India has much to gain by supporting AfCFTA

India has much to gain by supporting AfCFTA

Subject : International Organisations

Context :No discussion on Africa today is complete without the hope and expectations emanating from the Africa Continental Free Trade Area (AfCFTA). \

Concept :

AfCFTA

• AfCFTA seeks to create a single continental market for goods and services, with free movement of business persons and investments, and thus pave the way for accelerating the establishment of the Continental Customs Union and the African customs union.
• The AfCFTA preliminary work is on steps such as incremental tariff reduction, elimination of non-tariff barriers, supply chains and dispute settlement.
• It establishes the largest free trade area in the world since the creation of the World Trade Organization in 1995.
• In a world, becoming increasingly dependent on African markets and commodities, AfCFTA will have a global impact.

Background of Africa’s economic integration

• In 1963, the Organization of African Unity was founded by the independent states of Africa. The organization aimed to promote cooperation between African states.
• The 1980 Lagos Plan of Action was adopted by the Organization of African Unity. The plan suggested that Africa should minimize reliance upon the West by promoting intra-African trade.
• In 2002, the Organization of African Unity was succeeded by the African Union, which had as one of its goals to accelerate the “economic integration of the continent”.
• At the 2012 African Union summit in Addis Ababa, leaders agreed to create a new Continental Free Trade Area by 2017, for which in 2015 negotiations for AfCFTA started.
• The AfCFTA agreement was adopted and opened for signature on 21st March 2018 in Kigali. The AfCTA entered into force on 30 May 2019.