1.1 Introduction
The African Union (AU)’s approval of Phase 2 of the African Continental Free Trade Area Agreement (AfCFTA) covering the protocols on investment, intellectual property and competition policy reinforces the commitment of African leaders and policymakers to use economic integration to promote pan-African industrialization and sustainable development.[1] The approval strengthens existing efforts to complete the negotiations for the remaining aspects of the trade regime and Phase III. AfCFTA, which is an epochal trade agreement in the history of African economic integration [2], seeks to use enhanced intra-African trade and investment as a fundamental instrument to achieve industrialization and sustainable development.[3] This would be achieved through the elimination of tariffs and non-tariff barriers (NTBs) in intra-African trade and improving the overall business climate in Africa.[4] AfCFTA will result in gross domestic product (GDP) of over USD 2.5 trillion, covering a market of 1.2 billion people across 55 Member States of the AU.[5] AfCFTA recognizes the Regional Economic Communities (RECs) as the building blocks for continent-wide integration in line with the historical efforts of the 1980 Lagos Action Plan and the transitional plan of the AU articulated in the 1991 Abuja Treaty establishing the African Economic Community (Abuja Treaty).[6] Accordingly, AfCFTA charges contracting parties that are members of other RECs, regional trading arrangements, and customs unions, which have attained among themselves higher levels of elimination of customs duties and trade barriers than those provided for under the Protocol, to continue maintaining this, and where possible improve upon, existing higher levels of trade liberalization among themselves.[7] Thus, AfCFTA employs both the bottom-up and the top-down approaches in origination and observance of rules to achieve its objectives.
In line with the existing regional trade agreements, AfCFTA utilizes dispute settlement frameworks governed by the Protocol on Rules and Procedures on the Settlement of Disputes (PRPSD) to settle underlying disputes.[8] Broadly speaking, AfCFTA dispute settlement frameworks replicate the approaches of the existing regional trade agreements and the world trade organization (WTO) procedures. Accordingly, it is characterized by three main stages in the dispute settlement process, namely: (a) consultations between the parties and preliminary efforts to settle the disputes; (b) panels and, if applicable, appellate body processes; and (c) the implementation of the ruling including the possibility of countermeasures if there is a failure by the losing party to implement the ruling. Also, dispute settlement extends to consultations, good offices, conciliation or mediation, and arbitration.
These dispute settlement procedures apply subject to such special and additional rules and procedures on dispute settlement contained in the Agreement.[9] To the extent that there is a difference between the rules and procedures and the special or additional rules and procedures in the Agreement, the special or additional rules and procedures shall prevail.[10] In essence, Article 3(2) of the PRPSD principally subjects the WTO-style dispute settlement of AfCFTA frameworks involving the panel and appellate processes (including conciliation and arbitrations) to special or additional rules and procedures. These special or additional rules and procedures have been under-explored in the analytical exploration of AfCFTA dispute settlement frameworks. Consequently, this article seeks to fill the gap by exploring the framework of special or additional rules and procedures under the AfCFTA, its potentials, possibility of difficulties and prospects for the future. Arguably, the capacity of the dispute settlement framework to promote the realization of sustainable development and other extant objectives of AfCFTA is predicated on implementing modalities that make it responsible, responsive and efficient.
The article is divided into five sections. Apart from the introduction above, section two assesses AfCFTA and the special dispute framework within the overall context of the traditional dispute settlement framework. Section three examines the framework for the resolution of issues arising from non-tariff measures and NTBs. Section four explores the modalities for the successful operation of the special framework. Section five offers concluding remarks.
1.2 AfCFTA and Special Dispute Framework
AfCFTA dispute settlement is defined by two main frameworks: the traditional framework involving the preliminary processes in dispute settlement (conciliation and use of good offices), panel state and appellate stage, arbitration, and enforcement; and non-judicial (or quasi-judicial) procedure for the resolution of issues.[11] While efforts are been devoted to the analysis of the traditional frameworks of dispute resolution, the quasi-judicial procedure for the resolution of non-tariff measures and/or NTBs and its interrelationship with sustainable development have been largely under-explored.
Indeed, Article 3(2) of PRPSD, following treaty practice, states that the PRPSD ‘shall apply subject to such special and additional rules and procedures on dispute settlement contained in the Agreement’. In the event of a difference between the PRPSD and the special or additional rules and procedures, the latter shall prevail. [12] Such a ‘difference’ or conflict between the PRPSD and the special or additional rules and procedures would exist only where both provisions cannot be read as being complementary to each other because they are mutually inconsistent such that adherence to one provision would lead to a violation of the other provision.[13]
Clearly, the pre-eminence of ‘the special or additional rules and procedures’ in the covered agreements (and the right of the state parties to ‘invoke another forum for dispute settlement’)[14] over the dispute settlement framework established under PRPSD indicate that the operation of PRPSD is not overarching. Although the PRPSD does not provide any clue as to the contents of the ‘special or additional rules and procedures in the Agreement’ as is the case with Appendix 2 of the dispute settlement understanding (DSU), they are understood to cover dispute resolutions concerning non-tariff measures (such as SPS and TBT), trade remedies (such as anti-dumping and countervailing measures), and other special rules as may be provided by the covered agreements.[15] These specific rules and procedures are designed to deal with the particularities of disputes under a specific covered agreement. For instance, Annex 5 of the AfCFTA Agreement on NTB provides a number of non-judicial mechanisms, including an independent expert or person agreed upon by the parties in addition to the AfCFTA NTB Coordination Unit, which will be responsible for the resolution and elimination of NTBs.
Article 3(4) of PRPSD, reinforcing the provision of Article 3(2) of PRPSD, provides that ‘[a] State Party which has invoked the rules and procedures of this Protocol with regards to a specific matter, shall not invoke another forum for dispute settlement on the same matter’.[16] The reference to ‘another forum for dispute settlement’ entails that the AfCFTA dispute settlement framework does not have exclusive jurisdiction over AfCFTA matters. This approach is reflected in several treat-making practices of free trade agreements (FTAs) and regional integration arrangements.[17] The Association of Southeast Asian Nations (ASEAN) Protocol on Enhanced Dispute Settlement Mechanism is emphatic on the right of ASEAN members to choose another forum, if they wish, instead of the frameworks established under the Protocol. Hence, the ASEAN state party involved in a dispute can resort to other fora at any stage before a party has made a request to the Senior Economic Officials Meeting to establish a panel.[18] Thus, state parties are expected to utilize ‘the special or additional rules and procedures in the Agreement’ to manage disputes arising from non-tariff measures and/or NTBs.
1.3 NTBs Frameworks and Resolution Mechanism
AfCFTA provides a mechanism for the identification, categorization and progressive elimination of NTBs in intra-African trade to ensure the realization of set objectives. Hence, such mechanism principally functions through the provision for (a) institutional structures for the elimination of NTBs; (b) general categorisation of NTBs in the AfCFTA; (c) reporting and monitoring tools; and (d) facilitation of resolution of identified NTBs.[19] These frameworks and procedures, which largely mirror regional integration norms of the East and Southern African countries (e.g. SADC, EAC, COMESA and Tripartite Free Trade Agreement), are intended to achieve timeous and efficient elimination of NTBs to hasten intra-African trade and sustainable development.
1.4 Institutional Structures for the Elimination of NTBs
The institutional structures for the elimination of NTBs operate at both the national level and AfCFTA secretariat level, each complementing the role of the other. At the secretariat level, Article 31 of the Protocol on Trade in Goods (PTG) mandates the Committee on Trade in Goods to establish a Sub-Committee on NTBs.[20] This Sub-Committee is composed of duly designated representatives from State Parties and is expected to carry out the responsibilities assigned to it under Annex 5 on NTBs and/or by the Committee on Trade in Goods. The NTB Sub-Committee have the responsibility for (a) the development of working procedures for the implementation of Annex 5 on NTBs; (b) monitoring the implementation of Annex 5 with a view to facilitating periodic review of the Annex and the NTBs mechanism to enhance the elimination of NTBs in the AfCFTA; and (c) any other NTB -related activities.[21] The Secretariat in liaison with the NTB Sub-Committee, establishes the NTB Coordination Unit for the coordination of NTBs elimination. The main function of the NTB Coordination Unit is to coordinate the elimination of NTBs working together with the NTB Sub-Committee, National Focal Points and RECs NTB Units and any other forum working in the same area.[22]
At the national level, the State Parties have the responsibility to: (a) establish National Monitoring Committees and National Focal Points on NTBs; and (b) provide names and addresses of designated National Focal Points to the Secretariat for circulation to States Parties. The National Monitoring Committees and the National Focal Points together form part of the Institutional Structures at the National level for the Elimination of NTBs.
The National Monitoring Committee are responsible for: (a) identifying, resolving and monitoring NTBs; (b) defining the process of elimination; (c) confirming deadlines for action; (d) agreeing on recourse due to non-action; (e) defining the mandate and responsibilities of NTB institutional structures; (f) providing clear guidelines to the business community for the resolution of identified NTBs ; and (g) any other related activities.[23]
The National Monitoring Committee is composed of relevant stakeholders representing the private and public sectors. Thus, where a reported measure has been identified as NTB, but has not been resolved, the National Monitoring Committee shall proceed to include it in the Time Bound Elimination Matrix for further action or resolution as provided for under Article 13 of Annex 5 on NTBs. [24]
The National Focal Points on NTBs are saddled with the duties of (a) coordinating the implementation of the AfCFTA mechanism for the elimination of NTBs; (b) providing secretariat services to the National Monitoring Committee; (c) facilitating the removal of NTBs and reporting on their elimination; (d) tracking and monitoring NTBs through utilization of the reporting tools; (e) providing clear guidelines to the business community on the areas identified as NTBs; (f) sensitizing stakeholders on the monitoring and evaluation mechanism and NTBs reporting tools; (g) submitting reports to the Secretariat, on identified and/or resolved NTBs, for record purposes; (h) providing assistance to the Facilitator in the process of resolving NTBs as necessary; and (i) any other related activities.[25]
1.5 General Categorization of NTBs
Article 3 of Annex 5 on NTBs provides a non-exhaustive list of general categorisation of NTBs, which is strengthened and expanded by the accompanying Appendix 1.[26] The general categorisation of NTBs does not determine the legitimacy, adequacy, necessity or discrimination of any form of policy intervention used in international trade, and it does not prejudice the rights and obligations of State Parties under the WTO Agreements. In order to ensure that this general categorisation, sub-categories and sub-classifications evolve and adapt to the changing reality of international trade and data collection needs, the State Parties, through the Secretariat, may propose changes for consideration and concurrence by other State Parties. As adumbrated in the next sub-section under the ‘Reporting and monitoring tools’, there are diverse levels of reporting and monitoring of NTBs supplemented by the ‘Facilitation of resolution of identified NTBs’ to ensure maximum efficiency in the elimination of NTBs.
The upcoming segment of Collins Ajibo’s analysis is scheduled for publication on this blog next Friday.
[1] Collins C. Ajibo, African Continental Free Trade Area Agreement: Legal and Policy Frameworks (London: Routledge, 2024).
[2] Chidebe M Nwankwo and Collins C. Ajibo, ‘Liberalizing Regional Trade Regimes through AfCFTA: Challenges and Opportunities’ (2020) 64(3) Journal of African Law 297.
[3] Collins C. Ajibo, ‘African Continental Free Trade Area Agreement: the Euphoria, Pitfalls and Prospects’ (2019) 53(5) Journal of World Trade 871.
[4] Kenji Omi and Oluimo Da Silva, ‘Implementation of the WCO Time Release Study to Mitigate Non-tariff Barriers in AfCFTA: Lessons to Be Learned by Africa’ (2021) 16(11/12) Global Trade and Customs Journal 572.
[5] International Monetary Fund, ‘The African Continental Free Trade Agreement: Welfare Gains Estimates from a General Equilibrium Model’ (2019) IMF Working Papers, https://scholar.google.com/scholar?start=10&q=African+continental+free+trade+agreements&hl=en&as_sdt=0,5, accessed 18 November 2023.
[6] Collins C. Ajibo, Chidebe M. Nwankwo and Eghosa E Ekhator, ‘Regional Economic Communities as the Building Blocs of the African Continental Free Trade Area Agreement’ (2021) 18(4) Transnational Dispute Management 1.
[7] Article 19 of AfCFTA Agreement.
[8] Emilia Onyema, ‘Reimagining the Framework for Resolving Intra-African Commercial Disputes in the Context of the African Continental Free Trade Area Agreement’ (2019) World Trade Review.
[9] Article 3(2) of PRPSD.
[10] Article 3(2) of PRPSD.
[11] K Kugler, ‘The AfCFTA’s Success Depends on Effective Dispute Settlement Mechanisms for the Private Sector’ (2021) Global Trade and Customs Journal.
[12] Article 3 of PRPSD.
[13] Appellate Body Report, Guatemala — Cement I, paras. 65 and 66.
[14] Article 3(4) of PRPSD.
[15] Article 14 of Annex on Trade Remedies. Article 6.8(3) of CPTPP completely excludes the application of dispute settlement provisions to matters concerning antidumping and countervailing duties.
[16] This contrasts with the WTO approach which provides under Article 23(1) of the WTO’s DSU that it is the sole forum for the authoritative determination of disputes among WTO members.
[17] Article 28.4 of CPTPP, Article 29.3 of CETA and Article 20.4 of US-Morocco FTA which allow these forms of alternatives in the choice of dispute settlement forum.
[18] Article 1(3) of ASEAN Protocol on Enhanced Dispute Settlement Mechanism.
[19] Article 2 of Annex on NTBs.
[20] Article 4 of Annex 5 on NTBs.
[21] Article 5 of Annex 5 on NTBs.
[22] Article 7 of Annex 5 on NTBs.
[23] Article 8 of Annex 5 on NTBs.
[24] Article 8 of Annex 5 on NTBs.
[25] Article 9 of Annex 5 on NTBs.
[26] Article 3 of Annex 5 and accompanying appendix 1 list of NTBs include: government participation in trade and restrictive practices tolerated by Governments; (b) customs and administrative entry procedures; (c) technical Barriers to Trade; (d) sanitary and phytosanitary measures; (e) specific limitations; and (f) charges on imports and other (e.g. transport, clearing and forwarding).
