotiations on the second and third phases of the AfCFTA – which focus on investment, intellectual property, competition and e-commerce – are expected to start this year.