AfCFTA : “next” or “last” generation Preferential Trade Agreement?

The economic debate on relationship between multilateralism and regionalism/bilateralism, points out how the most recent, so called “next generation”, Preferential Trade Agreements (PTAs) go much further than simply removing customs tariffs between member States, having much deeper objectives and covering many regulatory issues such as services, intellectual property rights protection, investment, and competition policy, among others (see Horn, H., Mavroidis, P. C. and Sapir, A. (2010) “Beyond the WTO? An Anatomy of EU and US Preferential Trade Agreements”, Volume 33, Issue11, November 2010). Because of these characteristics, next generation agreements are also known as “deep Agreements“, as they promote a deep level of integration that goes beyond trade.

Todd at al. also observe that nearly all recent “last generation” PTAs borrow most part of the language used from WTO agreements, a trend which is particularly evident in those countries which are most active in preferential agreement making (Todd Allee,  Manfred Elsig,  Andrew Lugg, “The Ties between the World Trade Organization and Preferential Trade Agreements: A Textual Analysis”, Journal of International Economic Law, Volume 20, Issue 2, June 2017).

In which category the AfCFTA falls within?

It is well known that the AfCFTA is not just an agreement eliminating customs tariffs between its member States.

As it is evident from Article 8 (Status of the Protocols, Annexes and Appendices), this Agreement is made up of many Protocols each of them covering very diverse policy areas: from Trade in Goods, Trade in Services, Investment, Intellectual Property Rights, Competition Policy, Rules and Procedures on the Settlement of Disputes. Most of such Protocols are however still under negotiation. Each Protocol, in turn, is divided into Annexes and Appendices which all together form an integral part of the AfCFTA. At the 33rd Ordinary Session of the Assembly of the African Union, held 9-10 February 2020, in Addis Ababa, Ethiopia, a decision was taken (Doc. Assembly/AU/4(XXXIII)) to develop an additional Protocol on e-commerce, once the negotiations for all the other Protocols will be completed. Complementary to the AfCFTA Agreement are the Protocol on Free Movement of Persons and the Decision[1] on the establishment of a Single African Air Transport Market (SAATM). The AfCFTA is therefore for sure a “next generation” PTA. 

Then, what about its qualification about as a “last generation” PTA? 

The International Trade Centre publication “A business guide to the African Continental Free Trade Area Agreement” makes a comparison between the Protocol on Trade in Goods and its 9 Annexes, with the WTO agreements, as well as the Protocol on trade in Services (and corresponding Annexes) with the General Agreement on Trade in Services (GATS), highlighting how the similarities between the AfCFTA text and the GATS/WTO texts are more than the differences. A rapid look to the Protocol on Trade in Goods, Annex 2 on Rules of Origin shows that these provisions are very similar to those contained in the WTO Agreement on Rules of Origin. Same happens for the Annex 6 (Technical Barriers to Trade), which basically reflects the provisions of the WTO Agreement on Technical Barriers to Trade (TBT), the Annex 7 on Sanitary and Phytosanitary Measures, whose content is equivalent to the WTO Agreement on the Application of Sanitary and Phytosanitary Measures, while for what concerns the Annex 3 (Customs Cooperation and Mutual Administrative Assistance), 4 (Trade Facilitation), 5 (Non-Tariff Barriers) and 8 (Transit), the relevant provisions are basically modeled upon the WTO Trade Facilitation Agreement. 

Then, what about its qualification about as a “last generation” PTA?

A look at the language used in the AfCFTA Agreement, with its relevant Protocols, Annexes and Appendices, clearly shows that this is largely borrowed from the WTO Agreements. Terms such as “National Treatment” (which is a basic principle of GATT/WTO that prohibits discrimination between imported and domestically produced goods with respect to internal taxation or other government regulation), “decision by consensus”, “Dispute Resolution Body” or “Panel”, and express reference in the art. 1 (Definitions) to the main WTO/GATT/GATS texts leave no doubt.

A more in-depth analysis of the AfCFTA Agreements easily shows that substantial parts of this Agreement are copied literally from a WTO agreement. Let’s look at the Annex 4 on Trade Facilitation of the AfCFTA Protocol on Trade in Goods for example, which exactly mirrors the WTO Trade Facilitation Agreement, but with some provisions aimed at making the obligations of parties less or more stringent than in the latter, like in the case of the use of the locution “to the extent possible” that accompanies some of the measures in this Annex, as shown in the example below. 

Annex 4 on Trade Facilitation of the AfCFTA Protocol on Trade in GoodsWTO Trade Facilitation Agreement
Art. 4 (Publication) 1. Each State Party shall, to the extent possible, promptly publish on the internet thefollowing information in a non-discriminatory and easily accessible manner in order toenable State Parties, traders, and other interested parties to become acquainted withthem:….. Art. 1 (Publication) 1. Each Member shall promptly publish the following information in a non-discriminatory and easily accessible manner in order to enable governments, traders, and other interested parties to become acquainted with them: 
Art. 20 (4). Each State Party shall, to the extent possible, accept paper or electronic copies of documents required for importation, exportation or transit of goods through its territory.Art. 10.2. (Acceptance of Copies)
1. Each Member shall, where appropriate, endeavour to accept paper or electronic copies of supporting documents required for import, export, or transit formalities.

In conclusion, the AfCFTA can be defined both a “next” and a “last” generation PTA, with the clarification that because of the above frictions with the WTO texts, maybe it is more “next” … than “last”.

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