African FTAs with Asia, Europe, the Middle East, and Latin America

The Project at A Glance

The United Kingdom (UK) constituted the fifth largest source of foreign direct investment (FDI) for African countries in 2021. Yet, UK imports from African countries constitute only a negligible share of the country’s overall imports. Moreover, the UK’s imports from Africa remain predominantly restricted to trade in goods.
International Economic Consulting Ltd. with funding from the Foreign, Commonwealth & Development Office, conducted a study to assess the key policy positions in African FTAs.

What We Found

In a bid to improve trade and investment ties with African countries, the UK has negotiated trade deals with at least 17 countries from the African continent. However, these trade deals are mostly an extension of existing agreements that these 17 countries have with the European Union. Thus, they offer no additional coverage as it pertains to the economic relationship between the UK and these countries.
An analysis of 11 FTAs between African economies and other trading partners indicates that African FTAs are diverse in scope coverage and impact when it comes to trade and investment. For instance, while 7 out of the 11 FTAs include provisions on trade in services, only 3 have comprehensive provisions that may have an actual impact on trade in the sector. Most FTAs include well-defined and comprehensive provisions on trade in goods, rules of origin, sanitary and phytosanitary measures, and technical barriers to trade. As for provisions on trade facilitation, enforcement remains restricted.
In spite of their ambitions, it would appear that the outcome of many of these FTAs remains restricted given the scope and enforceability of their provisions. Moreover, advanced, and emerging trade issues such as regulations on e-commerce or trade and sustainable development are generally not included in these FTAs, highlighting possible capacity constraints experienced by African countries in negotiating agreements.

Our Strategy and Impact

The FTA landscape in Africa remains varied. As the UK seeks to forge stronger ties with African economies, we recommended that the UK initiate discussions on trade deals through a phased approach, starting with the sectors that are of greatest interest to African parties. These would include sectors such as textile and apparel; cocoa products; and electronic equipment, among others. The UK should also explore the potential to expand trade in services with African countries as well. The UK should also seek to minimise, non-tariff barriers to trade, especially SPS and TBT measures. More comprehensive provisions can be negotiated in the longer term. One of the key challenges to trading with Africa is the high cost and complexity associated with transportation and cross-border transactions. To minimise the impact of such barriers, any FTA being designed should equally include provisions for trade facilitation.

Our Core Solutions

With the rapid proliferation of trade agreements worldwide, there are new market and investment opportunities for countries to explore. At International Economics Consulting, based on our extensive experience in international trade, we assist our clients by providing a detailed analysis of the key impacts of new trade agreements on their operations and competitiveness through an assessment of tariff, and non-tariff barriers, provisions on rules of origin, customs efficiency, the effectiveness of transport networks, and sustainability provisions, among others.
We can help assess the opportunities in different markets, determine the feasibility and viability of projects, and benchmark the wider ecosystem to support business growth. We also support clients in navigating the policy landscape regarding international trade by establishing robust monitoring and evaluation framework through sophisticated real-time dashboards and reporting systems to ensure the best outcomes.