What does this mean for the continent and for US SMEs interested in trade opportunities with countries in Africa
The African Continental Free Trade Agreement (AfCFTA), is set to enter into force on 30 May 2019, given that half of the original signatory countries have completed ratification of the agreement.
The AfCFTA was first conceived by the 55 members of the African Union as a step towards an African free trade area to promote intra-African trade for sustainable economic development and integration into the global economy. The first round of AfCFTA negotiations was held in February 2016, and the final text was signed by 44 countries in Rwanda on 21 March 2018. Eight more countries have since signed the deal. Only 3 countries of the African Union (Benin, Eritrea, and Nigeria), have not yet signed on to the AfCFTA. With the ultimate aim of the single market, the AfCFTA paves the way for a continental wide customs union in the near future that integrates the many existing regional customs unions throughout Africa already in place.
On 30 September 2018, Canada, Mexico, and the US announced that they had reached an agreement on a modernized NAFTA just hours before a self-imposed 1 October deadline. The new agreement has been renamed the United States-Mexico-Canada Agreement (USMCA), otherwise known as NAFTA 2.0. While commentators have joked that the name is the only thing to have changed, there are several substantial alterations and additions, along with some notable omissions, that may impact the trade operations of US small- and medium-sized enterprises (SMEs) should the agreement pass and enter into force.
Last week, on February 22, the WTO Trade Facilitation Agreement entered into force. Originally signed in 2013 in Bali, and ratified by 113 countries so far, this was the greatest stride to establish common ground in trade since the creation of the WTO in 1994.