Ethiopia: AU makes major strides to eliminate cross-border barriers to trade

Addis Ababa, Ethiopia (PANA) – The African Union (AU) is set to finalise the Continental Free Trade Area (CFTA) negotiations, aiming to create a single and integrated market for goods and services by the deadline of December 2017, AU Commissioner for Trade, Albert Muchanga, announced Thursday.

“We are confident that by the end of this year, we shall have an integrated and commercially viable market space,” Muchanga told reporters in Addis Ababa, Ethiopia, as the African ministers of foreign affairs, trade and industry and senior state officials prepared to attend the opening of the ministerial segment of the 29th AU Heads of State and Government Assembly, better known as the AU Summit.

The completion of the negotiations for the formation of the AU Continental Free Trade Area in December would open up the continent for the free movement of goods across borders.

Muchanga said the next phase of the negotiations would focus on other trade rules such as the competition rules, investment and the intellectual property rights.

The CFTA would be established once the countries sign a trade agreement that would be concluded by the AU members within the framework of Abuja Treaty Establishing the African Economic Community.

The AU is eying the creation of a single economic bloc with a combined economic strength of US$3 trillion. The CTFTA would enable the continental organisation to create a market for goods and services in 55 countries, rather than the fragmented units.

According to the AU Commission, the expanded market would lead to a 52% increase in the trade amongst African countries by 2022 and a 6% rise in the African exports to the rest of the world.

African economists argue that the African producers of raw materials and goods have been unable to create an impact on the world export markets despite being the major producers because they lack the coordination and sophistication that would make their exports have an impact on world prices.

The desired economic impact would be created when producers coordinate the release of their produce and effectively manage the market booms and downward trends.

The AU believes that with the launching of the CFTA, the organisation would be able to effectively remove taxes and other charges that affect trade in agricultural goods traded in Africa.

It would also limit and eventually remove the non-tax barriers as well as enhance the flow of goods and services across most countries.

“We are working on the establishment of the Continental Free Trade Area against a background where Africa faces the challenges of massive unemployment, under-employment, poverty and climate change,” Muchanga told a news conference here.

Trade amongst African countries stands at 14%. The AU hopes this would double by 2021 to 28%.

The AU experts providing facilitation to the negotiators believe the uneven economic development within Africa could become a major barrier to the achievement of the CFTA.
-0- PANA AO/VAO 30June2017

30 june 2017 12:44:28

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