Workers face free trade raw deal

The new Africa Continental Free Trade Area (AfCFTA) is being met with scepticism by labour analysts in both Namibia and South Africa, who say it may lead to cheap labour flooding their markets.Giving his initial take on the matter, local labour expert Herbert Jauch said while the idea has been discussed and supported by trade unions, in principle, there was a need to harmonise labour practices.“There is a need to harmonise best labour practices and wages for the free movement of labour to work. Otherwise there is a danger that the high levels of unemployment, coupled with extremely low wages paid in many African countries, will lead to a situation where workers from other countries undercut local wage levels,” said Jauch.This was a threat to the labour markets in Namibia, South Africa and Botswana, Jauch said.“In Southern Africa, this is a particular threat for South Africa, Namibia and Botswana. Therefore, the free movement of labour would have to be accompanied by other interventions to ensure large-scale employment as well as decent wages and working conditions.”Recently, a total of 44 countries signed the AfCFTA in Kigali, Rwanda, while 27 signed the protocol to the treaty, establishing the African economic community relating to the free movement of persons.Under the new agreement proposed by the African Union (AU), a single continental market for goods and services will be created while the free movement of business persons and investments will be encouraged. The agreement may also lead to the establishment of a continental customs union, the African Union has said of the ambitious plan.If fully realised, this agreement will revolutionise trade in Africa. For the first time, Kenyan manufacturers will be able to sell their products in Nigeria without paying tax at every border crossing, while a Ghanaian PR firm could open an office in Namibia without jumping through any regulatory hoops and all African citizens will have the right to live and work in any African country, the Mail and Guardian wrote of the trade agreement. The trade agreement was also met with scepticism in neighbouring South Africa.Matthew Parks, parliamentary officer of the Congress of South African Trade Unions (Cosatu) said the neighbouring country's unions share Nigerian labour concerns that African states with weak import controls will be used by countries outside of Africa to “dump” cheap imports and destroy local industries.“We know what happened to the textile industry in the 1990s (and) the poultry industry,” Parks told Fin24.He added there are already problems within the Southern African Customs Union (Sacu), made up of Botswana, Lesotho, Namibia, South Africa and Swaziland, where he claims Chinese companies set up “false warehouses” in Lesotho and bring their products into South Africa.“It's fantastic on paper… but a free trade area could destroy the economy overnight and would further de-industrialise the country,” Parks warned.Dennis George, general secretary of the Federation of Unions of South Africa (Fedusa) warned that an Africa-wide free trade agreement could lead to local job losses.“It could easily become a situation of cheaper labour in countries with no labour standards and undercut the local labour market,” said George.Namibian trade expert Wallie Roux said while concerns around dumping were notable, the ambitious trade agreement made provision for trade remedies to counter any potential dumping.“Annexure 9 to the AfCFTA Protocol on Trade in Goods makes provision for the use of trade remedies. Trade remedies include anti-dumping, countervailing and safeguard measures,” said Roux.Sacu, Roux said, would also be able to mandate the International Trade Administration Commission (Itac) to counter potential dumping.“Namibia is a member of Sacu. In the absence of a Sacu Tariff Board, as per the Sacu 2002 agreement, the member states agreed to mandate Itac to be the investigating authority on trade remedies for all Sacu members on an interim basis,” said Roux.“Hence, this then also applies to Namibia. The application of Itac investigation results is anyway applicable to all Sacu member states,” he said.Roux was also sceptical that the trade agreement would be implemented in the foreseeable future and said it could turn out to be a watered-down agreement.“Only 49% of African Union member states (27 of 55) signed the agreement on the free movement of business persons; meaning for the foreseeable future this will remain an 'agreement in the making'. This would eventually be a tough nut to crack, given the preoccupation of African states with autonomy,” he said.Namibia Trade Forum CEO Ndiitah Nghipondoka-Robiati said Namibia had to clear a few legal processes before signing the agreement. “The reason why Namibia did not sign the agreement is because we have not concluded legal domestic processes needed to clear signature. Namibia is committed to finalising this process,” she said.OGONE TLHAGE

Workers face free trade raw deal

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Namibian Sun 2025-04-08

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Workers face free trade raw deal

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Namibian Sun 2025-04-08

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