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Rules of Origin, the AfCFTA and “Made in Africa”

One of the key issues which will need to be tackled very soon by the African Union and its 55 Member States are rules of origin. This is also key for ecommerce even today when selling cross-borders. The question becomes – are you selling goods that are 100% locally made, or reselling goods you have imported from another country, or products you have assembled from foreign-made components? And where to draw the line? The issue lies at the heart of President Buhari’s reluctance to sign up Nigeria to the AfCFTA. As President Bukari points out, in a free trade area or customs union problems will occur when one of the member countries imports goods from outside the customs union and then circulates those goods within the union under its own “made in ..” label. This is further complicated if a country imports components from outside the union and assembles them. In which case the question arises when can a product claim to have been ‘made in Africa’?

The AfCFTA is expected to boost intra-African trade by 33%, but indications are that many of these gains could be undermined if rules of origin are not appropriately designed and enforced.  Rules of origin are therefore critical in determining which “passport” a product carries. See www.youtube.com/watch?v=A_ERxhGjsMw for an explanation of this challenge to the success of the AfCFTA by UNCTAD Senior Economist, Mr. Junior Davis, Chief of the Africa Section.

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