The Technical Centre for Agricultural and Rural Cooperation (CTA) shut down its activities in December 2020 at the end of its mandate. The administrative closure of the Centre was completed in November 2021.
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The first step


After the creation of Africa's largest open market, the Tripartite Free Trade Area (TFTA) in 2015, hopes are high for the mutual benefits of regional agricultural trade. Yet, in all ACP regions, regional trade policy is slow to translate into implementation, and implementation is even slower to translate into increased regional trade.

While 70% of exports in Europe are between the region's countries, and 50% of those in developing Asia, regional trade is only 11% in Africa, 20% in Latin America and the Caribbean and less than 4% in the island countries of Oceania. Clearly, a lot needs to happen beyond the agreements, including real engagement with agribusinesses and their needs.

The TFTA, agreed in Sharm el-Sheikh in June 2015, was also launched simultaneously at the African Union Summit in Johannesburg. This was fitting, as Egypt and South Africa represent the northern and southern limits of the trade area and its two largest economies.

The TFTA will combine the continent’s three largest regional economic communities – the East African Community (EAC), the Southern African Development Community and the Common Market for Eastern and Southern Africa – into an integrated market of 600 million people and €1 trillion in production. The architects hope that the effect of the TFTA will be to push intra-regional trade up to 30% of African exports (from 11%). Nevertheless, 26 African parliaments still have to approve the agreement individually, and they won’t necessarily be convinced by this promising forecast. Along with two of Africa’s richest countries the TFTA area contains some of its poorest, where small local economies with little to export may not be eager to open up to more competition. However, at the Johannesburg summit, AU heads of state also launched ambitious negotiations on a Continental Free Trade Area, which aims to launch in just two years, despite bringing together more than twice as many countries as the TFTA. The UN Economic Commission for Africa predicts that such a deal would speed up growth of intra-African trade by 52% in just a few years – if aided, crucially, by improvements in infrastructure and other trade bottlenecks.

United on paper

In the Caribbean, free intra-regional trade already exists through CARICOM’s common market, which began in the 1960s with CARICOM’s predecessor, the Caribbean Free Trade Association. In the Pacific, after a 1990s agreement between Fiji, Papua New Guinea, Solomon Islands and Vanuatu, a more expansive Pacific Island Countries Trade Agreement was signed by 14 statesin2001.Butthusfar,onlysixofthesecountries have announced readiness to trade under the deal, and the impact is not easily visible. The same sluggish follow- through can be seen across Africa’s 14 overlapping trading blocs, which trace their lineage back more than a century.

The Southern African Customs Union, still in existence, was the world’s first such group. Currently, the EAC appears to be the front-runner in regional integration. Since its revival in 2000, it has rapidly worked towards a common market (now achieved), monetary union (on the horizon) and even full federation (perhaps more distant). Member state Rwanda, in particular, is sourcing 60% of its food imports regionally.

Yet even in nominally integrated regions, there is much to hamper the real implementation of agreements. Governments are concerned about giving up sovereignty and revenue, stretched between membership in multiple groups (most African countries belong to at least two), and increasingly concerned that free trade could generate losers as well as winners. Meanwhile agricultural trade – most of it small-scale and informal – is still a tricky business. Differences in quality standards and trade policies persist; crossing borders and clearing customs remains slow and perilous; and production levels of in-demand crops don’t necessarily provide what the market wants. Regional trade will only flow if countries produce things their neighbours need and want things their neighbours grow. This is a challenge in the Pacific, where islands share production of a limited set of agricultural products and import everything else from distant lands. Limitations are also apparent in Africa, where exports are concentrated in a small number of products.

Agribusiness with a regional flavour

Ventures and initiatives to catalyse markets are proliferating across ACP regions, bringing potential to fill regional niches. Agribusiness will play a prominent role in shaping regional markets and given the currently small scale of regional trade and the number of even smaller unfilled niches, this is an area where targeted investment can go a long way.

For example, in March 2015, the Africa Trade Fund approved €1.25 million for trade development projects that will start with honey in Zambia and cashew in several other countries. The fund picked these products for their potential in global value chains – but also for their potential for trade within Africa. In fact, the category of sugar, molasses and honey holds the single largest share of intra-African food trade. The funds will help Zambian producers and traders upgrade from bulk to table-ready honey, promising more value from the coming TFTA.

Fiji’s new wave of agribusiness is also bringing the country’s products to its neighbours. Kaiming Agro Processing Limited, engaged in exporting processed ginger products to Australia, New Zealand and the United States (see Field Report, Regional trade takes root), is also shipping root crops to other Pacific Island states. It is joined in this venture by the Rotuma Export Marketing Company (REMCOL), set up by Fiji’s Prime Minister to bring taro, sweet potatoes and cassava from Rotuma Island to the relatively nearby Tuvalu. In May 2015, REMCOL transported the first shipment since an earlier bilateral trade agreement broke down in 2011, raising hopes for sustained trade.

Pacific producers could also increase their trade if they tapped into tourism-related markets. Tourism’s share of GDP in the Pacific Islands is growing by around 3.5% a year, but the demanding industry still imports up to 80% of its food. The first Agribusiness Forum on Linking the agrifood sector to tourism-related markets, organised by CTA, the Pacific Islands Private Sector Organisation and the Secretariat of Pacific Community (SPC) in July 2015 in Nadi, Fiji, aimed to reverse this trend. One big success story, Fiji Crab, has grown in four years to supply 2,000 crabs per month to Fijian hotels and restaurants and is looking for more customers across the region.

Similar successes could multiply if sectors drew closer together. “In many cases, the problems we face can be resolved through better communication between buyers and sellers in the agriculture and tourism sectors,” says Ken Cokanasiga, deputy director of the Land Resources Division of SPC. And importantly, it is more than just tourism: “The promotion of local food is also linked to showcasing healthy food choices and increasing regional trade.”

Roads, rails and handshakes

In Africa, border controls, road blocks and the roads themselves hold back regional trade. A study in 2005 showed that the eight countries of the West African Economic and Monetary Union – already well integrated and sharing a common currency – could increase their mutual trade threefold simply by paving all connecting roads.

Rail is another option, and it is encouraging that Benin and Niger recently agreed to a €1bn deal for a 2,800 km rail network linking them together via Côte d’Ivoire and Burkina Faso.

The lesson from recent agricultural trade experiences within Africa, the Caribbean and the Pacific is that developing regional trade is not necessarily cheaper, quicker or safer than engaging with global markets. Success is achieved where coordination is strong – between all of the region's nations; between agriculture, trade and tourism; and between deal-makers and the public sector. Agribusinesses looking to ‘go regional’ need to be included in the coordination, but credit facilities and financial support for producing and transporting goods is key.

Large trade areas with diverse economies, like the TFTA, are likely to face opposition from smaller and less developed economies unless financial commitments are made by wealthier partners for developing the necessary regional infrastructure. It is well understood that South Africa for example, with its high productive capacity, will benefit first from the deal. Some of the fruits of these benefits should be committed to building capacity in other countries so the region can prosper together.