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ICLG > African Law & Business - News and Analysis > IBAVT: A unified approach to AfCFTA
IBAVT: A unified approach to AfCFTA
Published by: Andrew Mizner at 10/12/2020
Concerns about globalisation should not undermine the African Continental Free Trade Area, if there is a...
Concerns about globalisation should not undermine the African Continental Free Trade Area, if there is a unified approach to its implementation, said speakers at the IBA's annual conference.
The introduction of the African Continental Free Trade Area (AfCFTA) brings challenges, but those can be overcome to build a more competitive African economy, said speakers at a session of the The International Bar Association's Virtually Together (IBAVT) conference.
Chaired by Pieter Steyn of Werksmans Attorneys in South Africa, the session heard from lawyers in major economies about their concerns and solutions.
Yonov Frederick Agah of the World Trade Organization (WTO) said that "liberalising measures for trade" such as AfCFTA "should be used as tools for industrial policy", and that policy should be of connectivity across the continent "whether it is physical connectivity, or whether it is digital".
The poor transport links within Africa are a limitation, and he urged governments to "learn from what has happened in Asia, North America, Europe" and "create centres of excellence", which will make African countries competitive and integrated.
To achieve this requires political will to face down nationalistic and protectionist demands, said David Greene, president of The Law Society of England & Wales, who pointed to the origins of the European Union. "It is not unusual for populations within countries to be concerned when borders are opened," he continued.
George Etomi, of George Etomi & Partners in Lagos echoed this, saying: "You need to surrender some degree of your sovereignty."
Steyn acknowledged that signing AfCFTA was the start of a process, "the first mark on the canvas", rather than an end point and that the fear is that larger economies such as Nigeria, South Africa and Kenya will dominate the others. Similar concerns were raised within the EU, especially as it was evolving from an economic a political union.
For Agah, "this is the crux" – it is less about political commitment than the understanding that some groups are going to lose out from AfCFTA and will need support, if Africa's economy is to make progress. Etomi made the similar point that reciprocity between countries was important.
These concerns were emphasised by the fact that many of the continent's existing regional trade groupings have not fulfilled their potential, according to Etomi, who said that the best way to judge whether Africa is ready, is to judge what is already in place, noting that the Economic Community of West Africa States (ECOWAS) treaty should have produced free travel across its region already, but has not."Are we ready? We are not, but should we forge ahead? Yes," he said.
LEGAL STRENGTHS
The speakers were agreed on the importance of a strong African legal sector. Greene was keen to promote the success of England and Wales as a jurisdiction. He said services sectors are not usually addressed in free trade agreements, which focus on goods, as cross-border services are harder to define.
There is an imbalance between African law firms and their international counterparts, which have scooped up a lot of African legal talent, and which Etomi said was leading to the creation of pan-African firms to combine strengths and fight back.
There was a defence of AfCFTA from Agah and Etomi, who noted that free trade and globalisation are not mutually exclusive, but required risk mitigation in order to succeed.
The speakers agreed on the importance of a unified approach, with Greene saying African countries were "better together" working to achieve their huge potential.
Exchanging judges, improving international dispute resolution – particularly with the growth of arbitration, and the levels of representation within the legal sector were also considered.
The importance of the informal economy was stressed by Etomi and Agah, with a hope that AfCFTA will improve customs and immigration, allowing undocumented businesses to enter the formal economy, with Agah suggesting that an African business passport would make doing business smoother across the continent.
Above all, there was a call for unity. "If Africa is going to work, we must bring everybody" so we "have confidence" in an African Union, said Etomi. "We believe it will work and I look forward to that time when we can take the next steps now that Nigeria has ratified the treaty".
Despite the concerns, the group of lawyers were positive about the potential of the free trade area. Etomi said the legal and regulatory environment could create assurance. For Agah, implementation "remains a work in progress and we have to be progressively trying to improve it. This is not work for the government, this is the work for all stakeholders, whether private firms or manufacturing companies or single traders". Steyn agreed, concluding that it is "a work in progress" and that it is "up to all stakeholders to make it work".
Earlier in the conference, a panel discussed the work of African competition authorities during the Covid-19 pandemic.
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Law Society of England & Wales
IBAVT
Werksmans Attorneys
George Etomi & Partners
African Continental Free Trade Agreement
David Greene
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