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How the AfCFTA can support cleaner, greener and more resilient value chains

Expert comment

Written by Jodie Keane

Image credit:Simon Davis/Department for International Development Image license:CC BY 2.0

As evident through a review of several African recovery strategies (Ghana, Kenya, Mozambique, Nigeria, Rwanda, South Africa) undertaken in conjunction with the African Trade Policy Centre and the African Center for Economic Transformation, there are goals to boost cleaner, greener and more resilient value chains. However, to achieve these goals trade and investment policies require more detail, including potentially in relation to the African Continental Free Trade Agreement (AfCFTA). Over time, the AfCFTA has the potential to transform Africa’s production and trade structures.

Looking ahead, a crucial question is how the AfCFTA will go beyond World Trade Organization (WTO) commitments, rather than simply reinforcing existing ones, and whether these additional commitments relate to a greener and more resilient recovery.

We highlight areas in which the ambition of the AfCFTA could be raised so that it is both in line with green recovery strategies and can better support proposed climate change adaptation and mitigation objectives. This includes both in relation to Phase One provisions on trade in goods and services as well as looking ahead to future negotiations, on digital and intellectual property. To date, environmental and climate considerations have not featured prominently in the development of the AfCFTA. Nevertheless, there is scope for the provisions of the agreement to support African resilient recovery objectives.

More emphasis on environmental goods and services

First, regarding Phase One provisions on trade in goods and services, there is a need for greater emphasis on environmental goods and services (EGS’s) within AfCFTA schedules to ensure these do not feature within sensitive lists. The AfCFTA could define its own list of EGS’s. There could also be greater consideration of rules of origin linked to EGS’s to support cumulation with third-party countries, in order to stimulate cleaner and greener intra-African value chains.

Secure e-commerce at the continental level

Second, regarding future negotiations such as on digital trade – which underpins both modern manufacturing and the development of climate smart agriculture – there is an important opportunity to secure agreement on e-commerce at the continental level. This can help to facilitate resilient recovery objectives, support data flows and cross-border trade. Intellectual property development, often closely connected to digital trade, must be supported by relevant provisions within future AfCFTA negotiations to support innovation.

Understand developments in African producers’ end markets

Finally, it must be understood that the shift towards cleaner and greener value chains is also being driven by developments in African producers’ end markets. A case in point relates to recent drives by the EU and UK to ensure products from deforested land do not enter supply chains. Enhanced due diligence has implications for the environmental regulatory frameworks that govern trade, including for African countries.

Could the inclusion of a dedicated chapter on trade and sustainability within the AfCFTA also assist African producers in adapting to these trends? Possibly – but its ability to do so will depend on enforcement (which is often lacking). The formulation of an African position on trade and environmental sustainability and climate change within the AfCFTA could strengthen negotiating positions, both with third-party countries and at the multilateral level, as momentum on addressing these issues grows. If you would like to learn more, please watch this recent presentation of the overall report.