AfCFTA secretariat opening: GUTA raise red flag; demands clear ‘rules of origin’
A section of the Ghanaian business community, Ghana Union of Traders Association (GUTA), is raising concerns about the failure of member states of the African Union (AU) to agree on a key issue of engagement as ‘rules of origin’, even as the commencement date for the continental single market fast approaches.
According to the Association, this is needed to 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).
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. Trade experts have already predicted that, 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.
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. The AfCFTA Secretariat, which was inaugurated recently, 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.
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 said 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.
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.
Consequently, the Ghana National Chamber of Commerce and Industry (GNCCI) has advised Ghanaian businesses to take advantage of Ghana’s hosting of the African Continental Free Trade Area (AfCFTA) secretariat to become competitive.
Nana Dr. Appiagyei Dankawoso I, President, GNCCI, said this when he was accompanied by executive members of the Chamber from Accra and Tema on a business visit to Zonda Tec Assembling plant in Tema.
He said the AfCFTA secretariat provided a bigger platform for Ghanaian businesses to thrive.
Nana Dankawoso asked Ghanaian entrepreneurs to take advantage of government policies including long term funding from the EXIM Bank to expand their businesses.
He encouraged them to add value to their produce as well as build capacity to enable Africa move from importation to exportation through industrialization which would lead to job creation and better livelihood for the people.
He said the Chamber would serve as a link between the private sector and the government to enable members to strategize and engage policy makers on how best to benefit from AfCFTA.