Reference no: EM133030114

Summary of case

The closing case explores free trade in Africa. Currently, there is very little intra-Africa trade thanks to significant trade barriers limiting the movement of goods within the continent. In fact, countries in Africa are more likely to trade with the European Union or the United States than they are with each other. There is reason to believe, though, that that could all change. In 2015, 26 countries signed an agreement to work toward creating a common market known as the Tripartite Free Trade Area. If it is successful, it will allow African firms to achieve greater economies of scale and lower their costs.

Please make sure to read and study the full case in Chapter 9 of our textbook.

In addition: Here are couple of links and videos that are very informative about this topic:

Website: The CFTA - Continental Free Trade Area https://au.int/en/ti/cfta/about (Links to an external site.)

Website: The TFTA - Tripartite Free Trade Area

https://www.tralac.org/resources/by-region/comesa-eac-sadc-tripartite-fta.html (Links to an external site.)

Video: I highly recommend watching this video as it reflects the views of many officials and countries in Africa regarding the TFTA.

https://youtu.be/x9hmxR4J9TA (Links to an external site.)

Questions:

1. Why are African countries more likely to trade with Europe and America than they are with each other?

2. What are the likely gains from trade to be had from TFTA if it is fully implemented as a common market?

3. Why do you think free trade areas established so far in Africa have not lived up to their expectations? How can this time be different?