Question NW808 to the Minister of International Relations and Cooperation
27 March 2023 - NW808
Hlengwa, Mr M to ask the Minister of International Relations and Cooperation
With reference to continental trading under the African Continental Free Trade Area agreement that has been reported to potentially exacerbate the inequality lines in countries due to the disproportionate gains in economies, how will her department advocate for the complementary inclusion of regional value chains that include smaller economies?
Reply:
Since African economies are at different stages of development, there is a risk that smaller economies might not reap equal benefits of the AfCFTA as compared to the more advanced and diversified economies. It is for this reason that the AfCFTA provides provision for the asymmetric reduction of tariffs depending on the size of the economy of each State Party. In this regard, the AfCFTA makes provision for the less advanced countries or least developed countries (LDCs) to eliminate their tariffs over 10 years for the first 90% of products as compared to five years that is allocated to the more developed economies, such as South Africa. The remaining 7% of tariff lines which are designated as sensitive will be eliminated over a longer time frame- the developing African countries will do this over 10 years whilst the LDCs are given 13 years. These provisions were specifically made to cushion and provide policy space for smaller African economies against the shocks that may come with trade liberalisation.
South Africa views the AfCFTA as a catalyst for economic growth and development for the entire Continent. Furthermore, South Africa actively encourages investment in the development of Regional Value Chains (RVC) across the Continent. South Africa has and continues to actively participate in the ongoing work of the Programme for Infrastructure Development in Africa (PIDA), the Presidential Infrastructure Championship initiative (PICI), chaired by South Africa, and the Specialised Technical Committee (STC) on Trade, Industry, Tourism and Mineral Resources, which deals with industrialisation and development of RVCs on the continent.