AfCFTA creates new roles for industry

Clearing agents will not have to shut up shop if and when the much- hyped African Continental Free Trade Area agreement comes into full effect. Those who manage to keep up with the machinations of the politicians and bureaucrats will be needed to advise and guide traders for some time to come. The goal is for 97% of intra-African trade in goods meeting AfCFTA preferential origin criteria to be exempt from duties within the next decade. While reducing the demand for traditional customs clearing, the role of agents will change to advisers as tariff lines will be specific to each African country, with the agreement providing for a longer phase-out timeframe for least developed countries. Tariff elimination targets 90% of tariff lines (those deemed non- sensitive goods), with another 7% (sensitive goods) granted a more gradual phase-out schedule. The remaining 3% of tariff lines have been excluded. Goods may be subject to different preferential treatment in each country, as determined by the country’s schedule and the final provisions of the AfCFTA rules of origin. Conceived in 2012 by the African Union, trading under the AfCFTA began on January 1, 2021, but significant changes are needed for full implementation, states an International Monetary Fund (IMF) “note” issued by a team headed by Gilles Montagnat-Rentier. One of the stumbling blocks is that the rules of origin have not been completed for all goods. “This has been a highly complex process because each of the 54 signatory countries has its own interests and concerns, and each intends to have its particular phase- out timeline; in other words, its own tariff elimination start date for each tariff line. “Thus, this is still an ongoing negotiation process,” writes Montagnat-Rentier. It is important for customs agents to stay abreast of developments. “Making available current and reliable information on the rules of origin to customs administrations and traders is not only necessary but critical to AfCFTA implementation. “Without it, the agreement cannot be properly implemented. “Without a clear mandate at the national level, significant changes in border procedures, and realignment of resources and tools in most administrations, it is unlikely that the agreement will be implemented correctly. “Traders will likely continue facing costly procedures and inconsistent treatment throughout the continent, which may ultimately discourage them from taking advantage of the AfCFTA’s intended benefits,” the note warns. For guidance and preparation, the AfCFTA secretariat has published an e-tariff book and Rules of Origin (RoO) manual, which is incomplete due to the delays in the rollout. Companies wanting to trade within Africa should take note of the technical standardisation component of AfCFTA. The AfCFTA guide says countries must develop and promote the adoption of standards developed by the African Organisation for Standardisation and the African Electrotechnical Standardisation Commission. “National focal points must be identified to ensure that exporters and importers in member states are aware of the standards developed by these organisations. “Membership in additional regional and international standardisation organisations is also encouraged through the AfCFTA,” it states. ER