Members welcome AfCFTA’s role in fostering economic growth and development in LDCs
WTO members discussed the potential of the African Continental Free Trade Area (AfCFTA) in supporting economic growth and development in least-developed countries at a meeting of the Sub-Committee on Least-Developed Countries (LDCs) on 20 October. In addition to Djibouti and Togo’s experiences with the AfCFTA, the Sub-Committee also heard about trade initiatives by members and partner organizations to help LDCs become more active in regional and global trade.
“Africa is home to 1.3 billion people, and many of them live in LDCs. Still, the continental share in global trade remains below 3 %,” said Ambassador Kirsti Kauppi of Finland, chair of the Sub-Committee, which provides a forum to share experience on topics of interests to LDCs.
“The AfCFTA can help generate value addition on the continent with all the benefits that it would bring in terms of economic diversification, higher income and better jobs”, said Ambassador Eheth Salomon of Cameroon, coordinator of the WTO African Group. “It is imperative that every step of AfCFTA implementation is supported with robust investments in productive capacity, especially in LDCs,” he said.
Highlighting the importance of national strategies to implement the AfCFTA negotiated outcomes, the Secretary-general of Djibouti’s Ministry of Trade and Tourism, Ali Daoud Abdou, said: “Djibouti already submitted its schedule of commitments covering transport, communication, tourism and professional services. With the AfCFTA implementation, Djibouti intends to further strengthen its position in regional value chains.”
The Director-general of Togo’s Ministry of Trade, Industry and Local Consumption, Abé Talime, said: “Togo has prepared its schedule of tariff concessions, drafted the list of specific commitments in five priority services sectors and validated the mapping of non-tariff measures. This will help to fully benefit from the opportunities of the continental market.”
The European Union noted that EUR 150 billion are being mobilized through the Global Gateway and the EU–Africa Investment Package. Support to implement the AfCFTA has also been provided as part of the European Union’s Team Europe Initiative. The objectives are to boost intra-African trade, develop opportunities that the green and digital transition bring, and deepen sustainable economic transformation in Africa. Several initiatives by the EU included development of the AfCFTA e-Tariff Book and the African Trade Observatory. Aid, investment and policy support were highlighted as important to help realize the potential of the AfCFTA.
The United States Agency for International Development (USAID) talked about the Africa Trade and Investment programme, which aims to support Africa’s trade priorities, including intra-African trade. USAID is also engaged in initiatives to strengthen private sector engagement, provide information on the outcomes of the AfCFTA negotiations on women-owned businesses in Africa, and help fertilizer businesses prepare for full implementation of the AfCFTA. Support given through US trade preference programmes, including the African Growth and Opportunity Act, was also mentioned.
Sharing lessons learned, the CEO of TradeMark East Africa, David Beer, said: “AfCFTA has the ability to drive a major change in intra-African trading relationships.” He added: “Digitisation is the next frontier for smoothing continent-wide trade, and that’s why tools such as a harmonized approach to rules of origin, integrated customs management systems, electronic single windows, trade portals and electronic cargo tracking systems are proving so successful.”
“All these efforts are central to supporting greater integration of LDCs in trade flows – both regional and global.” said Ambassador Kauppi. She noted that the LDC share of world exports has remained unchanged at 0.93 % over the past two years.
Ambassador Kadra Hassan of Djibouti, coordinator of the WTO LDC Group, updated members on the Group’s recent activities, including its engagement in the discussions on LDC graduation. “The WTO needs to be an effective institution which responds to the needs of its members, especially the most vulnerable”, said Ambassador Hassan.
The chair announced a new webpage that showcases LDC success stories in leveraging trade to improve people’s lives. The release of the 2022 note entitled “Market Access for Products and Services of Export Interest to Least-Developed Countries” was also announced. The note is available here.
More information on the Sub-Committee on LDCs can be found here.
The World Trade Organization (WTO) deals with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.