Unifying Markets

An agreement signed in Kigali, capital of Rwanda, has caught the world’s atten- tion. On March 21, a total of 44 African countries agreed to establish the African Continental Free Trade Area (AfCFTA), aimed at creating a single continental market for goods and services with free movement of businesses and investments. The agreement, signed at the 10th Extraordinary Session of the Assembly of the African Union (AU), will be submitted for ratifi cation by state parties in accordance with their domestic laws.

At the press conference held after the extraordinary session, Mahamadou Issoufou, President of Niger and champion of the AfCFTA, noted that owing to the good relations between Africa and China, the con- tinent can launch cooperation with China in this area.

The bilateral trade between China and Africa has seen rapid growth in recent years. China’s customs statistics show that China- Africa trade reached $170 billion in 2017. China has been Africa’s largest trade partner for eight years in a row since 2009. The Johannesburg Summit of the Forum on China-Africa Cooperation (FOCAC) held in late 2015 set out 10 China-Africa coopera- tion plans while China aims to increase the bilateral trade value to $400 billion by 2020. This means bilateral trade is set to more than double in the next two years.

In this context, China and African countries are facing historic opportunities in strengthening their trade relations, which can help improve integrated and globalized development on the continent. On the other hand, the trend of anti-globalization has emerged in the international community with rising trade protectionism. Thus, it is necessary for China to consider launching free trade agreement negotiations with African countries and regions.

Negotiation factor

It is of great significance for China and African countries and regions to sign free trade agreements through negotiations. First of all, this can help promote African integra- tion, encourage development of globalization and realize common prosperity for both China and the African Continent. In recent years, China has been supporting African in- tegration and promoting institutionalization of China-Africa trade for common prosper- ity. According to the second Africa policy paper issued by the Chinese Government in December 2015, “China will continue to support the development of the African Free Trade Zone and regional integration, and discuss the establishment of institutional- ized trade arrangements with countries and regional organizations in Africa.”

African integration is also a goal pur- sued by African countries in recent years. Fighting against corruption and promoting African integration were the two major themes of the 30th Ordinary Session of the AU Summit, which was held from January 22 to 29 in Addis Ababa, Ethiopia. The or- dinary session also noted that establishing AfCFTA, promoting the establishment of a single African air transport market, and the free movement of persons and goods are the three major measures for real- izing African integration. For this purpose, AU Commission Chairperson Moussa Faki Mahamat called for AU members to accel- erate free trade agreement negotiations so as to promote sustainable development of Africa.

Second, China reaching free trade agreements with African countries and regional organizations can help further enhance the African market and promote transformation and upgrade of China- Africa trade cooperation. Currently, China’s trade with African countries is all based on bilateral trade agreements, and China is yet to reach any comprehensive free trade agreements with any African country or re- gional organization. Free trade agreements between China and African countries and regional organizations can benefit both sides, helping Chinese products go into African markets and vice versa. Through in- stitutional trade arrangements, China-Africa trade will be more balanced, stable and healthy. There are many regional organiza- tions in Africa, such as the Southern African Development Community (SADC), the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA). All these organizations have their own trade and investment policies for their members and broader markets. If China could reach free trade agreements with these regional organizations, both sides could greatly broaden their markets. Third, reaching free trade agreements can help enhance China-Africa economic and trade relations and deepen cooperation between Africa and the rest of the world. The international community stresses the launching of investment and trade with African countries and regions through such economic and trade arrangements as free trade agreements. For instance, in recent years, the European Union (EU) launched a series of negotiations on economic partnership agreements with African re- gional organizations such as SADC, EAC, the Economic Community of West African States (ECOWAS) and the West African Economic and Monetary Union (UEMOA). The agree- ments signed by the EU and EAC and SADC went into effect in June and October 2016, respectively. The EU and 16 members of ECOWAS and UEMOA have reached con- sensus on the contents of the economic partnership agreement. The United States also signed similar agreements with some regional organizations in Africa. These agree- ments stipulated detailed arrangements on market access, trade and related issues. Similarly, China should also launch free trade agreements with African countries and or- ganizations so as to enhance cooperation between Africa and the rest of the world.

Unified market

Simultaneously, China can first choose some countries and regional organizations with sound economic conditions, promis- ing market potentials and strong regional influences to launch the negotiations. In November 2016, China and Mauritius an- nounced the launching of joint feasibility research on free trade negotiations, the fi rst joint feasibility research on a free trade agreement ever launched by China and an African country. In November 2017, the two countries signed a memorandum of understanding, to offi cially launch negotia- tions on a free trade agreement.

While negotiating free trade agree- ments, China and African countries could set detailed and feasible stipulations on trade in goods, especially in areas of mu- tual concern such as tariff reduction and exemption, customs procedures, trade facilitation, intellectual property and dis- pute settlements. This can promote China- Africa trade.

In terms of regional organizations in Africa, China could first consider launch- ing negotiations with the Southern Africa Customs Union, COMESA, ECOWAS and EAC. Currently, Africa is promoting a uni- fied African market by encouraging trade within the continent. China can also consider launching free trade negotiations with the upcoming COMESA-EAC-SADC Tripartite Free Trade Area (TFTA) and AfCFTA, so as to further expand China-Africa trade.

TFTA was agreed upon in June 2015 ac- cording to the free trade agreement signed by 26 heads of state and government in Africa. It will benefi t 1 billion African people through trade facilitation, attracting foreign capital and unifying quality and standards of products and services. Tariffs will be elimi- nated in trade in goods between countries within the area.

TFTA is the key to establishing AfCFTA. The AU hopes to reduce tariffs, eliminate trade barriers, promote trade and invest- ment development within the area, and realize free movement of commodities, services, capital and personnel within the area through AfCFTA construction so as to unify various economies in Africa into a single large market.

The Belt and Road Initiative has pro- vided important opportunities for China- Africa economic and trade development. In September, the FOCAC Summit will be held in Beijing and new policies and measures promoting China-Africa cooperation will be raised to align the Belt and Road Initiative with the AU Agenda 2063. In this context, China and African countries and regional organizations are facing valuable opportu- nities and conditions to launch free trade agreement negotiations. These opportuni- ties should be seized upon so as to upgrade China-Africa trade, encourage stable and healthy development of China-Africa eco- nomic and trade relations and promote the realization of a community with a shared future between China and Africa.

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