A South Africa-b a s e d international trade expert, who is also Executive Director of the Trade Law Centre, Trudi Hartzenberg, has said trading under the African Continental Free Trade Area (AfCFTA) may take longer than expected as the African Union (AU) is verifying tariff concessions submitted by countries.
This is despite operationalisation of the pact on January 1 this year.
It also follows the passing of the June 30 deadline for submitting the tariff concessions for AU member states.
In a response to an emailed questionnaire, Hartzenberg said, currently, no trade under the pact has taken place.
She said negotiating parties have to submit offers of tariff concessions that comply with the agreed modalities, and the offers have to be verified by the AfCFTA Secretariat.
Hartzenberg said the key challenge is that tariff concessions and rules of origin have to be negotiated in tandem while the rules of origin negotiations are still ongoing for products such as automotives and sugar, offers of tariff concessions are unlikely to be finalised by member states that have an interest in these areas.
“The deadline was set for 30 June to make offers of tariff concessions to liberalise tariffs on 90 percent of tariff lines. These are the non-sensitive products. Then for seven percent of tariff lines, that are designated sensitive by the negotiating party, a longer time frame for reducing tariffs to zero is permitted, and three percent of tariff lines may be excluded from liberalisation.
“…keep in mind that tariffs are still an important source of revenue for some countries, and they are also an effective means of protecting the domestic industry from import competition. Rules of origin are used to ensure the integrity of the free trade area but they can also be used to protect the domestic industry from import competition,” Hartzenberg said.
In a recent interview, Minister of Trade Sosten Gwengwe said some of the imports and exports earmarked between Malawi and South Sudan will be declared under the AfCFTA.
Last month, Malawi signed a deal worth over $150 million [about K120 billion] with South Sudan to supply maize, maize flour, sugar, rice and groundnuts to that country.
In return, Malawi will be importing petroleum and bitumen from South Sudan.