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Reaping the AfCFTA Potential Through Well-Functioning Rules of Origin

Author

Listed:
  • Komi Tsowou

    (United Nations Conference on Trade and Development)

  • Junior Davis

    (United Nations Conference on Trade and Development)

Abstract

The African Continental Free Trade Area (AfCFTA) Rules of Origin (RoOs) determine the conditions for the application of the Agreement’s tariff preferences. The effectiveness of existing preferential trade agreements within the continent is undermined by heterogeneous RoO regimes and costly trade facilitation procedures. If these issues continue unchecked, they could harm the realization of AfCFTA ambitions. Here, we first discuss the economics of preferential RoOs, highlighting their associated benefits and costs within and beyond the African context. Second, we focus on the implementation of RoOs under the AfCFTA. We contend that cost-effective implementation is crucial to the AfCFTA RoO regime for production hubs to benefit from integrated African markets. Capacity building, the adoption of new technologies, and the establishment of effective institutional mechanisms will be important to track progress on RoO implementation and ensure high preference-utilization rates under the AfCFTA. These efforts shall be complemented by targeted support to the least developed countries and to small and medium enterprises. Finally, we recommend a set of actions to ensure the impartial, transparent, predictable, consistent, and cost-effective implementation of the AfCFTA RoOs.

Suggested Citation

  • Komi Tsowou & Junior Davis, 2021. "Reaping the AfCFTA Potential Through Well-Functioning Rules of Origin," Journal of African Trade, Springer, vol. 8(2), pages 88-102, December.
    • Handle: RePEc:spr:jouafr:v:8:y:2021:i:2:d:10.2991_jat.k.210428.001
    DOI: 10.2991/jat.k.210428.001
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    References listed on IDEAS

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    1. Paola Conconi & Manuel García-Santana & Laura Puccio & Roberto Venturini, 2018. "From Final Goods to Inputs: The Protectionist Effect of Rules of Origin," American Economic Review, American Economic Association, vol. 108(8), pages 2335-2365, August.
    2. Cadot, Olivier & Estevadeordal, Antoni & Suwa-Eisenmann, Akiko & Verdier, Thierry (ed.), 2006. "The Origin of Goods: Rules of Origin in Regional Trade Agreements," OUP Catalogue, Oxford University Press, number 9780199290482, Decembrie.
    3. Mizuno, Tomomichi & Takauchi, Kazuhiro, 2013. "Rules of origin and uncertain cost of compliance," MPRA Paper 44431, University Library of Munich, Germany.
    4. Jaime de Melo & Alberto Portugal-Perez, 2014. "Preferential Market Access Design: Evidence and Lessons from African Apparel Exports to the United States and the European Union," The World Bank Economic Review, World Bank, vol. 28(1), pages 74-98.
    5. Sangkyom Kim & Innwon Park & Soonchan Park, 2013. "Trade-creating regime-wide rules of origin: a quantitative analysis," Applied Economics Letters, Taylor & Francis Journals, vol. 20(11), pages 1056-1061, July.
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    Cited by:

    1. Hippolyte Fofack & Andrew Mold, 2021. "The AfCFTA and African Trade—An Introduction to the Special Issue," Journal of African Trade, Springer, vol. 8(2), pages 1-11, December.

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