The African Free Trade Area Could Create Opportunities for Canadian Exporters

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While Canada is employing to diversify its trade with the traditional markets of the United States, it seems like a new African free trade bloc could become one of the targets of the revised Canadian strategy

. and renamed the Department of International Trade Diversification in its ministerial reshuffle Wednesday, with Manitoba MP Jim Carr as minister. The ministry should focus on Asian and Latin American markets to complement the increasingly difficult US market, but Africa could be another potential target

African markets could interest Canadian exporters in sectors such as agriculture, health sciences and

The African Free Trade Area would include 55 countries – more than any other trade agreement since the establishment of the World Trade Organization – with a population 1.2 billion people The continental agreement is expected to get enough ratifications to come into force in January, but it may still take a year or two for negotiators to resolve technical issues such as the "rules of thumb". # 39; origin. "

Canada has helped fund free trade research in Africa, and Canadian government officials have already According to an informal official who spoke on condition of anonymity because the discussions were confidential, the leaders pose for a group photo during their meeting in March. sign a free trade agreement that would create a liberalized market for goods and services across the continent

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Of the 55 member states of the African Union, 49 have now signed the "Free Trade Agreement". commercial agreement. A key economy, South Africa, has been among the last to sign the agreement early this month. The biggest holdup is Nigeria, but its president now says he's going to sign.

The agreement will enter into force one month after ratification by the parliaments of 22 countries. Six countries have already ratified it and it is expected that 16 other countries, including South Africa, will ratify it before the end of the year.

"There is a strong momentum," said David Luke, coordinator of African Trade Policy. Center of the United Nations Economic Commission for Africa

"Africans see here the opportunity to develop their economy, create jobs and attract investment," he said at the Globe and Mail

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Intra-African trade currently accounts for only 18 percent of total African trade – far less than the percentage of domestic trade in Europe or Asia. But the volume of domestic trade could increase by 52% by 2022, compared to the level of 2010, thanks to the elimination of import duties under the terms of the agreement. free trade, says the United Nations Economic Commission. important because it is more likely to be made up of manufactured goods and other value-added products, while exports to countries outside Africa are dominated by oil and other products.

The trade agreement, negotiated since 2015, was signed by 44 countries at a summit of the African Union in March. At another summit earlier this month, the agreement was signed by five other countries: South Africa, Sierra Leone, Lesotho, Burundi and Namibia.

The trade agreement represents "a new dawn for Africa". South African President Cyril Ramaphosa said last week: [TRADUCTION] "By trading among ourselves, we will be able to conserve more resources on our continent to share them, alleviate poverty and reduce inequalities."

Muhammadu Buhari hesitated to sign early after expressing concern about the impact on domestic industries and promised to consult with business leaders before signing the agreement. However, last week he said that he was now in favor of the deal. "I'll be signing it soon," he told reporters.

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Canada struggles to negotiate free trade agreements with China and l & # 39; India. Canada already has a mosaic of foreign investment protection agreements with some African countries, but a broader agreement with a continental bloc would be a more attractive target

"The risk that Canada will rely too much on the US United becomes obvious. said Mr. Luke, who taught at Dalhousie University in Halifax.

"The current NAFTA crisis is a wake-up call that you can not rely on one market – you need to diversify – Canada should look to the rest of the world."

L & # United Nations agency for trade and development, UNCTAD, estimates that Africa can increase its GDP by 1% by eliminating import taxes for African domestic trade

. Tariffs are far from the only problem – bureaucratic rules, corruption and other non-tariff barriers are a major problem in Africa, and bad roads and railways are another major obstacle to trade. According to one study, the cost of doing business in Africa is about 50% higher than that of East Asia.

A recent report from Moody's rating agency concludes that South Africa, Kenya and Egypt are the most likely countries to ac because of their relatively developed manufacturing sectors and their electricity supplies.

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