Re-examining trade with Africa under the Continental Free Trade Agreement - Part 1

good afternoon everyone all right so I'm a human Valley senior fellow and the director of the Africa program here at Brookings thank you for joining us for this exciting event on examining trade with Africa under the Continental free-trade area so we're particularly honored to welcome to Brookings the deputy chairperson of the African Union Commission his Excellency or quite to Kwazii it's a great pleasure working with ambassador Humberto quad to organize this joint event with the African Union as you know the mission of Africa program here is to provide some evidence-based research to uniform policy formulation in Africa in toward Africa and to be an independent voice neutral partner and broker for policy discussions on social economic developments of Africa in this regard our mission is well aligned with that of African Union and our collaborations comes quite naturally as I look at the world today I see this going through really great on certain time times of great uncertainty to say the least the rule-based international system which has held the world together since World War two is being undermined cooperation which has been the hallmark of global governance structure is under challenge and free trade is under assault with the emergence of trade Wars and other forms of protectionism in these uncertain times Africa needs more than ever before it's institution to play a more assertive role in advancing the continents agenda and the African Union the premier institution of the continent is playing greater leadership on continental issues in which that we have not seen before we had the privilege to welcome here last September for some of you who were here President Kagame to discuss the reform of the African Union our scholars have looked at the reform studied them and concluded that they were ambitious and they were bold precisely the kind of reform that I needed for Africa to overcome its challenges and unlock the continents tremendous potential as well as turned the aspiration of agenda 2063 into reality the adoption of the historic free trade area agreement is a testament to the AU's renewed assertiveness and determination to overcome the challenges that the continent faces and it sends a strong signal that African countries intend to speak in a unified voice where their common interests are at stake at the outset I am confident that Africa will overcome the challenge ADA faces because African countries are not facing any issue today which historically has not been faced and successfully addressed by other countries and I do not see why Africa will be the exception Excellency Deputy Chairperson congratulate you and your colleagues at the African Union for this historic milestone and for your leadership with the passage of the Continental free-trade agreement the time is right to have a conversation about its implication for trade with Africa and the implications for the existing trade arrangements such as aboah so with that as background we'll begin our first session which will be moderated by Professor Landry Landry singing Landry is the David Rubenstein fellow in our Africa program by way of introduction and he has several accomplishment awards and recognitions perhaps too many Landry to list here I just discovered this week as we are preparing for this event that another one of his affiliation is a member of the African Union Youth Advisory [Applause] he did he did assure us that that affiliation would not prevent him from asking tough questions and then following this session we'll have a moderated panel discussion with the moderator with nishan Edmund who's the a former State Department official and a fellow with the Africa program here at Brookings so with that I'll turn it over to Landry thank you thank you very much cool for a very kind introduction you are excellency thank you very much for honoring us with your presence I'm particularly enthusiastic as I had the opportunity to interact with you in hopr and to see your commitment for Africa's future so thank you very much as all of you know on March 21st 44 African countries have signed the framework creating the African consonantal free trade area of course removing the goal is to remove tariffs on 90% of products or services to facilitate free trade on the continent however in order for the African CFDA to come into force 22 countries have to ratify it as of today about 49 countries have signed the agreement and six countries have deposited instrument for the African CFT ratification so some observers remain pessimistic about the prospect for both regional integration and successful successful implementation of the African CFG a and they use pass initiatives which they considered it good look good on papers however did not go far in practice to argue that the EFC the African continent our free trade area is not likely to succeed your excellency why should we expect the African CFDA to be more successful than the previous initiatives is this thing coming across well allow me to thank the organizers of this meeting and for me personally is privileged to be in the Brookings Institution distinguished name one has heard about and read about even as I was growing up and doing higher secondary education I never in my wildest imagination thought I will be here addressing the Brookings Institution and people here so let me thank you for this privilege I I believe that you won't talk about eft-1 talk about integration the need to integrate the need to trade among ourselves which for me seems to be the most logical thing one must begin to wonder why has it not always been like that and the answer to this you have to go to the history of Africa Africa has been tamed various things he's been tamed they turn our question mark Kwame Nkrumah called Africa the great conundrum they turn our question mark even the shape of the continent is a question mark with with Madagascar as a dot that a continent so well-endowed you know for some reason manages to be poor and destitute and it's almost inconceivable you have seen Africans outside the continent performing very well and you wonder how come we never managed to get our act together and the reason I I dare to suggest is lies in this history and I want to say that if we say that we need to integrate doesn't surface an admission that we are somewhat less than integral and logically we need to seek to locate the source of that loss of integrity and perhaps we can begin to find answers to our problems I believe in looking at phenomena in the history removes the evolution the development so I want to suggest that the lack of integrity the lack of the absence of concentrating of each other lies in the colonial history the Berlin conference we divided it up I read something that was said by others who was was V French Minister for commerce in 17th century somewhere and he was talking about defining what the colony was the point of our colony is for the colony to concentrate on producing one family product to feed the Metropole and for the Metropole to intend provide everything that is needed in the colony and beyond that to prevent this colony from any interaction whatsoever Nimbus so conceptually walls were built between the various colonies in Ghana for instance where I come from and that's why I know something about we surrounded by francophone countries and very little to do with them I remember one soccer match there was a little confrontation the film between a team from Ghana team from Co revoir and I gonna say strange language this language is French you know it just shows you the division between our people and the deliberate consistent effort by the powers who helps with to bring that people to have any interaction among them so and this is replicated all across the continent so trade and economic relations have been from the colony to the Metropole and vice versa and it is only at a point of Independence that notions began leaders began to meet each other began to father where they had common interest and there was a need for them to trade together i secretary to President Mohammed and we paid a visit to Cody Bois and it was there that he saw a group of Chiefs in Canton he merely assumed that is Reagan and Chiefs they turned out to be a very own ships the same as Dennis and it turned out to him he found out that between his village and a lhasa water as Laden could've only technically minutes apart they spoke the same local dialect still disodium says that entirely different put into each other I'm saying that the absence of trade within and between Afghan countries has is historical causes a historical origins and it is only now that we are seeking to unravel those walls that have been built preventing us from interacting with each other physically and some of those walls are gone but the greater was exists in the minds of the people so the safety against this background seeking true and like the chronic space by moving those tariff barriers because tariffs and other barriers examples of state policy you know I come from Ghana where you going to go to Togo if you change gotta collect a load of gusta to go that's a road block the bothered about my sister clogged up our eyes closed the immigration census IRA tell about you unlevel a shows you could offload everything he's going to expect everything unless maybe you can give in some sense a frown something so the history has is inbuilt corrupt practices which tended to prevent any interaction between them so for 50 44 countries to be able to sign a free trade agreement with the aim of removing these barriers for people to trade among themselves is a major step basically it has we showed that with trading family products to the Metropole but whatever trade there are cast between us tend to be goods on which value as well added if you processed goods and even if it's been shown also that if there's a still has a two percent increase in traffic and trade GDP 10 10 percent sorry on that not following your explanation how will we visual the African constant a free trade area success in the short or long in the short term it can only be seen through an increase in trade amount of people and it's a concerted effort to remove barriers both tariffs and non-tariff which kind of hinder humpback trade between the two countries and you notice that in a relationship you in this lunar convention the convention allows you to export primary commodities free of any excise duties to Europe the moment you start to process an ad value the taxes come on so Europe itself helps to consolidate and prevent Africa from trading within itself so this process is now beginning at least the law is passed videos details rules of origin sources and all that have been addressed and I believe that US trade within Africa increases specializations and comparative advantages who image and it will be more interesting for capital exporting countries - now site industries within the African countries begin to imagine a situation where for instance creatively we can have between gonna could've are the two countries together produce about seventy percent of world cocoa production and you are told I look could advise Prodi a million tonnes you have to up your production the price for Samir understand now the big design a strategic agreement they began to process together now the more process together you could get China for instance to use the excess processing capacity to build factories around the borders because if they do that they have a guaranteed market they have a grantee source of prime products and then you can have a situation where a billion Chinese kids are drinking chocolate every morning on a party these are things that you can do but you need to be creative in which we modulate if I need to be able to break the mold and become sure that those not just to have fed fat and enjoyed what they call a shots gari the French called shots Gary no shots Gaby this your special hunting ground the good fist competition there is going to open it up and then in the process you find more interaction you know we have a situation in West Africa where this unemployment is rife you find Damien gravis are unable to get jobs deform the society they call themselves society of unemployed gravis reprinted chairman president secretary and all that you have a similar session could've are now if you have a situation where Danny on the playground is I hate to go to codify antique English and have especially on a progressive could Eva come to Ghana to teach friends very soon you have a situation where you are you using both languages that will affect employment situation positively the two will get to know each other better to father actually the same people and with that many more things were raised from this so there are many factors not pushing the ratio of condita free-trade area but you have to stitch to stitch it together softly softly across countries which are divided by borders hoping to make the borders and bridges of cooperation fantastic some countries and modern economies such as Nigeria are not yet on board so do you think that this will affect the prospect for a successful implementation i I have no doubt at all that Nigeria will get on board you know Nigeria led this process there was Professor Asik we from altered in Geneva who spent a lot of his intellectual energies driving the very agreements to bring this about and I believe that society misunderstanding between Nigerian labor and idea industry that they might become the dumping ground and so there's this initial hesitation but I have no doubt that Nigel come wrong because potentially Nigeria has the greatest industry capacity in West Africa and the other country it is the country most likely to benefit modem was most people are you optimistic that all the African countries will sign and ratify in the end I have no other type of that this is is a hard economic facts but you see with the countries need to see that their lives are getting better and there's nothing that encourage were better that seen something in progress and successful so we all say that success who bring more success so what we have to do is to make sure that those who are in it continue and when the benefits accrue double the greatest emphasis the greatest encouragement to others to join fantastic and there are many challenges and obstacles for successful implementation for what is the most silent one and how could we address it no I think I think the most important is to see it's getting into action you do and you can only cannot expect progress to come with a big bang it is what Henry Kissinger calls the slow incremental accretion of strategic advantage and that's really what's going to come and then add the momentum builds up momentum brings more momentum these are little physics Arlette that is well put together so what I our reflections on Agua forum and have you discussed the African see FTA ago has been interesting in many ways again the question that I rose is that the US has given duty free entry to encourage Africa produce the United States and the question has arisen why has a Goa why has the acromial swerve the chromis of Africa not being transformed the way they expected to now you can talk about free trade you go to our facilitating trade but before you trade you have to produce so far African countries tend to produce this fabric raw unprocessed products but to make a GU a more meaningful African countries need capacity to process to add value so that exports now come to the u.s. bucket unnecessary products push out or little violet family products who you know whose price and value tends to vary sometimes they go up they go down depending on the market if what we say and that was the tenor of the discussion in this Ogawa forum was that we need to develop capacity we need to encourage United States companies to locate in Africa but they are not coming to us for a Christmas they come in there to make profit and they want to relocate in the place where less capacity driven to to Monday machinery that means a certain minimum education so we in Africa is up to us now first of all to focus on education and to ensure that our mechanics our workers are able to man sensitive equipment with accuracy so we asked him for an Africa where every child is in school you know where the cultural krishna level the numeracy level is gone up because capital in a place must be able to assure that it reads is returns and to do that I need workers who are efficient and literate and hard work and discipline great and perhaps my final question can the African CFCA be harmonized with the Trump administration vision of free trade agreement based on single countries yeah we've been having discussions with very senior members of the Trump administration I had a very interesting discussion a must a light highs this yesterday and I was trying to point out some of those problems to them their argument is that they do no good way to all Africa's United for the entity the businessman you want to do business not want to worked in profit but you must also recognize that even as you have to look at the larger African market you have to do the reality as it is now and as you do the reality you have to find ways to improve the situation so a lot to depend on how quickly African countries themselves ratify and bring this large economic space into reality you know so that's that's work for us to do as well as much as there's work for the u.s. to do we also have to ensure that our legal systems are fair and credible and that if there should be disputes foreign companies who invests have a fair shake in court system which is open transparent and credible so there's work to be done on both sides and once was once you should I have a credible yoga system capital who come in because the rate of return in Africa is higher than everywhere else thank you very much your excellency [Applause] so can I skip now not yet budget now give the floor to the audience taking three questions at the times so please does a different partner no comment we'll just questions and wait for the mic please and introduce yourself before first of all I thank your excellency for coming my name is Gustavo and Allah I'm with the Federation for a free and democratic Equatorial Guinea three points about him when we win so the first question is for those of us in the diaspora we're concerned that the African Union may have been co-opted by China as you know there's been rumors that the Chinese bug the African Union building and we're concerned about that second of all with regard to the future of African leaders we know that there are many of our the leaders are of Africa that there's questions of free fair and transparent elections where does the African Union stand with regard to holding leaders who have been unelected to task so that new generation of leaders can come in thirdly were doing where do we go from here as members of diaspora to be taken seriously by multinational companies and the US government who seem to like the status quo of dictators as opposed to free fair and elected leaders okay can I respond quickly please only one question and be brief to give the opportunity to order to at least one question only in three parts thank you thank you my brother I remember the rather alarmists article element which says that it's not to give the impression that at the end of the day all the transactions in the Africa Union are deciphered in in Beijing or something like that the truth is that there's nothing now we are doing Afghan which is secrets there's nothing we disagree to whatsoever whoever is interested in fine arts is welcome we tried to integrate the continent we're trying to make the content more receptive to for investment in trying to a whole human rise we tried to hold leaders to the a wet we trying to encourage elections we're trying to prevent coup d'etat any any leader who comes into power under Orchestra means is automatically suspended automatically so the Chinese can read this ever even if they want but I don't think it has any value to what they want so it's not really he says it's a red herring in my view you know I suppose it affects the the issue of free and fair elections there's the Convention on democracy and elections which ensures which indicates that any accession to panco jimana in results in your automatic suspension and that is a force that is across the board as the question - pura that - perhaps you know is constitute a sixth region now the videos definitions of the diaspora at why remove you talking about brothers and sisters we're taking sleeves to build other people other countries in Jamaica Barbados Brazil the United States and all that other level you're talking about Africans who have gone now and working in in America whoever in our cart citizenship and of course you know they have a fondness for the content who is sometimes even stronger and more passionate than those of us who are live in a convent so there are two aspects of it and we recognize all of them as part of Africa and their investments their interests is very much welcomed and the issue now diagram is how to channel this into a structure amana for for them to participate in the deliberations and yes I this is the thing with Africa okay is looking to where we're from some people think I'm gonna it's better if we don't really you know we are the same people yeah I tend not to want to distinguish myself as to what I am because it makes us or more United right that's what it's all about okay so on the question of the major challenges this Pro you know the implementation of this C FTA you said that they were legal you mentioned the legal you also mentioned tariffs and then the colonial historical and capacity but I wanted you to address the question of infrastructural challenges how will how should Africa address infrastructure by infrastructure I mean just beyond roads water and energy and all the other aspects of infrastructure it's easier for an African to go from South Africa to England than to go from South Africa to Mozambique next door in terms of treat so how do we deal with that thank you I think this a great question is relevant historically I'm that once I could leave before I forget you know Mommy has historically if you look at a place like Ghana the railway line from the goldmine to the port or the bauxite manganese man to the port if everything tells a story you cannot get a real line connecting Ghana and to go it's from where it is to the port the aim of it is clear to take the raw material and go the question of development of the country is of no consequence no business of them energy between Ghana and cote ivoire for instance we could harmonize and harness energy resources and to grab magenta whisker and everything energy pool it is now being done the moment oil and gas was discovered the borders with Lincoln and could began to shift ended up in litigation for denied a litigation is over and we are seeking now to harness and mobilize energy resources together so that is really what we seek to do but you are operating against the system shall be in the distance for centuries and you're now seeking to turn it around it's like a large boot it takes a while for it to turn around but while the consciousness to turn around is there you can do it now perhaps you can tell where you come from Nigeria first change inside and then I will come back to this one please give to the sir thank you very much the ecstasy my name is Malcolm Beach and a president of the Africa business League of America and I have a question about the business diaspora do you think is reasonable to have the business day after diaspora receive duty-free exports into Africa as a way to increase trade between American Africa and also to see if it's feasible to have business licenses issued by the embassy or the AU for for for business expose from the desperate to Africa without taxes I believe the revenue authorities might have a different take on that it's probably something that is worthy of consideration by in fact if I if I know how Internal Revenue operate I'm surprised they look kindly on that what does the other question know I think that I think that in in reality the reality is that if you want to register a business you have to come Institute I don't know what that you are able to resell a business from outside by electronic means I I don't I'm not how I'm not sure about that I don't know I believe it ought to be possible but to tell you the truth I don't know how this is done yet I really don't know this is something Paris for business or religious centers to think about but I frankly I don't I don't know I don't know yes the lady at the end is a CBN front with a calm I was wondering for the CFT a what you have planned as far as like certification or standards do you plan on adopting international standards or having your own regional standards and as far as like certifiers are each individual countries having their own certifiers will you make a certifying body and how that would tell us of what sky a little bit trade standards you are talking about quality of goods yes I I believe that this is detail and just off the top of my head I don't see immediately upon Africa started yet I think what is going to happen is that the consumers of what you produce will probably make a determination of the quality of your product by buying and continue to buy it and the money supply will determine whether your standards up to speed or not but again this is detail that I'm not aware of I'm sorry thank you accidents my name is Ringo HR I'm economists are the International Monetary Fund so could you share your views on the impact of say FTA on the income inequality within a given African country and what role does the large informal sector in Africa play in this inequality impact potential impact exactly i this is very much in the future and I'm not the business of predicting the future I don't but what I can see as you sit here is that US diplomatic process develops you know this is how a way of equalizing themselves but really i my name is sam wealthy and conferee I'm a banker with Bank of America from Ghana and I was born and living my life in Tama until I came here and Tama is very important because I'm happy to be the best part in Ghana and a gateway of Ghana I'm so very passionate a little imitation level I went for central bank of Ghana's I was always passing through tissue I'm very passionate about this discussion because your excellency we've been taking for granted for a very very long time and I believe for this straight into work for Africa winny revolution we need revelation after revelation actually wait see what you have revelation for turn around revolution revolution we need the word revolution you little revelation revolution is a forceful turn around but then and so we have revelation of what we want to do we will do far I mentioned Tara because check this out we have 28 lagoons in Tama all over Canada we have 28 Lagos we worship them weep a libation in them Israel have only one Lagoon and they are spots you've all available yes you do we do that in Tarragona unfortunately that's why I said there is your question so what I'm trying to say is that until we come to a level where we change our paradigm in the way we behave the stratum gonna imagine Nigeria which happened to be a superpower country in Africa stone or join so what to entreat you help us so that our leaders will do their writing for us so we'll be taking for granted for love those of us here who have become like a laughingstock and that's why we need you and that's why we need this to address some of these problems okay will you stop by stopping for elevation at lagoon I think thank you Steven Landy Manchester trade playing identify paying identification politics I have two grandchildren Jewish african-american 20% Nigerian and 10% commands a 10% Senegal 1% Canaan so I appreciate the opportunity to respond to that and so and I have one very short question which hopefully will be example for everyone else and so on and that is there was no question that the US will benefit from continental integration which is set up production units in Africa we can bring our world-class distribution change we can do supply chains it's unbelievably cool for us what can the United States do as the third country to help you attain your ambitious goals for the continent for the African continent on free trade agreement thank you today the truth I think that the u.s. can help us by developing capacity developing capacity I mean the u.s. is at a cutting edge of science and technology and what we're seeking to do in Africa is to leverage science and technology in production whether I agree or whatever to add value to process so rather than the u.s. simply importing raw materials we expect the u.s. who set up industries within Africa probably industries who process goods between increase in traffic on trade as well as export for process finished value-added scientific goods to the United States that would mean the u.s. contributing to education in Africa and to governance and all that because you know capita capitalism thrives in a situation where governance is good rule of law is evident and transparent and the jujhar system is fair and free and politicians come to power as a result of the harm being willingly voted into power by the people that is their governing and then behest and in the interests of their people so there are many ways that the US remains an example to us we we believe that where Africa is now in terms of consumer arrangements in terms of this in traffic and trade until integration process we are at the point that the u.s. met in Philadelphia in 1776 seeking a much more integrated Union seeking more intrastate trade which was forced true basically by the Supreme Court you know in in ruling against attempts to frustrate intrastate trade this railway trying to do seeking to enlarge the economic space and get the fair playing level for a level playing field for everybody and the US remains the indispensable country and the example pie oxalis perhaps a final question from a lady yes high excellency my name is Karen Etienne my here with the Washington Post and I'm also of Ghanian heritage as well from Accra I'm just wondering with everything that's in the news today about NAFTA TPP the European Union brexit whether or not the leaders of Africa are sort of looking at perhaps what mistakes or what what developments that that has caused this agitation I guess against free trade and against these agreements and what lessons perhaps can the African Union be learning from what's happening with with the EU brexit NAFTA and just a backlash I think against multi-country agreements actually we we are concerned by what appears to us to be a retreat from what lateral ISM and countries seeking to pursue their interests a certain kind of beggar-thy-neighbor policy which is developing we are small countries seeking to develop who believe that a free and fair - not trading system is good for us fair time lives or boots and so we are instinctively against any attempt to inch to restrict freedom of trade now what we can learn from brassey's was that the campaign for the grid for everything to leave the European Union was very much twisted with a lot of false information and I think that a lot of that may have been animated by the British people seeing too many non British seeming to invade their country in the process Great Britain became Brits precisely because of his adherence to free trade and free movement of people became a country which sought to demo no in history any any country that seeks to expel foreigners and restrict the movement goes down because foreigners who come to live in your country people who really want to come there and yeah almost available there are people who come and work with your heart that's why the u.s. as an immigrant country it's their great success and that is why any attempt for the u.s. to restrict the flow of immigration the flow of people condemned for who will come here and seek to make this country great we'll be shooting yourself in the foot the same way that I think Rexach bye bye bye engage embrace it the UK shot itself in the foot and they are beginning to see the results now so thank you very much your excellency for making time to be with us honoring us with your presence today [Applause] thanks for watching be sure to LIKE and subscribe for more videos from Brookings [Music]

Channel: Brookings Institution

Views: 10,720

Keywords: Brookings Institution, H.E. Quartey Thomas Kwesi, African Union, Landry Signé, African Continental Free Trade Agreement, African Growth and Opportunity Act, Brahima Sangafowa Coulibaly, trade, Africa, free trade

Id: -dUPNofqy8E

Length: 48min 23sec (2903 seconds)

Published: Tue Jul 17 2018