Making African Trade Work

HIGHLIGHTS

• read the article paying attention to the words in bold
• summarize the main ideas
• comment on the ideas expressed by the author
• compose 3 questions for discussion

FOCUS WORDS

precipitate	ускорять; усугублять
commitment	обязательство, приверженность; убеждения
underscore	подчеркивать, акцентировать
encompass	заключать, касаться
reconcile	согласовать, согласовывать, примирять
expedite	ускорять, содействовать
epitomize	воплощать, резюмировать
dispense	обходиться (без чего-л.)
contentious	спорный
blueprint	план, проект, программа

PREPOSITIONS

1. commitment to
2. respond to
3. regardless of 
4. envisioned in
5. account for
6. priority for
7. on average
8. compliance with 
9. gear up for
10. appeals for 
11. focus on
12. implication for 
13. incorporated into 
14. along with 
15. dispense with 

Making African Trade Work

May 11, 2018 Francis Mangeni

Francis Mangeni is Director of Trade, Customs, and Monetary Affairs at the Common Market for Eastern and Southern Africa (COMESA).

Africa, like other developing regions around the world, has persistently low levels of intraregional trade, owing to poor infrastructure and trade barriers maintained by the African Union’s 55 member states. The Continental Free Trade Agreement promises to change that, but only if African leaders can agree on the details.

KAMPALA – US President Donald Trump’s “America First” trade policies have triggered a global bout of tit-for-tat protectionism that could precipitate a meltdown of the international trading system. Against this backdrop of growing tensions involving the United States, China, the European Union, and other major economies, Africa may seem like a passive bystander. But looks can be deceiving.

At a conference on March 21 in Kigali, Rwanda, 44 African countries took a major step toward establishing a vast single market that promises to strengthen all of the continent’s economies. By signing on to the African Continental Free Trade Area (CFTA), African leaders have signaled their commitment to modernization within the postwar international system of rules-based trade. Some commentators were quick to respond to the CFTA agreement with the same old narrative about Africa, offering hackneyed arguments for why a free-trade area will never work. They paraded out the usual suspects: inadequate infrastructure, low levels of industrialization, the continent’s poor track record of implementing past agreements, the high cost of doing business, and endemic corruption.To be sure, it doesn’t help that Nigeria and South Africa – the continent’s two largest economies by far – have yet to join the CFTA. But at least Nigerian President Muhammadu Buhari and South African President Cyril Ramaphosa have not rushed, Trump-like, to condemn the agreement before knowing the facts. As the continent’s leading powers, they can afford to bide their time before signing on the dotted line. Other Africa experts have underscored the CFTA’s potential to advance existing efforts to develop the continent’s infrastructure, promote industrialization, and improve the regulatory and business environment. I place myself firmly in this camp. But, regardless of where one stands on the CFTA, a discussion of the role of intra-African trade – a crucial but often-neglected development strategy for the continent – is most welcome.

The Case for the CFTA

The CFTA might best be described as a necessary but insufficient component of Africa’s development agenda. Africa needs more robust continental, regional, and national programs to improve infrastructure and drive industrial, agricultural, and technological development, as envisioned in the United Nations Sustainable Development Goals for 2030. With or without the CFTA, African countries must expand digitization, build trade-information and market-intelligence systems, modernize and simplify customs procedures, and implement other trade-facilitation measures. Still, the need for a pan-African trade area is clear. Consider a startling statistic: hidden charges such as corruption, road blocks, and time-related costs arising from delays at border crossings account for 90% of total transportation costs on the continent, whereas freight and insurance account for just 1%. Moreover, Africa is divided among many national economies, most of which are host to smaller, fewer, and less sophisticated companies than in other parts of the world. Its level of technological development lags behind that of many other regions, and it suffers from market information and credit shortages. And a significant amount of intraregional trade that does occur goes unrecorded, owing to the continent’s large informal sector. All of this helps to explain why intra-African trade as a share of the continent’s total trade in 2016 was just 21.2%. The corresponding share in the European Union is 61.7%. Among the members of the North American Free Trade Agreement, the share is 50.3% , and it is 24.3% within the Association of Southeast Asian Nations. True, intra-African trade as a share of total trade is now higher than in other developing regions such as Mercosur (13.6%) in Latin America and CARICOM (9.7%) in the Caribbean. But this is largely owing to the COMESA-EAC-SADC Tripartite free-trade area, which accounts for 72% of intraregional trade, and encompasses most of the eastern half of the continent, from Egypt in the north to South Africa in the south. As it happens, Africa itself is the Tripartite region’s top export market.

First Steps

Now that the euphoria from the March conference is ebbing, it is time for negotiators from the signatory countries to see to unfinished business. The fundamental challenge is to ensure that the CFTA actually comes to fruition. Creating a well-functioning trade regime across so many countries requires tact, foresight, and sound management on the part of all those involved.

In July, African heads of state will meet in Mali, where they are expected to adopt annexes setting the terms for trade in goods and services. Establishing these rules and standards is a top priority for completing the CFTA; but it won’t come easy, considering the amount of legal scrubbing that will be needed to reconcile regulations across the continent.The annexes will cover everything from rules of origin to customs cooperation, trade facilitation, non-tariff barriers, technical and health standards, transit trade, trade remedies, and schedules for tariff concessions. In addition, there are three short annexes dealing with the working procedures of dispute-settlement panels, expert review, and a code of conduct for arbitrators and panelists. Should the legal experts fail to hash out all the details at the upcoming meetings, African ministers of justice and attorneys general (who are meeting separately in June) should take on the heavy lifting to see the process through. They must avoid the kind of caviling and hair-splitting that can cause meetings between just two lawyers – let alone dozens from 55 countries – to bog down. The approach should be that of a judge weighing competing interests, rather than a litigator representing just one. Beyond trade rules, African officials will also need to negotiate the opening up of national service sectors and the details of an integrated services market. Those talks are expected to produce regulatory frameworks and schedules for countries to meet specific commitments. This is a crucial area, because sectors such as transportation, logistics, tourism, communication, energy, finance, and business-to-business services account for more than half of national output across African countries, on average. These sectors will both facilitate intra-African trade and help the continent realize the benefits of globalization more generally. A related issue concerns tariffs on goods. The CFTA mandates liberalization of tariffs on 90% of products over a period of 5-10 years, with excluded and sensitive products together totaling around 600. Every country or customs union will be expected to produce a schedule of tariff concessions showing compliance with the liberalization agenda.

The Time Crunch

The negotiated schedules for both services and tariff concessions must be submitted by the January 2019 African Union Summit, which is now just over a half-year away. That is not much time, given the bean counting that goes into such negotiations. While national trade officials are gearing up for bilateral talks, appeals for a simple across-the-board tariff-reduction formula have gone unheeded. As a result, high-level political interventions will most likely be necessary to meet the deadline. National leaders must guide their ministries and step in as needed to resolve stubborn issues. And technical experts and policymakers must stay focused on analyzing excluded and sensitive products’ implications for intraregional trade and value chains, so that governments and industries can adapt accordingly.

Another immediate priority is to persuade 22 countries to ratify the CFTA agreement so that it can enter into force before the end of 2018. Ghana, Kenya, and Rwanda ratified the agreement within two months of signing it, and Ghana and Kenya deposited their instruments of ratification on May 10. But it is hard to say when the next 19 ratifications might arrive. To expedite the process, the AU Commission should dispatch emissaries to aid national leaders in securing ratification from their governments or legislatures. A final high-level priority is to kick off the second phase of the negotiations, which will focus on investment, competition policies, and intellectual property. Those talks need to be finalized, and their protocols submitted for adoption, by the time of the January 2020 AU Summit. The lessons from the first phase should come in handy for the second, assuming they are heeded. To that end, negotiators will need to build on existing regional economic communities, while also drawing on best practices from around the world. For example, the COMESA and EAC regions already have functional competition-policy regimes and institutions, which can serve as models for the CFTA. And South Africa already has serviceable investor guidelines that epitomize the continent’s development and sustainability goals. Moreover, Africa’s method of designating certain heads of state to champion specific continental programs has proved highly effective in mobilizing political will and technical expertise in the past. Rwandan President Paul Kagame has led efforts to reform the AU, and Nigerien President Mahamadou Issoufou has driven the CFTA project from the start. Now, similar roles might be assigned at the micro level to facilitate the process of formalizing individual annexes.

Streamlining the Process

Fortunately, the AU does not lack tactical or organizational capacity. At a particularly difficult recent meeting, two days of unproductive work led the experts in attendance to lay new procedural ground rules. Henceforth, statements were limited to two minutes, the number of permissible interventions on a specific issue was capped at five, and supporting statements after interventions were barred. If new proposals did not readily invite a consensus, discussions would revert back to the existing text. And mooted proposals were incorporated into an agenda for future meetings. These small measures allowed the chairperson to settle more concrete decisions, and effectively turned a failed meeting into a success. It is easy to see how such protocols could be built upon to accelerate the overall process. In the meetings to hash out the details of each annex, electronic voting should be used to determine which provisions are contentions and which are easily dispensed with. Delegates could then refer areas where there is no immediate consensus to the ministerial level, thereby ensuring that all annexes are at least subjected to technical review. Contentious and unresolved issues could then be revisited later, perhaps with instructions from the relevant governments. Moreover, chairpersons should limit the time spent on any given issue, based on the level of attention it demands. And they should consider designating individuals to spearhead sideline debates on particularly contentious provisions. This would afford delegations with strong views on an issue the opportunity to hold informal discussions on weekends or during breaks, making a breakthrough more likely. The AU commissioner for trade could also join these conversations, if for no other reason than to remind delegates of the political importance of reaching a consensus in light of the pressing deadlines ahead. The annex meetings should also allow for some flexibility at the level of the chairperson. Other members of a chair’s delegation should fill in to give the chair a break during particularly grueling sessions. An even better arrangement might involve rotating chairs. Having different personalities would help to avoid monotony, while ensuring a representational balance among the regions. More broadly, the process would benefit from better systems to introduce agenda items and to facilitate communications between delegates and national capitals. That, along with paperless document management and executive courses to acquaint all participants with the procedural rules, should ensure timely completion of the talks.

Toward a New Africa

Africa’s free-trade agenda started 2018 on a high note. But time is pressing, and policymakers will need to maintain the momentum if they are to meet looming deadlines. Though structural issues will remain high on the development agenda, the immediate priority is to finish the basic unfinished work needed to get the CFTA up and running. That will require quick thinking, compromise, and determination on the part of all signatories. Securing ratification from each member state will require gentle pressure on governments, so that the agreement can enter into force sooner rather than later. The phase-two negotiations can be expedited by drawing on global, regional, and national models that have already proved effective. And the annex discussions can be streamlined with a more efficient procedural framework. If all of this happens, Africa will take a giant step toward achieving continental economic integration. And in that case, the continent will be anything but a bystander in the global economy and its governance. There is thus a strong imperative to turn the CFTA blueprint into reality. Or, as Shakespeare’s Brutus observes in Julius Caesar: “There is a tide in the affairs of men

Which, taken at the flood, leads on to fortune;

Omitted, all the voyage of their life

Is bound in shallows and in miseries.”

DISCUSSION AND APPLICATION QUESTIONS

1. What are some of the trade barriers that have historically hindered intra-African trade?
2. How does the CFTA differ from previous attempts to promote regional integration in Africa?
3. What are some of the potential benefits and risks of the CFTA for African businesses and consumers?

LANGUAGE REVIEW

FLASHCARDS

SYNONYMS

MATCH THE WORD WITH ITS TRANSLATION

precipitate	согласовать, согласовывать, примирять
commitment	заключать, касаться
underscore	ускорять, содействовать
encompass	воплощать, резюмировать
reconcile	спорный
expedite	план, проект, программа
epitomize	ускорять; усугублять
dispense	обходиться (без чего-л.)
contentious	обязательство, приверженность; убеждения
blueprint	подчеркивать, акцентировать

MATCH THE WORD WITH ITS DEFINITION

precipitate	to include completely, comprehensively; to enclose; envelop
commitment	to speed up the progress of; perform promptly
underscore	to hasten the occurrence of; bring about prematurely, hastily, or suddenly
encompass	a detailed outline or plan of action
reconcile	causing, involving, or characterized by argument or controversy
expedite	to compose or settle (a quarrel, dispute, etc.); to bring into agreement
epitomize	to do without
dispense	a strong or firm belief shown by one’s actions; loyalty; a responsibility that takes up or occupies one’s time
contentious	to contain or represent in small compass; serve as a typical example of; typify
blueprint	to underline; to stress; consider as important

MATCH THE WORD WITH ITS SYNONYMS

precipitate	assist, promote, facilitate, advance, hasten
commitment	contain, comprise, incorporate, involve
underscore	argumentative, antagonistic, belligerent, hostile
encompass	accelerate, hurry, hasten
reconcile	design, master plan, scheme, strategy
expedite	resolve, harmonize, accommodate, balance
epitomize	to do away with; forgo
dispense	obligation, responsibility, dedication
contentious	outline, summarize, compress, exemplify, illustrate, model, represent, symbolize
blueprint	emphasize, accentuate, highlight

MATCH THE WORD WITH ITS COLLOCATIONS

precipitate	accounts, differences, divisions]
commitment	financial, time, political/ to the community, school, environment
underscore	issue, meeting, proposition, subject, discussion, figure
encompass	search, request, order]
reconcile	crisis, regime collapse, events
expedite	for action, change, success
epitomize	range, spectrum, variety, wealth]
dispense	moral virtue, the attitude, the future, vision
contentious	with formalities, the preliminaries, introductions
blueprint	issue, importance, idea]

COMPLETE THE SENTENCES BY FILLING IN  FOCUS WORDS

dispensed  commitment encompasses precipitated epitomize  underscore  reconcile  blueprint contentious  expedite

1. The status of Jerusalem remains one of the thorniest issues in the decadeslong conflict and has …………  numerous rounds of violence. 2. China announced the construction of a National Data Bureau, reflecting China’s …………  to data and artificial intelligence as fundamental drivers of its future economy. 3. Shortages of chips and other critical products in the pandemic helped …………  how reliant the country is on foreign factories. 4. Tesla Autopilot, the driver-assistance suite that …………  Full Self-Driving Beta, is facing multiple investigations from the National Highway Traffic Safety Administration. 5. Northern Ireland became one of the world’s most ambitious experiments in how to …………  a deeply divided society. 6. The Biden administration just announced the launch of Project Next Gen, which will devote more than $5 billion to help …………  ongoing scientific efforts. 7. For many Republicans, covid restrictions ………… their fear of government intrusion into private life. 8. Sweden, struggling with the backwash from a surge of immigration as well as tough economic prospects, has …………  with its center-left government. 9. In appointing another African American man to a senior Pentagon position, Mr. Biden may be setting up a …………  period on Capitol Hill. 10. Republicans, plagued by internal divisions, have so far been unable to coalesce the conference around a full budget ………… .

MATCH THE COLLOCATIONS FROM THE TEXT

1. modernize and simplify	a) component
2. compliance with	b) the process
3. meet	c) of tariff concessions
4. insufficient	d) for flexibility
5. acquaint with	e) digitization
6. implement	f) the procedural rules
7. allow	g) the liberalization agenda
8. to produce a schedule	h) customs procedures
9. accelerate	i) looming deadlines
10. expand	j) trade-facilitation measures

COMPOSE MEANINGFUL SENTENCES BASED ON FOCUS WORDS AND COLLOCATIONS FROM THE TEXT

E.g. _____________ expediting the return _____________

→ The Tunisian government committed itself to tightening its sea borders and combating human smuggling, as well as expediting the return of Tunisians who reside illegally in Europe.

1. _________ could precipitate a crisis _________
2. _________ go against existing commitments _________ 
3. _________ underscores the role _________
4. _________ encompassed a wide range of industries _________
5. _________ reconcile differences between _________
6. _________ expedite the solution _________
7. _________ epitomizes social divide _________
8. _________ dispense with regular checking _________
9. _________ contentious proposal _________
10. _________ provide a blueprint for _________

PREPOSITIONS

1. commitment ___
2. respond ___
3. regardless ___
4. envisioned ___
5. account ___
6. priority ___
7. ___ average
8. compliance ___
9. gear up ___
10. appeals ___
11. focus ___
12. implication ___
13. incorporated ___
14. along ___
15. dispense ___

GRAMMAR MIX

1. According to Cambodian officials, Myanmar’s military recently ……………. permission for ASEAN’s envoy to meet with other members of Suu Kyi’s National League for Democracy party.

1. has given
2. gave
3. was given
4. was giving

2. Iran subsequently ……………. its Additional Protocol with the International Atomic Energy Agency, a side-agreement that provided the nuclear watchdog’s inspectors with even more robust mechanisms to monitor every stage of Iran’s nuclear program than the agency’s standard oversight agreement.

1. has suspended
2. had suspended
3. suspended
4. would suspend

3. By 2006 the EU’s share ……………. in every Maghreb country except the Republic of Yemen.

1. fell
2. was falling
3. would have fallen
4. had fallen

4. Citizens of any GCC (The Gulf Cooperation Council) country ……………. from visa and work permit requirements when obtaining a job in another GCC country.

1. are exempting
2. have exempted
3. are exempted
4. exempt

5. If South Asian Association for Regional Cooperation (SAARC) ……………. for any reason (the friction between India and Pakistan or SAARC members’ reluctance to liberalize trade), inter-regionalism between ASEAN and SAARC is unlikely to happen.

1. will dysfunction
2. dysfunctions
3. is dysfunctioning
4. would dysfunction

6. Despite improvements, MENA is one of the ……………. globally and regionally integrated regions in the world.

1. least
2. less
3. far less
4. more less

7. In many respects, regional cooperation and integration ……………. as a stepping-stone to wider global market cooperation, with regional infrastructure investment and trade in goods, services, and factors within the region serving to boost competitiveness and encourage the development of the institutions necessary for integration on a wider scale.

1. must be understood
2. can be understood
3. would be understood
4. might be understood

8. Turning to the negotiations on the EU-Mercosur agreement ……………. have been going on for 24 years but are now in the home stretch, Lula criticized the EU’s environmental demands.

1. that
2. , which
3. which
4. when

9. ……………. regional service liberalization has begun in some countries (including Morocco, Jordan, and to some extent new WTO-acceding countries), the process lags behind in the region as a whole.

1. Since
2. While
3. As
4. However

10. Over the last two decades there has been steady progress towards more integrated regional economies in almost every part of the world. The levels of regional integration in Latin America, ……………. , are pale in comparison to those of other regions. 

1. although
2. yet
3. nevertheless
4. however

---

VOCABULARY NOTES

precipitate  ускорять; усугублять	definition to hasten the occurrence of; bring about prematurely, hastily, or suddenly synonyms accelerate, hurry, hasten collocations crisis, regime collapse, events
commitment  обязательство, приверженность; убеждения	definition a strong or firm belief shown by one’s actions; loyalty; a responsibility that takes up or occupies one’s time synonyms obligation, responsibility, dedication collocations a [financial, time, political] commitment [undying, complete, total] commitment (to) commitment to the [community, school, environment]
underscore   подчеркивать, акцентировать	definition to underline; to stress; consider as important synonyms emphasize, accentuate, highlight collocations underscore a [word, line, phrase, sentence] underscore the [issue, importance, idea] (of)
encompass заключать, касаться	definition to include completely, comprehensively; to enclose; envelop synonyms contain, comprise, incorporate, involve  collocations encompass a [range, spectrum, variety, wealth] (of) encompass a [wide, varied, considerable] [range] of
reconcile  согласовать, согласовывать, примирять	definition to compose or settle (a quarrel, dispute, etc.); to bring into agreement synonyms resolve, harmonize, accommodate, balance collocations reconcile [accounts, differences, divisions] reconciled with [her, the policy, the statements]
expedite  ускорять, содействовать	definition to speed up the progress of; perform promptly synonyms assist, promote, facilitate, advance, hasten  collocations expedite the [order, shipment, payment, approval, process, implementation] expedite your [search, request, order]
epitomize  воплощать, резюмировать	definition to contain or represent in small compass; serve as a typical example of; typify synonyms outline, summarize, compress, exemplify, illustrate, model, represent, symbolize collocations moral virtue, the attitude, the future, vision
dispense обходиться (без чего-л.)	definition to do without synonyms to do away with; forgo collocations dispense [completely, altogether] with           dispense with [formalities, the preliminaries, introductions]
contentious спорный	definition causing, involving, or characterized by argument or controversy synonyms           argumentative, antagonistic, belligerent, hostile collocations issue, meeting, proposition, subject, discussion, figure
blueprint  план, проект, программа	definition a detailed outline or plan of action synonyms           design, master plan, scheme, strategy collocations a blueprint for [action, change, success]