The need to recalibrate the Africa trade facilitation legal framework to achieve an enduring intra-African trade

Abstract

It is necessary to improve on Africa poor and stagnated share of the global trade and to attract bigger share of the global investments funds to meet the growing developmental challenges. The bottlenecks at the borders of most countries have made Africa the continent with the highest cost of trade. This has worsened the competitiveness of the continent’s economy thereby imparting its ability to draw full benefits from the global trading system. The introduction of simpler trade procedures is expected to lower trade costs and boosts flows of goods among African countries and with the global community. It is imperative then to explore frameworks for innovative trade facilitating instruments within the ambits of the multilateral trading system to enhance intra-African trade. The idea is to evolve an Afrocentric framework that will not precipitate retaliatory measures from the trading partners. This study encourages African countries policy makers to avail themselves of the concessionary provisions in the WTO agreement to design a targeted trade facilitation framework. It is posited that an Afrocentric trade facilitation legal and regulatory policies are necessary to improve African countries capabilities to trade more with each other and with other countries at similar stage of development. This must be structured to specifically facilitate intra-Africa trade via the development of regional or sectoral competitive advantages rather than the multilateral trade facilitation protocols that is targeted to boost African trade with the international partners. A mega-regional trade agreement that will facilitate intra-African trade in the specific sectors and then use the bigger economies of scale to develop competitiveness on the global stage, is proposed. Based on the continent abundant agricultural and natural resources, and the huge and growing young populations, it is found that investments in value creating manufacturing industries in the agricultural, power and the transport sectors as well as the service sectors were found to hold the biggest potentials. This is necessary to generate large jobs and employment opportunities and diversify exports. In these sectors, region-owned companies in each sub-region to be complemented with private investors are being proposed. This is necessary due to the huge resources outlay and the poor margin that will not encourage private investors to commit into this sector. To protect the companies being proposed without precipitating retaliatory actions by the trading partners, Article XXIV, the Enabling Clause and the contingent trade protection measures as contained in Article XIX of the GATT Agreement (the safeguard measures and the subsidies and countervailing measures) were presented to be sufficient.