What is a trade agreement? A trade agreement can be defined as when two or more nations agree on the terms of trade between them. Tariffs and duties on both imports and exports are determined and thus international trade is in turn affected. When three or more countries are involved, this is known as a “multilateral trade agreement”. This type of agreement involves a number of participants, and challenging negotiations due to each country having its own needs and requests. Benefits of such an agreement, since a large geographical area is covered, include each member having a competitive advantage with “favoured nation status”, and that there is consensus among the countries involved to treat each other equally. 

The Africa Continental Free Trade Agreement (AfCFTA) is the world’s largest free trade agreement with regards to number of countries. As of July 2019, 54 African Union member states had signed the AfCTFA. There were 27 ratifying countries, with Eritrea being the only nation which has not signed the agreement as yet, although market experts predict that they will sign. This agreement is thus anticipated to be made up of 55 countries, a combined GDP of more than US$2.5 trillion and a total population in excess of 1.2 billion people.