The East African EPA – Steppingstone on the road to the African Continental Free Trade Area
The world's largest free trade zone, the African Continental Free Trade Area (AfCTA) is being created in Africa. Following the example of the European Union (EU), a common internal market is to be created in the long term. This is a historic moment for the continent. The agreement covers a total of 1.2 billion people and could create a combined gross domestic product (GDP) of over two trillion euros.
The European Commission has also recognized the great potential of a continental free trade area in Africa. With the Africa-Europe Alliance announced in September 2018, the EU made economic integration one of its five priorities while increasing support for economic integration and trade from seven million (2014-2017) to 50 million euros (2018-2020).
Although the next step could be to address a comprehensive intercontinental free trade agreement between the EU and Africa, this long-term objective does not render the EPAs between the EU and Africa redundant.
On the contrary, since the EPAs promote free trade within African regions and with the EU they increase the attractiveness of African markets for European and German companies and thus create incentives to create urgently needed jobs on the African continent.
In addition, the EPA negotiations have already dragged on for twelve years and it is questionable whether a new trade agreement – with significantly more African players – can be negotiated quickly. This long-term project should therefore only be tackled as the next step after the ratification of the EPAs. They should be used as important building blocks for continental free trade in Africa. This would have the advantage that the experience of the EPAs could be incorporated into the new agreement.
To refuel the process of implementation, the BDI together with the East African Business Council, the voice of the private sector in East Africa, has drawn up a position paper summing up the agreement’s importance and advising on political action.