Abstract
The objective of this article is to employ theoretical insights from the political economy of trade and regional integration to analyse the connection between the Belt and Road Initiative (BRI) and the African Continental Free Trade Area (AfCFTA). The BRI aims to build infrastructure that connects transport, energy and telecommunications systems, while the AfCFTA aims to create an African continental market for goods, services and the free movement of people.
Regional integration in International Political Economy (IPE) refers to the establishment of an organizational agreement between countries in a particular region designed to facilitate and coordinate the free flow of goods and services. There are four interconnected themes driving regional integration in Africa over the past few years. These are trade policy, trade facilitation, infrastructure development and economic competition. Despite efforts to integrate, there are still problems, such as the free transport of goods, services and integration of market factors.
The Chinese school of thought on regional integration is motivated by political or geopolitical considerations rather than economic considerations. Regional integration, however, took on a new meaning with the introduction of the BRI. This initiative provides funds for the establishment of infrastructure projects that can improve cross-border trade and help with economic growth. The BRI is currently the most important programme to encourage deeper economic integration and a well-formulated policy tool to connect China with the rest of the world. The AfCFTA aspires to use regional organisations to facilitate trade across the continent. Regional agreements and economic communities have been the foundation of trade in Africa for decades. The Economic Community of West African States (ECOWAS) was the first organisation established in Africa to facilitate trade within the region. The Common Market for Eastern and Southern Africa (COMESA) and the Southern African Development Community (SADC) also have a long history in Africa.
The AfCFTA will create new opportunities for Chinese-African cooperation and requires the building of strong infrastructure. It is in this area that Chinese assistance is welcomed due to the country’s wide experience in building infrastructure at home and in countries all over the world. China’s motivation for cooperation with the AfCFTA is to create an effective and profitable trade area that is beneficial to all parties. At this stage it is too soon to expect clear results, but the hope is that all countries will benefit once the AfCFTA is fully operational. The physical integration of infrastructure is important for the following reasons. First, economic growth is promoted by building networks; secondly, social unity is increased by building access routes; thirdly, infrastructure helps to create communication channels that promotes dialogue, development and peace; fourthly, trade disputes between countries in the region can be jointly resolved; fifthly, decisions are made that benefit all the countries in the region; and finally, local governments and the private sector can participate in the integration process.
Theoretical insights from the political economy of trade and regional integration are used in a predictive way to indicate the connection between the BRI and AfCFTA. Due to the fact that the AfCFTA is only in the initial phase of implementation, the focus is on expectations and possible results of cooperation.
The BRI is an important tool to promote the economic goals of both China and Africa. Cooperation on BRI projects can strengthen the negotiating power of all parties in multilateral forums and prevent stronger countries such as China from taking advantage of weaker countries. Trade agreements aim to reform economic structures and also help African countries gain greater bargaining power in the WTO. China’s investments are also valuable for developing Africa’s industries and creating new job opportunities and economies of scale. Thousands of temporary workers from China are employed in BRI and other economic development projects across the continent.
The BRI is also an instrument to integrate regions based on political and military reasons, for example the role of peacekeeping missions, African countries’ support for China in the UN and WTO and the One-China-Policy. Realism is of value in explaining China’s political leadership in the integration process. The assumption is that a process of political and economic integration can be achieved only through strong leadership from one or more countries. China as the leader of the BRI is willing to use its power and influence to promote the integration process. Neoliberalism promotes free trade and economic growth, reduces poverty, creates competition in the market and presents consumers with more choices between products. Neoliberalism can explain the integration of African markets under the AfCFTA.
Neofunctionalism prioritises the common actions and objectives of countries within a region to form an integrated economic unit or political entity. The AfCFTA can serve this purpose and unite all regions in Africa to facilitate trade. Neofunctionalism aligns with China’s premise that Africa should form a web of interdependence of the different regions to promote trade relations. Constructivism focuses on the way in which social interaction contributes to shared interests and identity. This social interaction is important for realising China’s shared vision for humanity. The vision pursues sustainable economic development, cooperation and the maintenance of the international system of governance for all countries in the world.
China’s challenge to the Western model of financing is one of the major areas of criticism the West has of the BRI. Efforts by the West to provide financing through bilateral and multilateral agreements are overshadowed by the large amounts of money China is investing in the BRI. While the BRI on its own is not strong enough to change the business landscape in Africa, China’s infrastructure-building is of value to promote the AfCFTA. China is willing to help African countries develop economically, which strengthens the Chinese-African partnership at the international level. China maintains a policy of economic development with countries in the Global South and countries are rewarded for cooperation. This all coincides with efforts to make the Global South part of a Chinese-centric international trade network.
Stronger economic power means that China gains advantage from the signing of trade agreements. This has a negative effect for African countries because they transfer economic sovereignty at the cost of negotiating power. In effect, China gains greater competitive advantage and Africans pay more for goods and services. Despite all the praise heaped on the AfCFTA, there are challenges. Some of the biggest challenges facing countries on BRI routes are poor infrastructure and a shortage of economic corridors. It is true that BRI infrastructure projects increase trade, attract more Chinese investment and alleviate poverty, but there are also drawbacks in that the cost of new infrastructure for certain projects exceeds the benefits – the high debt burden and non-completion of economic corridors being examples. Western countries are traditionally protectionist in their trade with Africa, but expect African countries to remove obstacles that could hinder trade. The AfCFTA seeks to introduce the African market to the world and this will be difficult to realise if the attitude exists that Africa is still dependent on Western economies.
The findings of the study reveal the following: First, China and Africa share related perspectives on regional integration and the facilitation of trade, the building of industrial areas to encourage specialisation, reduced tariffs on goods and services, the flow of labourers between regions, and competitive market advantage. Secondly, the connection of all these areas can reconcile the BRI’s building of infrastructure with the AfCFTA’s liberalisation of trade and lead to a win-win situation. Thirdly, it is necessary that economic corridors are established to increase trade within and between regions. While it is still too early to make any predictions about the feasibility of the AfCFTA, the foundation is laid for regional integration and the promotion of trade. The connection between the BRI and AfCFTA can help realise this vision.
Keywords: African Continental Free Trade Area (AfCFTA); Belt and Road Initiative (BRI); connection between the BRI and AfCFTA; facilitation of trade; regional integration; theoretical insights from the political economy of trade and regional integration
- The featured image by Thomas Bennie of this article was sourced from Unsplash and adapted.