Levels of development should guide rules of origin… as auto industry prepares for African free trade

Namibia, Kenya, Botswana, Rwanda and Ghana need rules of origin that will allow the participation and further development of the automotive industry by new players in the sector. The request was made recently at the eighth meeting of the African Continental Free Trade Area (AfCFTA) Council of Trade Ministers in Ghana, where Namibia was represented by Trade Minister Lucia Iipumbu. According to the Council briefing, a number of countries such as South Africa, Morocco, Sudan and Nigeria are aiming to include a higher level of value addition on a number of tariff lines in this chapter. The presentation noted that negotiators failed to reach agreement on a number of tariff lines under this chapter.

“A strict rule of origin will therefore allow few countries in Africa to dominate this sector and, as a result, trade in this sector would be distorted. Ministers need to provide guidance that will allow countries with semi-dismantled automotive industries to trade within the framework of this agreement, and have enough time between 10 and 20 years to move to a higher level of added value,” the briefing said. Giving his input, Iipumbu said that the negotiations and rules of origin agreed under this chapter should take into account the level of all players in the African automotive industry and as such adapt and take into account the different levels of development of the industry of the Member States involved in manufacturing and assembly. of automobiles.

Namibia therefore proposed to consider a sufficient transitional arrangement for Member States preparing for relatively lower value addition so that they have sufficient time to migrate to higher levels. Namibia has taken the position that this agreement should not disrupt new industries, but enhance trade on the continent. It was further stated that Senior Officials should consider a number of flexibilities to accommodate all Member States with appropriate transitional arrangements.

“For start-up countries, like Namibia, the rules of origin should be at a ratio of 70%:30%, but this should increase to 60%:40% over a period of 15 years. For countries like Namibia, it’s also important that the 30% includes things like local labor compensation, and it’s important that the 30% includes bothregional and continental supply,” Iipumbu pointed out.

Currently, 87.7% of the rules have been completed, while the outstanding rules of origin remain in the chapters relating to textiles and clothing, automobiles, sugar and tobacco. According to the council, work on the origins will continue until December 2022.

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2022-02-10 Maihapa Ndjavera

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