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African Organisation for Standardisation

The AfCFTA, the Benefits, the TBTs Challenges, the Opportunities and the role of ARSO.

Due to their Mandate and Influence on the establishment of the Legal and Institutional Framework for Regulatory Compliance, Quality Governance Institutions in Africa, like ARSO, PAQI Institutions, RECs SQAM, and the National Bureau of Standards have a decisive influence on the question “to what degree Technical Barriers to Trade presents a stepping stone or rather a stumbling block towards the implementation of a African Continental Free Trade Area?

 The AfCFTA Benefits

The news, therefore, that, at the AU Head of States Extraordinary Summit on 21st March 2018 in Kigali, Rwanda, 44 heads of delegation ratified the land mark African Continental Free Trade Area (AfCFTA) treaty, and that, 27 leaders signed the second protocol establishing the African economic Community relating to the free movement of people, the right of residence in the signatory countries and right of establishment ,  in addition to 43 Heads of delegations signing the third protocol dubbed the “Kigali Declaration” to formally launch the AfCFTA, were truly the best for Africa’s Integration Agenda.

 

The African Continental Free Trade Agreement, is lauded, as probably the biggest trade agreement since the establishment of the World Trade Organisation (WTO), and a concrete, provable culmination of the goals of African Renaissance and Afro-optimism.  The optimism about the TFTA and CFTA is presumably a sign that, in Africa, there is support for a new generation of intra-African trade agreements and a belief that the TFTA and CFTA fall in this category.  The public debate about what the Tripartite Free Trade Area (TFTA) and the Continental Free Trade Area (CFTA) will bring about portrays an optimistic picture. Many commentators claim that these agreements will bring significant benefits to millions of consumers and a marked reduction in poverty in many countries. The United Nations Economic Commission for Africa (UNECA) predicts that the AfCFTA, which is prioritizing the production of value-added goods and services that are “Made in Africa”, has the potential to increase intra-African trade by 52.3% by eliminating import duties, and to double this trade if non-tariff barriers, especially the Technical Barriers to Trade  (TBTS) are also reduced (UNECA 2018).

As the largest single free Trade area in the world, a computable general equilibrium (CGE) analysis by Cheong, Jansen and Peters (2013) estimates that the CFTA could stimulate intra-African trade by up to USD 35 billion per year, or 52% (above the baseline) by 2022. It could also lead to a USD 10 billion decrease in imports from outside the continent, while boosting agriculture and industrial exports by up to USD 4 billion (7%) and USD 21 billion (5%) respectively. The continent’s gross domestic product will rise from USD 1.7 trillion (2010) to USD 2.6 trillion (2020) pushing up consumer spending from USD 860 billion (2010) to USD 1.4 trillion (2020) and thus potentially lifting millions out of poverty (McKinsey Global Institute, 2010).

Experts (Mevel, Simon and Karingi, Stephen – 2012, Dr. Mukhisa Kituyi – 2016, Henri J. Nkuepo, 2012) highlight the fact that the AfCFTA is poised to contribute significantly to increased competitiveness of Africa’s industrial products through harnessing the economies of scale of a large continental market; increased rate of diversification and transformation of Africa’s economy and better integration of the continent into the global economy.

 

The TBT Challenges

With the emphasis of Quality and compliant to standards Requirements, as a major determinant of trade in a Free Trade Area, Experts, leaders and policy makers already anticipate that, under AfCFTA, African countries will continue to be confronted with the main TBT issues given the fact that under the TBT Annex 6, article 3:  “the State Parties reaffirm their rights and obligations under the WTO TBT Agreement in respect of the preparation, adoption, and application of standards, technical regulations, conformity assessment procedures and related activities”.

 

This means that the challenge of mandatory regulations set by governments to meet their objectives regarding health, safety, and the environment, and for market-driven standards, set within the private sector, will continue (John Keyser 2012 – Policy Note no. 33, July 2012, www.worldbank.org/afr/trade). Based on this article, to successfully access the African Common Market, under the AfCFTA, or meet local technical regulatory requirements, including those intended to protect human, animal or plant life and health from imported pests and diseases:

  • Governments will introduce more and more regulatory requirements to address inter-lia health, safety or environmental issues in accordance with the WTO TBT Agreement and the rights and obligation of members
  • Consumers will demand safety and quality assurance
  • Private and public authorities will continue to scrutinise imported/exported goods for compliance
  • Producers increasingly will need reputable evidence that their products and services meet regulatory, technical and other requirements.
  • African countries, would be confronted with the main challenge of the need to improve the quality of regulation to remove the NTMs (TBTs) in goods, and to deliver competitive markets, while achieving essential public policy objectives relating to issues such as health and safety, and protection of agriculture from pests and disease;

 

Documented threat of TBTS to intra-African Trade and to the AfCFTA

That African countries, due to the challenge of the TBTs, do not trade much with each other, the TBT issue has remained an issue of interest and focus for scholars, leaders and development partners in Africa:

  • The Panel (African Progress report 2014) reports that in the SADC region, NTBs are seen as the most significant constraint on the growth of intra-SADC trade (AECOM 2011).
  • A World Bank (2011) study finds that notified NTBs affect products accounting for 20% of regional trade. Between 2000 and 2010, the total number of NTBs in Zambia, Malawi and Mozambique increased from 400 to over 1,400 (Kalaba 2012).
  • In the ECOWAS region, Traders travelling from Ghana to Nigeria are reported as having to pay 40 different fees Keyser (2012).
  • The World Food Programme, which is the largest purchaser of food in West Africa, has reported frequent problems obtaining export permits, quality certificates and other documents from different countries in order to process transactions (Keyser 2012).
  • In the EAC, region, on one estimate, eliminating NTBs in maize trade between Kenya, Tanzania and Uganda would generate benefits of US$5 billion (Africa Progress Report 2014).
  • World Bank (2012) underlines the magnitude of the problem. Food producing companies in Kenya can export to developed markets in Japan, Europe, and Singapore, which each have strict regulations, yet are unable to export to countries on the continent because of regulations. For example, the allowable moisture content for imports of maize is set at 13 percent in Tanzania, 13.5 percent in Kenya, and 14 percent in Uganda. The tolerance for insect damage is one percent in Uganda, two percent in Kenya, and three percent in Tanzania.15 Malawi requires that maize should meet the following requirements: maximum of 14 percent moisture content, maximum of 2.6 percent of foreign matter, maximum of 11.5 percent of broken grains, and aflatoxin of 3ug per kilogram.
  • Among key trading corridors between Burkina Faso, Ghana and Benin, the cost of obtaining an SPS certificate for maize has been calculated at US$40/ton, equivalent to nine percent of the farm gate price (USAID 2011).

 

So, unless the AfCFTA is shaped as a comprehensive legal framework suitable for the 21st century challenges, including reducing Technical Barriers to Trade (TBTs) – Standards, technical regulations and Conformity assessment regimes), which have been long standing challenges to Africa’s integration, given the different trade policy Challenges among the RECs and African countries, the trade benefits of the AfCFTA, will remain hard to achieve.

The AfCFTA Opportunities to address the TBTs

It is important to underline that the elimination of tariff and non-tariff barriers, and Regulatory compliance, called for by the ACFTA initiative offers African countries a great long-term opportunity to address the TBTs issues:, for example:

  • The AfCFTA binds all State parties to commit to the progressive elimination of tariffs and non-tariff barriers to trade in goods,
  • The TBT Annex, under Article 5: Fields of Cooperation, has provided that States Parties shall cooperate in the development and implementation of standards, technical regulations, conformity assessment procedures, accreditation, metrology, capacity building and enforcement activities in order to facilitate trade within the African Continental Free Trade Area (AfCFTA).
  • Further in Article 6.2 b, c, d and f respectively, calls on the State parties to adopt the harmonised African standards by ARSO and AFSEC.
  • This is aligned with the provisions of Article 8.1 of the SPS annex on Harmonisation where States Parties shall cooperate in the development and harmonisation of sanitary or phytosanitary measures based on international standards, guidelines and recommendations taking into account the harmonization of SPS measures at the regional level.

The Role of ARSO

There is therefore a corresponding drive to create a more robust, adaptive, cost-effective, user-friendly and sustainable quality infrastructure (QI) system that provides access to appropriate standardization, metrology, accreditation, conformity assessment, and market surveillance capability and capacity, along with attendant education and promotion programmes, and based on a Quality Policy. UNIDO (2018) in its document, QUALITY POLICY Guiding Principles Vienna, highlights the need for a Quality Policy as one of the basic cornerstones for ensuring good governance of the Quality Infrastructure, which is a combination of the policies, relevant legal and regulatory framework, and practices needed to support and enhance the quality, safety and environmental soundness of goods, services and processes.

 

Of importance therefore, to the AfCFTA Implementation,  are the ARSO Collaborative efforts in ensuring the harmonisation of African standards (through ARSO THCs) as a basis Technical Regulations; Conformity Assessment and Mutual Recognition Arrangements (ARSO COCO); Awareness creation and promotion of the Culture of Quality among policy makers, SMEs and Consumers on the benefits of standards (African Day (21st March) of Standardisation, African Quality Award); Standards and Trade Requirements Information dissemination and outreach (ARSO DISNET/African Trade Web portal); Capacity Building and Training (Education about standardisation, Workshop, Seminars). ARSO is also currently working with the African Union to fast-track the development of African Quality Policy.

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