The African Union Free Trade Area is unattainable

By Prof Charles Kambanda

I am aware that the AU has signed an ambitious, probably unattainable, Free Trade Area Agreement. While the idea is good, there are all reasons to believe that the AU Free Trade Area is unattainable, in the prevailing economic and social political ( external and internal) environment of majority countries on the Continent.

1. Free Trade Area ( bilareal or multilateral) values are incompatible with dictators and dictatorships. Why? Liberalization, expansion of markets and generally market oriented reforms, which are ” the ” condition precedent” for a functional Free Trade Area can only happen in societies with a culture of respect for rule of law, respect for human rights and good/democratic governance. Therefore,

2. The conditions necessarily for a Free Trade Area do not exist in many countries of Africa. This explains the conspicuous lack of political support for the AU free trade Agreement that was signed in Kigali.

There has been a lot of excitment, in some quarters, over the number of African countries that have signed the Agreement. However,

3. The World Trade Organization’s Trade Facilitation Agreement, with similar objectives, had more political support but it has never been ratified. Signing such agreements means nothing.
Analysts and/or public policy implementation practitioners should concentrate on on the issues: ( i) whether or not many countries will ratify the Agreement, and ( ii) whether or not, under the prevailing economic and politics external and internal environment, a Free Trade area is viable.

4. Trade politics is much more than enjoying a trip to some venue for signing an Agreement and assembling for a group photo later …

5.Free Trade area is not free as it sounds; Free trade areas comes with huge economic and political bills for small / poor economies, including loss of the much needed revenue to run gov, unemployment, terrible inflations, among other economic evil. If a Free Trade Area is not between or among competitors for broader and sustainable economic and political gainst, the folks at the receiving end pay the price. Countries whith with broken fundanentals of the economy are incapable of benefiting from Free Trade Areas.