The unique role of PAP in AU’s quest for G-20 membership - AFRICAN PARLIAMENTARY NEWS



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Tuesday, February 14, 2023

The unique role of PAP in AU’s quest for G-20 membership

- An analysis of global trade realities/AfCFTA

By Dr Maurice Ezuruike (International Legislative Consultant)

The African Union (AU) with its 55 Member States is aspiring for permanent membership of the Group of Twenty (G-20), comparable to the European Union (EU) which is the 20th full member of the G-20 with its 28 member states.The EU’s membership alsoincludes three of its Member States France, Germany, and Italy who are also permanent members while South Africa is currently the only G20 member from Africa.

The G20 is the premier forum for international cooperation amongst the world’s major advanced and emerging economies on the most important aspects of the internationaleconomic and financial agenda. It is established on the objective of creating a platform for policy coordination between its members in order to achieve global economic stability, sustainable growth, promote financial regulations that reduce risks and prevent future financial crises and create a new international financial architecture.

The G20 countries cumulatively account for around 90% of global GDP, 80% of global trade, and two thirds of the world’s population. It consists of Argentina, Australia, Brazil, Canada, China, EU, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, UK and USA.

As an intergovernmental forum, it focuses on major issues related to the global economy and more particularly on international financial stability, climate change mitigation and sustainable development.

There has been long standing recognition that multilateralism is the most significant avenue to global stability and economic sustainability.  Regrettably, Africa’s past engagements at the global arena have been characterized by an experience and history of uncoordinated economic governance and a convergence of fragmented economic frameworks. Consequently, on issues with far reaching implications on the continent such as climate change, pandemics and security, Africa is relegated to the background and made to absorb the decisions made by other global nations.

However, there is a new paradigm with the AU’s growing centrality in Africa’s economic governance as manifested in the introduction of Africa’s overarching development plan – Agenda 2063 which is operationalized by the African Continental Free Trade Agreement (AfCFTA). AfCFTA embodies tremendous opportunities for growth and sustainable development with the potential to create a continental free-trade zone and a combined Gross Domestic Product (GDP) of USD$3.4 trillion. Considering that it emphasizes the reduction of tariffs and non-tariff barriers, and the facilitation of free movement of people and labor, right of residence, right of establishment, and investment, AfCFTA will unite all 55 member states of the African Union under a common market with a population of over 1.2 billion people. With a booming middle class and the prospects of eliminating import duties and reduction in non-tariff barriers, AfCFTA has the potential to boost intra-African trade by 52.3 percent and transform it as the world’s largest free trade area since the formation of the World Trade Organization.

The potential impact of this economic blueprint to global economic governance has made the AU a new sought out bride with the G20. The support from leaders of industrialized nations to the admission of the AU into this global relations structure have been phenomenal.

French President Emmanuel Macron said that he “supports the full and complete integration of the African Union into the G20” and comparatively in the same way as the European Union is a member.

Chinese President Xi Jinping said that Beijing will support the African Union in its decades-long quest to join the G20.

US President Biden in acknowledging AfCFTA as a major economic blueprint to spur industrialization in Africa if properly implemented reaffirmed his commitment to support a permanent seat for the African Union at the G20.

Undoubtedly, the impetus to these influx of support by these global leaders have been predicated on the development by the AU of regional integration instruments and processes comparable to the EU which is the only regional organization with membership at the G20 and whose membership in the G20 has motivated the support for the AU.

AU’s quest for G20 membership if realized will not only ensure the constructive engagement of African nations on critical global challenges relating more particularly to international financial stability, climate change mitigation and sustainable development, it will also enhance Africa’s access to common framework for debt restructuring and debt service suspension initiative. On the other hand, the inclusion of the AU will enhance G20’s global influence, strengthen global economic governance and effectiveness in the implementation of G20 endorsed policies with a corresponding coherence in the coordination of policies in Africa.

The prospects envisioned in AfCFTA by the global leaders and upon which their support for AU inclusion to the G20is anchored, have made the successful implementation of AfCFTA an absolute imperative if the AU’s quest for G-20 membership is to be accorded any credibility or legitimacy in international relations structure.

However of great concern is the fact that AfCFTA is fraught with critical challenges that several economic experts have identified as potential impediments to maximizing its full benefits. Notable amongst them are the disparities that exist in the level of institutional competencies within member states of the African Union to implement the foundational principles of the agreement, the high level of dilapidated and non-existent essential infrastructural framework, weak fiscal and monetary policy, the lack of ratification of the agreement by some AU member states, political instability andoverlapping memberships in regional economic communities.

These surmountable challenges underscore the imperative to engage relevant organs within the AU governance matrix with demonstrable capacities to mitigate the institutional impediments to the full realization of the objectives of AfCFTA.

Concededly, when you consider the impediments identified by experts and the need to establish an effective mitigation framework, the Pan African Parliament is uniquely equipped with the relevant capacity to establish legal and legislative framework to harmonize competing regional economic agreements, ensure complete ratification by all member states and develop model laws covering trade in goods and services, investment, intellectual property rights and competition policy.

This is far more pertinent when you consider that the operational phase of the AfCFTA has been launched with defined five key instruments that will govern the agreement and the need to inculcate them in Member States’ respective National Development Plans. The key instruments that were adopted consist of the Rules of Origin; the Tariff concessions; online mechanism on monitoring, reporting and elimination of non-tariff barriers (NTB’s); the Pan-African payment and settlement system; and the African Trade Observatory. There is need to develop national strategies to guide the implementation of the operational phase of AfCFTA and to also ensure that the principles of these operational instruments are efficiently integrated into national development strategies and priorities.

Because of the already strong and cordial relations between the Pan African Parliament and National Parliaments in Africa, PAP can effectively establish a platform to articulate coherent guidelines for implementation of the five operational instruments that will govern AfCFTA and for generating legislative underpinnings to mitigate trading barriers.

The Pan African Parliament has historically adopted programmes that strengthen continental frameworks and instruments and has established robust mechanisms whereby members of Pan African Parliament take back critical parliamentary resolutions, debates and issues affecting ordinary citizens to member states. Pan African Parliamentarians by their unique responsibility in the development of national budgetary processes are suitably situated to reflect the principles of these operational strategies in their national budget priorities and give it more effect.

Another major huddle to AfCFTA is the eight regional economic communities (RECs) that currently exist in Africa with overlapping memberships. This creates the potential for fragmentation and incoherence especially when one considers disparities in levels of regional trading arrangements and the competing strategies for economic integration. This is further compounded by existing free trade agreements already negotiated by respective members of regional economic communities as well as the regional and national trading arrangements with other countries, such as the economic partnership agreements (EPAs) that some African countries and country groups have negotiated with the EU.These present a unique challenge on howthis new AfCFTA agreement will operate and illustrate the need for harmonization especially in areas where there is conflicting trade positions with AfCFTA.

The Pan African Parliament has demonstrated the capacity to assemble the regional communities for cooperation and relationship. It has since its inception strengthened ties with regional and national parliaments and pursued programmes aimed at integrating the African continent within the framework of the establishment of the African Union consistent with its foundational objective of facilitating cooperation and development in Africa and facilitating cooperation among regional economic communities and their parliamentary fora.

Through this platform and particularly the “Speakers Conference”, the continent can sensitize member states on the different routes that regions have adopted to pursue economic integration, offer unique opportunity to understand how to accommodate the varying development levels, articulate efficient models, and establish a platform for harmonization so that the various regimes and models adopted by member states operate in a manner that enhances coherence in an already complex trading system.

By creating this platform, PAP has made it easier for leaders of various regional economic communities to come together and review existing strategic frameworks, and existing regional or multinational trade agreements in the various African States, evaluate the potential development impacts and extrapolate relevant factors to ensure that the existing agreements are coherent and supportive of sustainable development in the continent. It can also analyze the legislative underpinnings of the frameworks, establish coherent mechanism for achieving the objectives of the agreement and articulate concrete institutional framework of coordination and harmonization with existing regional communities and trading ties with other partners.

The AfCFTA framework also envisions an agreement that will continue to evolve over time as more negotiations are planned. The efficiency of this process will require the engagement of PAP to guide the establishment of a functional legal, regulatory and legislative framework for continental integration by its ability to develop model laws.

Another major impediment to AfCFTA is the absence of universal ratification by Member States. This presents a unique challenge that must be rectified if the suboptimal impacts of this trade agreement to Africa’s development and economic transformation are to be derived. The African Union record on the ratification of this agreement reflects that only 44 of the African Union’s (AU) 55 member States have ratified the agreement, although fifty-four AU member States have signed the AfCFTA with the exception of Eritrea. The implication is that while AfCFTA is in effect for those 44 of the African Union’s (AU) 55 member States that have ratified the agreement, the countries that have not ratified will be outside of the process. The efficacy of this agreement will require the participation and cooperation of the entire member states of the African Union. While ratification of the agreement does not require the entire member states, it will however require the engagement of all member states for optimal results. This makes full ratification an absolute economic necessity.

The Pan African Parliament possesses enormous experience in fostering and accelerating the ratification and domestication of various continental instruments especially those that enhance continental integration. PAP’s remarkable success in this process is strengthened by its ties with Regional and National parliaments through its annual conference of Speakers of African National Parliaments and Parliaments of Regional Economic Communities. Through this conference, Africa’s regional and national parliaments are sensitized on African Union decisions especially the legal instruments and the need to achieve speedy ratification and domestication.  Undeniably the agreement’s success in promoting seamless trade across the continent and promoting the movement of Africans within the continent will hinge on developing viable legislative infrastructure aimed at mitigating the barriers to a complete ratification process. PAP has the unique and historical experience and success in articulating and implementing coherent strategies and proffering parliamentary pathways to sustaining speedy ratification of AU legal instruments and will definitely replicate that success with the AfCFTA.

The global expectations and support from global leaders are remarkably high and the intrinsic benefits of AfCFTA are not only significant to sustainable development in Africa but also unquestionably consequential to AU’s quest for a permanent seat at the G-20. AU should exploit the unique platform provided through PAP to actualize the objectives of AfCFTA. This will reaffirm the credibility and perceived economic strength of Africa as collectively embodied and consolidated in the AU and accelerate its quest to contribute to a more prosperous future for the peoples of Africa by promoting collective self-reliance, economic recovery, strengthening continental solidarity and building a sense of common destiny among the peoples of Africa.

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