Tag Archives: EAC

Africa’s Free Trade Agreement: An empty gesture, or the next step in South Africa’s neo-colonisation of Africa?

(Courtesy of Yahoo News)

I got very excited when I read the headlines. “Africa signs deal for Free Trade Area”. “Free Trade Area Treaty Signed”. “Free Trade Deal to Boost Trade, Investment in Africa.”

The terms of the “deal” were even more exciting. Three of Africa’s largest and most efficient trading blocs (SADC, COMESA and the EAC), comprising 26 countries, more than half a billion people, and a little shy of a combined GDP of a trillion dollars (US, not Zimbabwean), were to merge, eliminating tariffs, quotas and preferences on goods traded between them.

This would be a huge step in the economic development of Africa. Trade within Africa is notoriously low (only about 10% of Africa’s trade is with itself, as compared to 60% in Europe), and beset with all sorts of difficulties – most notably high tariffs on goods and very poor infrastructure.  By removing some of these obstacles, it makes it easier to trade, encouraging the development of a manufacturing sector and creating jobs.

But read the fine print, and its becomes clear that the agreement is not to establish a Free Trade Area but merely to talk about establishing a Free Trade Area. It is an agreement to negotiate, and South Africa’s Trade Minister Rob Davies doesn’t expect any progress for three years, saying that even though the heads of state “thought an inordinate amount of time was needed to do this, they still allocated 36 months to do so.”

The negotiations are being spearheaded by South Africa – the agreement was signed in Johannesburg and presided over by Jacob Zuma. While a Free Trade Area is hugely important for Africa’s development, the rest of the continent needs to be wary that South Africa doesn’t use its huge clout to create provisions that favour its own development rather than Africa’s. After all, South Africa has the most to gain with any free trade agreement because it’s able to take immediate advantage. I have a horrible suspicion that if substantive negotiations take place, and a real agreement signed, it will represent of triumph of South Africa’s neo-colonial foreign policy (the policy that is filling the continent with Shoprites and Nandos the way America filled with world with McDonalds and Coca-Cola) rather than a a genuine attempt at African economic reform. Not that the two are necessarily mutually exclusive. And, I’d take Nandos over McDonalds every day of the week.

It will be interesting to see if there will be parallel negotiations on free movement of people, a much more delicate topic, and something South Africa, with its domestic problems around xenophobia, will be less in favour of.

VERDICT: The African Free Trade Area goes forth. As a first step, this is encouraging; however, until we hear something more concrete it remains mere PR.

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