Second African Trade Forum held in Addis

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Agriculture and natural resources are the starting points for regional value chains; their proper management continues to be a priority for Africa’s member States, stated Carlos Lopes, Under Secretary-General and Executive Secretary of the UNECA at the opening session of the second African Trade Forum that started on Monday September 24th, 2012 and ended on the 26th at the ECA.
The Forum with a call to “build on the political expression of support for the continental trade agenda and mobilize broad-based support for actualizing this vision”, held on to the theme Boosting intra-African trade and establishing the Continental Free Trade Area (CFTA) is aimed at looking into ways to enhance Africa’s productive capacities and improve industrial performance.
With respect to the establishment of the Continental Free Trade Area, participants agreed that although the CFTA agenda is government driven, it would require the participation of civil society actors, private sector, parliamentarians and development partners. Addressing Africa’s diverse trade constituencies including the private sector and policy makers, Carlos Lopes underscored the need to use trade as a means to upscale the current growth rate of 5.2 percent per annum.He offered the Association of Southeast Asian Nations (ASEAN) and the EU regions as examples of the potential of intra-regional trade zones that can move countries up the value chain. The two regions stand at 60pct and 70pct respectively in terms of recorded trade, while Africa’s recorded trade is 10pct according to studies.
Earlier in the week, Mr. Stephen Karingi, Director, Regional Integration and Trade Division at the ECA had underscored that doing well in trade facilitation, on top of removing existing trade barriers and tariffs, formal intra-African trade would increase from 11pct to around 22pct according to studies by the ECA.
Among the issues debated at the Forum are how to identify potential obstacles and determine the role of all constituencies in the continental trade agenda as well as discussions of the need for trade as a means to overcome vulnerabilities, utilize Africa’s untapped assets, reinforce its middle class and adapt to global trends.
“Africa, however, is not only about vulnerabilities,” said Carlos Lopes, highlighting its untapped resources from demographics, natural resources and agriculture. “Africa’s population is increasingly urban and the benefits of agglomeration, including increased domestic demand will work in tandem with internal trade to boost the creation of regional value chains.”
Participants at the forum agreed on the need to simplify trade regimes to facilitate cross-border trade undertaken by SMEs, and the establishment of projects to support the private sector in improving supply chain efficiency.
In the area of infrastructure for trade, member states were urged to allocate one percent of their GDP to fund national infrastructure projects, including rural infrastructure. “At the continental level, an African infrastructure fund would need to be established as a special purpose vehicle co-guaranteed by member states,” said participants
Later this year, Ministers of Trade will meet jointly with Ministers of Agriculture, on the theme of boosting intra-African trade with a sub-theme of addressing agricultural transformation and ensuring food and nutrition security.
Treasure Maphanga, AUC’s Director for Trade and Industry expressed her appreciation for the involvement of the private sector through the Pan African Chamber of Commerce and Industry and said the AUC would seek to translate the ATF decisions at the Joint Conference of Ministers of Trade and Ministers of Agriculture in October 2012.
Since the first Forum that was held in November 2011, two African Union Summits have tackled the need to boost intra-African trade, thereby establishing the highest level of political will for this agenda. The January 2012 AU Summit adopted a decision to establish the Continental Free Trade Area by 2017. The Summit also endorsed an Action Plan for Boosting intra-African trade and architecture aimed at supporting the implementation, monitoring and evaluation of the decisions.