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Panel discussion: Exploring resilience and economic recovery for the AFCFTA

On 1 December 2021, Tulip Consulting, in partnership with the Overseas Development Institute organized a panel discussion as part of the IISD Trade and Sustainability Hub 2021.

The discussion centered on how the African Continental Free Trade Area (AFCFTA) can be used as a lever to achieve sustainable development and economic reconstruction in light of the ongoing COVID-19 pandemic.

David Luke, director of the Firoz Lalji Institute for Africa at the London School of Economics, highlighted that a critical aspect to build back better is understanding the impact of climate change and the need to transition to a low-carbon economy by adopting green growth models. David highlighted the importance of initiatives such as the African Green Stimulus Programme (AGSP), which seeks to harness the opportunities of green recovery, and the 2020-2026 Green Recovery Action Plan (GRAP) which aims to tackle the combined challenges of post-pandemic recovery and climate change with a focus on climate finance, renewable energy, resilient agriculture and others.

Stefania Lovo, associate professor at the University of Reading, focused on the role the AfCFTA can play in boosting green industrialization. She noted that African countries have the opportunity to leapfrog inferior and outdated technologies by borrowing from the experiences of more advanced economies. In this respect, trade can facilitate the transfer of green technologies. She further identified the importance of focusing on enforcement of environmental regulation and pollution monitoring. The biggest challenges Africa will face in this regard are the high-cost considerations and weak institutional capacity. Improving the collection of real time pollution data, as well as improving transparency, has been shown to have positive effects on lowering pollution. She further highlighted the importance of developing more sustainable transportation and infrastructure on the continent.

Jodie Keane, senior research fellow at the ODI, discussed the research findings of a report undertaken by the ODI, ACET and the UNECA, assessing the short to medium term objectives of various African countries in their Covid-19 recovery strategies and to what extent these are aligned with environmental objectives. As African countries' resilience strategies evolve, greater emphasis has been placed on sustainable development perspectives. Turning to the AfCFTA, she noted that while it has great potential to build resilience into value chains in the economic sense, the links between trade and investment policy are not always well articulated in African countries' recovery strategies. Specifically, she highlighted the importance of defining and identifying environmental goods and services within the context of the AfCFTA.

The discussion then moved into the second round of questions which focused on the role of the AfCFTA in addressing challenges arising from the green economic recovery. In response to the question whether additional provisions to the AfCFTA such as a protocol on trade and sustainability might be helpful, David Luke stated that there is scope within the agreement as is to include environmental goods and services. With respect to services, two priority sectors, transport and tourism, already offer entry points for incorporating environmental considerations and. David further stated that Phases 2 and 3 of AfCFTA negotiations present an excellent window of opportunity to embed environmental considerations more deliberately within the protocols, particularly in the areas of e-commerce, research and development, technology and infrastructure.

Petina Gappah, principal legal advisor for the AfCFTA Secretariat, discussed value chain sustainability, highlighting that Africa could no longer rely on the traditional goods trading system of the past where it exported raw materials and must now focus on industrial development. She mentioned that while the AFCFTA includes some environmental provisions (e.g., an equivalent provision to GATT Article XX exceptions) overall, these references are minimal due to conservative negotiations. She noted that this does not rule out future protocols addressing sustainability specifically.

Stefania then discussed that as the AfCFTA is expected to promote the expansion of energy intensive sectors, it will be important to incentivize a transition to cleaner forms of energy. She gave examples on how the AfCFTA could facilitate the harmonization of standards, for instance with regards to emission standards for vehicles. She also highlighted the importance to regulate trade in waste, such as end of life vehicles and electronics and managing their disposal.

Jodie Keane offered her insights into the quality of African Nationally Determined Contributions (NDCs). She highlighted that the upcoming COP in Africa will coincide with the implementation agenda of the AfCFTA and its remaining negotiations and this will provide an opportunity to make sure trade and climate change policies are better aligned.


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