Digital trade provision in the AfCFTA: What can we learn from South-South Trade Agreements?

Abstract

The Heads of State and Government of the African Union decided to mandate negotiations for an e-commerce protocol to the African Continental Free Trade Area (AfCFTA). Originally scheduled to form a “Phase III” of the negotiations, the e-commerce protocol was subsequently fast-tracked almost a year later, on 5 January 2021, in a decision that endorsed December 2021 as the deadline for their conclusion. The negotiations for an e-commerce protocol to the AfCFTA present a unique opportunity for African countries to collectively establish common positions on e-commerce, harmonize digital economy regulations and leverage the benefits of e-commerce. Emerging evidence suggests that the Covid-19 pandemic has directly accelerated e-commerce, with a spike in both business-to-business (B2B) and business-to-consumer (B2C) online sales, particularly in medical supplies, household essentials and food products (WTO, 2020). This paper analyses digital trade provisions in existing South–South (S–S) trade agreements, with the aim of helping negotiators and policy-makers from Africa better understand the practical policy implications behind typically existing and upcoming e-commerce-related provisions. This can help guide the design of an effective digital trade protocol in the AfCFTA that facilitates inclusive development. There are two reasons for drawing lessons for the AfCFTA from S–S trade agreements. First, only six African countries have adopted three regional trade agreements (RTAs) – two of which make only broad reference to e-commerce. Morocco is the only African country with a RTA that includes provisions on e-commerce, and that is with the US (the Morocco–US Free Trade Agreement (FTA)). Second, a growing body of literature points to the importance of S–S digital cooperation (UNCTAD, 2019). With the exception of China, countries in the Global South, including African countries, face similar capacity issues and contextual and political constraints to innovation, and are relative ‘digital latecomers’, struggling to achieve convergence with countries in the Global North. Therefore, how Southern countries address digital trade provisions in trade agreements with each other can reveal important insights for African policy-makers as they set out to design the E-commerce Protocol in the AfCFTA.