Trial sale of commodities through AfCFTA begins

POSTED: 9th Aug

Tanzania, Kenya and Rwanda will trial sale livestock, fruits, vegetables and spices in a pilot phase of the Africa Continental Free Trade Area agreement (AfCTA) and whose findings will be tabled at the AU Summit next year.

The regions’ team leader in the AfCFTA negotiations Damas Haule says the countries’ offer also includes fish, medicines, fertiliser, paper and industrial chemicals. Energy products such as cooking gas, bicycle and motorcycle tyres, and machinery for construction and farming have also been included.

The three countries were selected in June to start trading under the pilot phase whose final details will be thrashed out before a formal roll-out in the final quarter of this year.

The AfCFTA programme was to take off in January 2021 under a formal declaration by heads of state, but for disagreements over some key issues, especially the appendix on product originality criteria.

Leaders in February agreed to implement a transitional period for countries that have already submitted proposals under the agreement using already finalise product origin criteria.

Other countries selected for the pilot phase are Egypt, Ghana, Cameroun and Mauritius. They were announced at an AfCFTA Council of Ministers meeting in Accra on July 25 and will participate in the AfCFTA Initiative on Guided Trade that seeks to test the environmental, legal and trade policy basis for intra-Africa trade under the agreement.

Lists of products
Mr Haule said all seven countries have submitted lists of products from the group A category, which comprises 90 percent of products to be exempted from customs duty over a period of five years for developing countries and 10 years for least developed countries (LDC).

Group B will cover seven percent of “sensitive" products that will be exempted from customs duty for 10 years for developing countries and 13 years for LDCs after an initial five-year transition period, while Group C will comprise three percent of products in an "exclusion list" that will not be exempted from customs duty.

"In general, 97 percent of goods and products will be listed for removal of customs duties step-by-step and in a specific order,” Mr Haule explained. “Negotiations are continuing over the list of products to be placed in groups B and C and the criteria for verifying the originality of sugar and tobacco products, clothes and motor vehicles,” he added.

The AfCFTA pact covers a continental population of 1.3 billion with a revenue potential of at least $3.4 trillion. By February it had been assented by 43 countries.

But under the 'Principle of Acquis' outlined in the main agreement document, countries that share membership in other trading blocs within the continent will not be allowed to trade under AfCFTA. This means that Tanzania, Kenya and Rwanda will have to stick to doing business bilaterally via EAC trade protocols during the pilot phase period.

Kenya also cannot conduct AfCFTA business with Egypt or Mauritius as they are fellow members of the Common Market for Eastern and Southern Africa. But under AfCFTA, countries that are implementing joint Custom Unions agreements in other blocs are required to prepare joint tariff offers to avoid disrupting the procedures set out in the continental pact.

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