Concept Note On The Preparatory Meetings For Commencement . PDF

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Annexure 1Concept NoteOn thePreparatory Meetings for Commencementof Trading1 Page

Contents1: INTRODUCTION . 32: BACKGROUND . 33: THE MEETINGS AND SCHEDULE . 54: OBJECTIVE OF THE MEETINGS AND RECOMMENDATIONS. 55: PARTICIPATION AND OTHER DETAILS . 62

1: INTRODUCTION1.In accordance with the mandate from the Assembly of AU Heads of State andGovernment, the commencement of trading under the African Continental Free TradeArea (AfCFTA) shall be 1 January 2021. The trading is to be effective and meaningfuland cover at least 90 percent of tradeable products.2.Given the imminent commencement of trading under the AfCFTA, the Secretariat of theAfCFTA has a duty to assist State Parties in the implementation and operationalizationof the AfCFTA, in particular, the customs provisions and related instruments.3.Towards this end, the Secretariat shall convene in Accra Ghana a series of meetings todeliberate on, among others the commencement of trading and the requisiteimplementation structure, documents and processes. Virtual participation in themeetings will be available for participants who are unable to travel to Accra.4.The outputs and outcomes of these deliberations shall be presented to the 13th ExtraOrdinary Session of the Assembly scheduled for 5 December 2020, in South Africa.5.This concept note provides the background, objective, timelines, budget and all otherrelevant information regarding these meetings.2: BACKGROUND1.The Agreement establishing the AfCFTA was signed in March 2018, in Kigali Rwanda,following conclusion of the main legal texts. 54 Member States of the African Union havesigned, and 28 countries have deposited their instruments of ratification with theChairperson of the African Union Commission. The Agreement entered into force on 30May 2019 following the deposit of the 22nd instrument of ratification with theChairperson of the African Union Commission.2.The main objectives of the AfCFTA are to create a single market for goods and services,facilitate the movement of persons, promote industrial development and sustainable andinclusive socio-economic growth, and resolve the issue of multiple membership, inaccordance with agenda 2063. It lays a foundation for the establishment, in future, of aContinental Common Market.3.This is to be attained through the progressive liberalization of tariffs and elimination ofnon-tariff barriers; efficiency in customs clearance and trade facilitation; cooperation ininvestment, intellectual property and competition policy; and the establishment of adispute settlement mechanism.3

4.The operational phase was launched, by the Assembly, in July 2019. However, the startof trading, as decided by the Assembly, was to take effect on 1st July 2020, uponcompletion of the tariff negotiations among the State Parties. The decision onimplementation was made before the onset of the COVID-19 pandemic, which causeddisruption to, among others, the negotiations on tariff offers and conclusion of the Rulesof Origin. As negotiations are now progressing, on behalf of the Assembly of Heads ofState, the Bureau of the Assembly of Heads of State directed that trading under theAfCFTA should commence on 1 January 2021.5.The State Parties are committed to implement the African Continental Free Trade Area(AfCFTA) Agreement, which along with other elements of the Action Plan for BoostingIntra-Africa Trade (BIAT) and Agenda 2063, will forge deeper integration among them.6.There are immense gains to be reaped by the continent through the Agreement.Analyses by the UNECA have shown that the AfCFTA could elevate regional tradelevels up from 18% to 25% within a decade; increase intra-African trade by about USD35 billion per year; decrease imports from outside the continent by about USD 10 billion;and boost agriculture and industrial exports by USD 45 billion and USD 21 billion,respectively. Equally important, the dividends in real income and employment could betwice as large, if the AfCFTA is complemented by trade facilitation reforms, reduction ofnon-tariff barriers, improved infrastructure and measures to counter-balance some of thenegative effects associated with liberalisation reforms such as loss of tariff revenues.7.Effective customs administration will determine the degree to which the AfCFTAobjectives are realized. Many African countries have improved their customs regimes,guided in particular by the principles underlying the World Customs Organization (WCO)and the Trade Facilitation Agreement (TFA) of the World Trade Organization (WTO), butchallenges remain. Customs administrations, no doubt, have been taking on greater andbroader roles of trade facilitation, which requires adopting specific practices to allowseamless flow of trade.8.It has been estimated that the cost of trade activities in developing countries is onaverage nearly double that in developed countries, and that these costs arise from nontariff barriers (NTBs) such as inefficient customs procedures and inadequate transportand communications infrastructure, and not always from higher tariffs. Furthermore,goods (and people) are crossing borders with more frequency, and speed to market is ofgreat importance for both supply chain participants and end consumers.9.African Union Member States have undertaken several types of customs reform,including using online single window systems to streamline customs paperwork andimprove transparency; adoption of Authorized Economic Operators (AEO) programs andrisk assessment tools to speed customs clearance at border checkpoints; and efforts atharmonizing customs processing among regional trading partners.4

10.However, there are discrepancies between the Member States regarding their ability toundertake customs reforms, especially as efforts by some states to improve customs arefraught with weak infrastructure and regulatory environments while some of the morecapable states have established single electronic customs windows in spite ofdifficulties.11.The AfCFTA Secretariat has thus, a duty to support State Parties in the implementationand operationalization of the AfCFTA, in particular, the customs provisions and relatedinstruments.12.To this end, the Secretariat shall organise a number of meetings in Accra, Ghana duringthe month of November 2020. The objectives of the meetings, timelines, participants,budget, administrative and other relevant information are set out below.3: THE MEETINGS AND SCHEDULE1. The following meetings shall be convened by AfCFTA Secretariat in Accra, Ghana:-3rd meeting of the AfCFTA Council of Ministers Responsible for Trade;-4th meeting of the Senior Trade Officials;-1st meeting of the Directors-General of Customs Administrations; and-1st meeting of the Committee on Trade in Goods, jointly with the Sub-committee onTrade Facilitation, Customs Cooperation and Transit.2.These meetings are scheduled as follows:-Meeting of the Committee on Trade in Goods jointly with Sub-committee on TradeFacilitations Customs Cooperation and Transit, 13-17 November, 20201;-Meeting of the Directors- General/ Heads of Customs 16-17 November 2020;-Meeting of the Senior Trade Officials 18-19 November 2020; and-Meeting of the AfCFTA Council of Ministers 20 November 20204: OBJECTIVE OF THE MEETINGS AND RECOMMENDATIONS1. The overall objectives of these meetings are to agree on: the operationalization of thecustoms provisions in the Agreement establishing the AfCFTA; the Protocol on Trade in Goodsand related annexes particularly, Annex 1 on tariff reduction schedules; Annex 2 on Rules ofOrigin; Annex 3 on Customs Cooperation and Mutual Administrative Assistance; Annex 4 onTrade Facilitation; Annex 8 on Transit and any other matter related to border clearance.2. The specific objectives of the meetings are to develop recommendations on the issues in 4.1above, for consideration and adoption by the AU policy organs.15The officials will join the meeting of Directors-General/ Heads of Customs on 16-17 November 2020.

5: PARTICIPATION AND OTHER DETAILS1. The Meetings will draw the following participants:-Ministers responsible for the AfCFTA from all AU Member States;-The Directors-General / Commissioners/ Heads of Customs of all the African UnionMember States;-Trade in Goods and Customs experts from the Customs Departments of Member Statesand of the RECs-The Secretary-General and experts from the WCO;-Experts from the UNECA, AFREXIM BANK, the AfDB; and-Development Partners.2.Venue and dates-3.The meetings shall take place in Accra, Republic of Ghana from 13-20 November 2020.Cost of participation-The AfCFTA Secretariat will provide a return ticket, by the most direct and economicalroute, and DSA at applicable AU rates for 1(one) Customs Expert; 1(one) DG/Head ofCustoms; 1(one) STO and 1 (one) Minister from each of the AU Member States.Member States may fund additional officers on their delegations as appropriate. Costs ofhealth insurance and others incidental to the travel for the meetings will be borne by theparticipants. The Secretariat will bear the cost of mandatory COVID-19 tests at theKotoka International Airport.-The Secretariat will appreciate receiving the names, designation, email address of theparticipants by Friday 6th November 20204.Information-For more information on these meetings, the following staff members of the AfCFTASecretariat can be contacted:Amb. Kwabena Osei-Danquah; 233573449703; [email protected] Francis Mangeni; 233554109330 or 260965214720; [email protected] Nathaniel Wood; 233249346691; [email protected]

goods (and people) are crossing borders with more frequency, and speed to market is of great importance for both supply chain participants and end consumers. 9. African Union Member States have undertaken several types of customs reform, including using online single window systems to streamline customs paperwork and