The United Nations on Monday hailed a landmark Africa-wide free trade area accord launched at the weekend as a bridge towards peace on the continent.
The long sought-after zone, which African leaders hope will become the world’s largest free trade zone by cutting trade tariffs and barriers between 1.2 billion people, was officially launched with much fanfare at an African Union (AU) summit on Sunday.
UN Deputy Secretary General Amina Mohammed said the the African Continental Free Trade Area (AfCFTA) was “integral” to “start building bridges for peace”.
“We have to find an alternative for the huge cohort of young people that we have the most of, who are the poor, the low-skilled. We owe them that,” she told AFP at the summit in Niger’s capital Niamey.
She added that the first continent-wide trade agreement, which was sealed after 17 years of tough negotiations, showed a region “on the move”.
“I think what’s really important now is to get that bridge from what we say to what we do,” she said.
At the two-day summit, African nations agreed to shared “rules of origin, the monitoring and elimination of non-tariff barriers, a unified digital payments system and an African trade observatory dashboard”, the AU commission said.
Nations committed to reduce tariffs on 90 percent of good and services, in an agreement that the AU estimates will give a 60-percent boost in intra-African trade by 2022.
African countries currently trade only about 16 percent of their goods and services among one another, compared to 65 percent with European countries.
State trade ministers have agreed the zone should be operational from July 2020.
‘Silence the weapons’
At the summit, host Niger and its fellow members in the G5-Sahel security pact — Chad, Mali, Burkina Faso and Mauritania — sought support for activating Chapter VII of the UN Charter to address rising threats from terror groups.
The move would help finance the G5-Sahel force, which is currently struggling to cope with jihadists in the region.
“They have to keep asking, it’s a legitimate request,” Mohammed said, adding that it “urgent” to end insecurity.
What are free trade agreements?
Free trade agreements are designed to cut trade tariffs between member countries.
Tariffs are a form of tax, like a border tax.
They are placed on goods coming into a country for a range of reasons, sometimes to try and protect a home-made product.
The purest free trade agreement (FTA) removes all border taxes or trade barriers on goods.
They get rid of quotas too, so there is no limit to the amount of trade you can do.
FTAs also help make a country’s exports cheaper and give easier entry to other markets.
They come in all sorts of forms and with different rules but in short, they make trade between countries as liberal as possible and allow for more rules-based competition.