The Ghana Union of Traders’ Associations (GUTA) is urging countries which have ratified the African Continental Free Trade Agreement (AfCFTA) to agree on crucial rules of origin as the commencement date for the continental single market fast approaches.
According to GUTA, this is necssary to avoid a recurrence of problems such as the ongoing trade tension between Ghanaian retail traders and foreign counterparts.
GUTA says continuous education will result in the removal of current trade barriers following commencement of the implementation of the Africa Continental Free Trade Area (AfCFTA).
Trigger for trade disputes
Over the years, some level of education has taken place to sensitise the trading public on how to take advantage of the opportunities that will avail themselves once the AfCFTA comes into operation.
However, many industry players are dissatisfied, notably those active in international commerce. They say that education on the application of trade barriers under the agreement, as specified in the AfCFTA’s Rules of Origin in the duty-free trading area – which will determine the eligibility or otherwise of goods to be traded – has not been done well enough to enable traders to be abreast of the tenets of the impending agreement.
They argue further that because this area remains relatively new to the business community, it is still possible that after the AfCFTA comes into effect at the start of next year tensions could arise between traders in member states.
Less than five months to the rescheduled date for AfCTA’s take-off – and almost two months after the original date for commencement – member states of the Free Trade Area still have not fully agreed the rules of origin. However, this is potentially the most explosive trigger for trade disputes between them.
Rules of origin are used to ensure that member states do not re-export products originating from countries outside the common market to other member states duty-free.
Raising the bar?
Critics of the free trade agreement say that if prudent rules of origin are not applied it is likely that countries outside Africa will try to use this strategy to gain duty-free access for their products in the continent, and particularly in its biggest markets – such as Nigeria, South Africa and Ghana.
Conversely, without fair rules of origin, more powerful trading nations could use the absence of regulation as an excuse to refuse duty-free access by other member states for goods they have genuinely originated.
The AfCFTA Secretariat, which was inaugurated on 17 August in Accra, is expected to apply the free trade agreement that will create a single market for the continent. It will be the single largest trading bloc created since the establishment of the World Trade Organization.
The 54 countries of Africa have a combined population of 1.2 billion and a total gross domestic product of roughly US$2.5 trillion.
However, despite this outstanding challenge, GUTA is hopeful that Ghanaian business owners are positioning themselves favourably to take advantage of opportunities offered by the AfCFTA, by identifying viable export markets and price-competitive sources of imports.
* Asaase Radio 99.5 – tune in or log on to broadcasts online.
#asaaseradio
#TVOL
