August 21, 2020

GUTA demands clear rules of origin for AfCTA

The Ghana Union of Traders Association (GUTA) is asking all key stakeholders in the pan African trade agreement to further educate the business community to ensure the success of the intra-African trade agreement which takes-off January 2021. The association is particularly concerned about the failure of member states to agree on crucial rules of origin, even as the commencement date for the continental single market fast approaches.

According to the Association, this is needed avoid a reoccurrence of issues such as the ongoing trade tension between Ghanaian retail traders and their foreign counterparts, while it insists that continuous education will result in the removal of current trade barriers following commencement of the implementation of the Africa Continental Free Trade Area (AfCFTA).

Over the years, some level of education has been held to sensitize the trading public on how to take advantage of the opportunities that will avail themselves once AfCFTA commences.

However, industry players, notably the international commerce community, have insisted that education on application of trade barriers under the agreement, as specified in AfCFTA’s Rules of Origin in the duty free trading area – which will determine the eligibility or otherwise of goods to be traded – has not been done adequately enough to enable the trading community to be abreast the relevant tenets of the impending agreement.

They further say that since this area still remains relatively new to the business community, it is still possible that post AfCFTA, there could be some tensions arising between traders in member states.

Instructively, less than five months to the rescheduled date for commencement of AfCTA – and almost two months after the original date for commencement – rules of origin have still not been fully agreed by the member states, despite the fact that this is potentially the most potent trigger for trade disputes them. Rules of origin are used to ensure that member states do not re-export products originating from countries outside of the common market to other member states duty free.

There is the likelihood that countries from outside Africa would try to use this strategy to gain duty free access for their products into the continents biggest markets in particular – such as Nigeria, South Africa and Ghana itself – if prudent rules of origin are not applied. Conversely, without fair rules of origin, such major national jurisdictions could use this as an excuse to refuse duty free access by other member states, for goods genuinely originating from them.

The AfCFTA Secretariat, which was inaugurated on Monday, is expected to apply the free trade agreement which will create a single market for the continent, having a combined population of 1.2 billion and a total Gross Domestic Product of about US$2.5 trillion.

The Association insists that despite this key outstanding challenge they are hopeful the Ghanaian business community is positioning favourably to take advantage of the opportunities in AfCFTA, by identifying viable export markets and price competitive sources of imports.

Source: goldstreetbusiness.com

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