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.