The African Continental Free Trade Area Agreement Will Be Good For The

Economies Of Member Countries Ref Sheet

Proposition:
1. Ref: Job Loss.
a. Free trade does create more jobs, but protectionism is the opposite. Free
trade may reduce jobs in inefficient industries, but it frees up resources to
create jobs in efficient industries, boosting overall wages, and improving
living standards. Protectionism, in contrast, attempts to protect jobs that
the market will not sustain, at the expense of more innovative industries.
i. Protectionism actually has more devastating effects that outstrip
any benefits of saving jobs. According to the Library of Economics
and Liberty, protectionism increases consumer prices because
nations are unable to obtain the cheapest economic resources for
producing goods. Companies also may have to pay higher wages
for manual labor jobs, which also increases consumer prices.
b. Another way to approach the belief that free trade destroys jobs is to
observe that the main factor in employment is population growth.
Employment naturally grows in line with the population. Every new
worker who arrives on the labor market creates his own job in the very
real sense that he spends as much as he earns (or the rest is invested,
creating jobs too); indeed, it is precisely in order to spend an equivalent
amount that he starts working and earning an income. The new worker
creates his own job by creating another one elsewhere in the economy
through his own consumption.
c. Much of the change in the labor force is not the result of free trade but of
innovation. New technology, such as apps on mobile devices, has
displaced a staggering variety of products, including radios, cameras,
alarm clocks, calculators, compact discs, DVDs, carpenters’ levels, tape
measures, tape recorders, blood-pressure monitors, cardiographs,
flashlights, and file cabinets.
2. Increases Poverty
a. As James M. Roberts and Ryan Olson of The Heritage Foundation report,
countries with higher levels of economic freedom have citizens who enjoy
a longer life expectancy, take better care of the environment, and spend
more time in school—an important factor for poverty reduction.
 The African Continental Free Trade Area Agreement Will Be Good For The
Economies Of Member Countries Ref Sheet
i. Trade helps poor nations and their workers accumulate a bit of
wealth and comfort. That in turn allows the poorest of the poor a
chance to keep their children in school. It allows them the
possibility of a brighter future.
ii. This also helps in the long-term because the income-inequality
gap would shrink, which would ALSO boost the economy.
iii. According to the Pew Research Center, from 2001 to 2011, the
number of “poor” individuals—those living on less than $2 a
day—decreased by 14 percent globally.
1. During the same period, world trade (as a percentage of
gross domestic product) increased by over 9 percent, from
51.5 percent up to 60.7 percent.
3. Ref: Countries Surrender Sovereignty
a. In reality, The “most-favored-nation” and “national treatment” clauses of
the General Agreement on Tariffs and Trade require that nations treat all
trading partners alike and do not discriminate between domestic and
imported goods. This requirement of reciprocity helps assure
governments that gains from trade will be available for everyone.
4. Ref: Prevents Countries from Keeping their goods.
a. Some nations have extremely high quantities of raw materials, which
they are unable to use domestically in their entirety. For example, South
Africa has the most diamond reserves out of any nation in the world.
b. With freer trade, South Africa can more easily sell excess diamonds to
other nations and take advantage of their material surplus to benefit their
economy. Raw materials can easily be bought and sold between freely
trading countries, preventing the wasting of crucial materials. It also
allows materials to be used to produce consumer products in other
countries where manufacturing costs are cheaper, therefore lowering the
overall cost of many goods for consumers.
5. Ref: Would Promote War
a. In fact, one fascinating study from Stanford University proved that the
more trading partners a nation have, the less likely it is to go to war.
Additionally, this study showed that nations tend to not go to war with
their trading partners. This makes sense. After all, why would nations
 The African Continental Free Trade Area Agreement Will Be Good For The
Economies Of Member Countries Ref Sheet
want to attack countries that can either help provide them with goods, or
serve as a market to export to? It would be counter-intuitive from an
economic standpoint.
6. Ref: Creates a Trade Deficit
a. The trade deficit is not debt. A growing trade deficit, despite its
misleading name, is good for the economy. It is typically a signal that
global investors are confident in Africa’s economic future. The African
trade deficit might be larger than it would otherwise be if a trading
partner chooses to keep the price of its currency artificially low, but this
practice harms the trading partner, not Africa
7. Ref: Tax Revenue losses (because of tariffs)
a. For the continent as a whole, tax revenue losses from the elimination of
import tariffs are estimated to be modest. This reflects the low level of
effectively applied intraregional import tariffs, the rather modest level of
intraregional trade, and a small reduction in imports from the rest of the
world. Moreover, any tariff revenue losses are likely to be offset
eventually by higher tax revenue from increased consumption and
income, as a result of reduced trade barriers, especially NTBs. Virtually
all studies find relatively small gains from the elimination of import tariffs
and significantly larger gains from reduction of NTBs.
8. MONOPOLIZATION
a. In fact, someone's lasting monopoly of a treasured resource means two
things: first, it is a great incentive for entrepreneurs to focus their efforts
and imagination on finding alternatives (which are always possible
because nothing in this world is entirely specific), and, second, it makes
the monopolist relatively poorer for as long as s/he does not put the
resource to use.

Opposition:
1. Ref: Increased Innovation:
a. For example, a country might not have domestic oil reserves. Allowing
large incumbents that produce oil and cars from other countries to
cheaply sell their products across the border increases the barriers to
entry for innovators who have found a more appropriate technology that
 The African Continental Free Trade Area Agreement Will Be Good For The
Economies Of Member Countries Ref Sheet
might be more expensive today, but cheaper in the long-run. This is the
type of innovation that gets stifled regularly by free trade agreements.
i. Along with stifled innovation, the country loses out on greater
revenue that could be generated if they flipped this import to
export, misses the chance to see increased skill development that
could lead to even more innovation, doesn’t benefit from high
paying jobs that generate more revenues and more vigorous
markets, and ultimately, the country sees slower growth and
progress.
2. Ref: Less Government Spending.
a. We DO AGREE that government spending WILL go down under free
trade. But this actually helps our first contention of monopolization
BECAUSE the government subsidies HELP SMALL farms, especially in
Africa, as detailed in our second contention. As government spending
gets CUT, the subsidies that make SMALL FARMS RELEVANT are also
cut, which puts many small farms out of business. And then, mage
companies can become MULTI-NATIONAL MONOPOLIES, which we have
already detailed why that is bad.
3. Ref: Cheaper Imports
a. For this, we can take a look at NAFTA, a similar trade agreement between
the United States, Canada, and Mexico. First, this promise has failed to
materialize for many critical consumer items, such as food. Despite a 216
percent rise in food imports from Canada and Mexico under NAFTA, the
average nominal price of food in the United States has jumped 70 percent
since the deal went into effect. Second, even those reductions in prices
that have materialized have not been sufficient to offset the losses in
wages under NAFTA. The Center for Economic and Policy Research
discovered that when comparing the lower prices of cheaper goods to the
income lost from low-wage competition under current trade policy, the
trade-related wage losses outweigh the gains in cheaper goods for the
vast majority of U.S. workers. This trend is common among all free trade
agreements, and we can expect the same from Africa as well.
 The African Continental Free Trade Area Agreement Will Be Good For The
Economies Of Member Countries Ref Sheet
4. Ref: Doesn’t Increase Wage Suppression
a. For this, we can take a look at NAFTA, a similar trade agreement between
the United States, Canada, and Mexico. Even proponents of NAFTA admit
that trade pressures have likely contributed to today’s historic degree of
inequality. The pro-NAFTA has estimated that 39 percent of observed
growth in U.S. wage inequality is attributable to trade trends.
5. Ref: Lift Out of Poverty
a. The pro argues that free trade would lift people out of poverty. Today, we
argue that trade disproportionately hurts poor Africans. We say free
trade creates a wage gap between low- and high-income earners, and
constructs barriers that make it increasingly difficult for the less fortunate
to climb the economic ladder. This is known as the “poverty trap.”
i. Another challenge is that high-quality data on the well-being of
the poor is often not available. It is thus really hard to tease out the
effects of globalization on poverty in a broad sense.
b. The cut goevrnmet spending would push more people into poverty
because the small farms would go out of business and they would no
longer have anything to survive on. ($1.5 trillion USD in losses)
6. Ref: Increases Investments
a. In some countries in Africa, there are so many factors that work against
trade. One of the reasons why many companies don’t go into some of
those countries is the lack of political and economic stability. The risks of
doing business are much higher. That precludes them from benefiting
from globalization. Trade, alone, won’t lift those countries. Many other
changes need to occur.

The AfCFTA agreement has seven operational objectives. These are to (1) eliminate
tariffs and non-tariff barriers to trade in goods progressively; (2) liberalize trade in
services progressively; (3) cooperate in matters of investment, intellectual property
rights, and competition policy; (4) cooperate in all trade-relsated areas; (5) cooperate in
customs matters and the implementation of trade facilitation measures; (6) establish a
mechanism for the settlement of disputes concerning members’ rights and obligations;
 The African Continental Free Trade Area Agreement Will Be Good For The
Economies Of Member Countries Ref Sheet
and (7) establish and maintain an institutional framework for the implementation and
administration of the AfCFTA