UNCTAD on how to tackle trade barriers in Africa

A recent report by the United Nations Conference on Trade and Development (UNCTAD) sheds light on the significant impact of non-tariff barriers on intra-African trade. According to the report, African countries stand to gain a staggering 20 billion US dollars annually by addressing these barriers at a continental level. CNBC Africa spoke to Giovanni Valensisi, the Economic Affairs Officer at UNCTAD, to delve deeper into the issue of trade barriers in Africa. Valensisi emphasized that at UNCTAD, they focus on non-tariff measures rather than barriers to underscore the policy measures that impact trade but are driven by legitimate objectives such as health and environmental protection. He highlighted that excessively restrictive non-tariff measures adopted with protectionist intent are referred to as non-tariff barriers due to their disproportionately high impact on trade. The interview with Valensisi identified four main types of non-tariff barriers that hinder trade within Africa. The first category includes sanitary and phytosanitary measures that impose limits on certain issues in food and agricultural products. The second type, technical barriers to trade, involve conformity requirements for manufactured goods, especially in sectors like chemicals. Trade facilitation-related non-tariff measures make up a third major category, encompassing administrative costs and processes at customs for compliance with regulations. Finally, rules of origin serve as another key factor triggering non-tariff measures, requiring proof of a good's regional economic community origins for preferential treatment. Valensisi underlined the potential economic benefits of addressing these barriers, noting that non-tariff barriers have an impact two to three times more restrictive than tariffs. He estimated that the African Continental Free Trade Area implementation could yield welfare gains of about 16 billion USD just from tariff reductions, with non-tariff elements poised to offer even greater benefits, albeit requiring a more complex process of regulatory convergence. Notably, agriculture and food industries, prevalent in intra-African trade, stand to gain significantly from the removal of these barriers. Moreover, Valensisi highlighted the substantial impact of streamlining customs procedures, explaining that one extra day at a customs post equates to an additional tax of 1.5% on average, emphasizing the potential gains for African economies through improved efficiency in customs processes. The discussion also touched upon existing tools, including the Africa Continental Free Trade Area, aimed at reducing non-tariff barriers. Valensisi emphasized the importance of these tools, developed within regional economic communities, and the varied uptake and sustainability of these mechanisms. While some tools have been the result of extensive consultations and online platforms for monitoring and addressing non-tariff barriers, the experience with these tools across different regional economic communities varies. In conclusion, addressing non-tariff barriers in Africa holds immense potential for unlocking trade opportunities and driving economic growth on the continent. By tackling these barriers through regulatory convergence, streamlined customs processes, and leveraging existing tools, African countries can pave the way for a more prosperous and interconnected intra-African trade landscape.