Clearing agents and customs brokers will need to master the complexities behind the rules of origin governing cross-border trade under the African Continental Free Trade Area (AfCFTA).The AfCFTA rules of origin declaration form runs to 108 pages, including the list of products. Among the requirements is an understanding of manufacturing as well as of chemical reactions. For example, Rule 7 states: “Goods that undergo a change from one classification to another in the territory of one or more of the State Parties as a result of the separation of one or more Materials from a man-made mixture shall not be treated as originating unless the isolated material underwent a chemical reaction in the territory of one or more of the State Parties.”Dissolution in water or other solvents is not considered to be a chemical reaction. In January, AfCFTA member states agreed on the rules of origin, which had been one of the stumbling blocks regarding the rollout of the continent-wide free trade area.According to a media statement, the AfCFTA Council of Ministers has agreed on criteria to determine the origin of 87.7% of all continental tariff lines.There has been much debate about what constitutes a locally-made product, with the rules of origin determining the level of value addition to raw materials and semi-finished products that can be accepted as locally produced.Speaking at a media conference in Accra, Ghana after a January meeting of the AfCFTA Council of Ministers, the chairman of the council, Ebrahim Patel, said: “We took some ground-breaking decisions, which will now be conveyed to the heads of state at the Assembly of the African Union.“The most significant of them is that we have bid down key rules of origin that allow us to now state confidently that we have a package of products that we can start trading on.”There are now about 4 650 products for which there is agreement on rules of origin. The items include cheese, edible oil, fish and machinery. According to the Trade Law Centre (Tralac), AfCFTA follows a similar approach to that used in various regional economic community (REC) trade areas. Products only qualify where it can be demonstrated that they originated in one or more AfCFTA signatory countries.If a product includes materials from a non-AfCFTA country, then it has to be proven that the materials or products have been substantially improved as per the rules of origin declaration.“Broadly speaking, this approach requires that products are wholly produced in an AfCFTA State, or where non-originating inputs are used, that these are substantially transformed within the AfCFTA State Party (or Parties, under the cumulation provisions),” according to Tralac.
