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Dispute Settlement, Sustainable Development and AfCFTA: A Scoping Analysis – Part 2

This succeeding discourse builds upon the inaugural blog post last week by Collins Ajibo, wherein he delved into the historical import and objectives underpinning the African Continental Free Trade Area (AfCFTA). The preliminary discussion illuminated AfCFTA’s pivotal role in propelling pan-African industrialization and sustainable development, primarily achieved through the augmentation of intra-African trade and investment. In the sequel, denominated Part 2 of this comprehensive analysis, Ajibo meticulously dissects the intricate dispute resolution mechanisms within AfCFTA. Significantly, he directs the spotlight towards the reporting and monitoring tools designed for addressing Non-Tariff Barriers (NTBs).

1.3.3 Reporting and Monitoring Tools

The reporting and monitoring tools for NTBs constitute the third sub-section under the section on the ‘NTBs Frameworks and Resolution Mechanism’ following the ‘Institutional structures for the elimination of NTBs’ and the ‘General categorization of NTBs’ respectively. The reporting and monitoring tools occur at the national, RECs and AfCFTA levels through the frameworks of the National Monitoring Committee and National Focal Points on NTBs; RECs level; and NTB Sub-Committee. The existence of National Monitoring Committees and National Focal Points on NTBs requires the state parties’ action at the national level (e.g. setting it up and operational efficiency). As regards the RECs, they have an obligation to establish or strengthen NTB monitoring mechanisms responsible for: (a) tracking and monitoring NTBs affecting intra-African trade and updating regional and national plans for the elimination of NTBs; and (b) capacity building and sensitization of stakeholders on the reporting, monitoring and evaluation tools such as the web-based system. To achieve coordination and efficiency, the RECs Working closely with the NTB Sub-Committee, RECs NTB Units and National Focal Points shall ensure timely and effective resolution of identified NTBs. The RECs shall cooperate in resolving identified NTBs with a view to facilitating trade. Indeed, the RECs NTB Monitoring mechanisms are expected to work in support of the NTB Coordination Unit at the AfCFTA Secretariat in the resolution of inter-REC NTBs.[1]

At the AfCFTA secretariat level, there are evolving mechanisms for identifying, reporting, resolving, monitoring and eliminating NTBs. Any State Party or Economic Operator may register a complaint or trade concern through the mechanisms provided for it. State Parties are encouraged to resolve NTBs raised at the intra-REC level using the resolution mechanisms in place in each REC. The mechanisms address NTBs that have not been resolved at the REC level, are inter-REC in nature, or are arising from State Parties that are not members of any REC. The NTB mechanisms shall enhance transparency and provide for easy follow-up on progress in the resolution of reported and identified NTBs. The reporting and monitoring tools for NTBs shall consist of a prescribed format, forms, online or any other information, communication and technology tools which will be subject to periodic review and shall be available on websites as designated by the NTBs Sub Committee.[2] Moreover, each State Party shall prepare a Time Bound Elimination Matrix, based on the agreed categorization of NTBs and their level of impact on intra-African trade.

1.3.4 Facilitation of Resolution of Identified NTBs

Article 11 of Annex 5 on NTBs outlines the procedure for elimination and cooperation in the elimination of NTBs. Hence, AfCFTA State Parties shall exhaust existing NTB elimination channels at the REC level before escalating a complaint or trade concern to the AfCFTA level. Where State Parties fail to reach an agreement on the resolution of a complaint using REC-based NTB mechanism, or the complaint has arisen from inter-REC trade, the State Parties are regulated by Stages I and II of the dispute resolution process.

Stage I: Request and Response on a Specific NTB

Any State Party (the ‘requesting State Party’) may, individually or jointly with other States Parties, initiate the Stage I process by submitting in writing or through an agreed online information and communication technology method or any other method, to another State Party (the ‘responding State Party’) and the Secretariat a request for information regarding NTB as identified and reported by the requesting State Party. The request shall identify and describe the specific NTB as identified and reported by the requesting State Party and provide a detailed description of its concerns regarding the NTB’s impact on trade. The responding State Party shall acknowledge and provide to the requesting State Party, within 20 days following receipt of the request, a written response containing all the information and clarification requested. Where the responding State Party considers that a response within this period is not practicable, it shall inform the requesting State Party of the reasons for the delay, together with an estimate of the period within which it will provide its response. In all cases, it shall not exceed 30 days from the date of receiving the request for information unless the parties mutually agree to extend the days. The responding State Party shall notify its response directly to the requesting State Party and the Secretariat for recording purposes. The Secretariat shall undertake to ensure that the responding and the requesting State Parties adhere to the provisions indicated in Stage I.

Where the response is acceptable to the requesting State Party, the requesting State Party shall notify the responding State Party and the Secretariat, and the complaint shall be considered resolved. Where the parties mutually agree on a complaint as being an NTB, the National Monitoring Committee of the responding State Party shall develop an elimination plan as provided. Where the response does not resolve the complaint, the requesting State Party shall notify the responding State Party and the Secretariat. The Secretariat shall convene a meeting with the parties within 20 days from the date of receiving the notification to address the outstanding complaint. In case the matter is not satisfactorily resolved in the Stage I process, both parties shall, by mutual consent and through a written and signed agreement, proceed to Stage II.

Any other State Party may submit a written request to the Secretariat to participate in these procedures as an interested party within 10 days from the date of circulation of the decision to proceed to Stage II. Pending the final resolution of the NTB, the parties may consider possible interim solutions, especially if the NTB relates to perishable goods. In case of perishable goods, the issue shall be dealt with within 10 days. Once initiated, Stage I shall be terminated upon request of either party; and Stage I proceedings shall not exceed a total of 60 days unless otherwise mutually agreed by the parties.

Stage II: Use of a Facilitator to Resolve Complaints

Appointment of a Facilitator: Upon initiation of Stage II of these procedures, the Secretariat shall coordinate the appointment of an independent expert/person acceptable to the parties to serve as Facilitator. The Facilitators shall be drawn from a pool of experts whose selection and appointment shall be in accordance with agreed criteria and procedures developed by the NTBs Sub-Committee. The parties shall jointly agree on the terms of reference for the Facilitator; and upon initiation of this Stage II, the parties shall agree upon the Facilitator within 10 days.

Seeking Mutually Agreed Solutions: Either party shall present to the Facilitator and the other party any information that it deems relevant.The Facilitator, in consultation with the parties, shall have full flexibility in organizing and conducting the deliberations under these procedures, which normally should take place at the Secretariat Headquarters, unless the parties agree on any other place of mutual convenience, taking into account the possible capacity constraints. In assisting the parties, in an impartial and transparent manner with a view to bringing clarity on the NTB concerned and its possible trade-related impact, the Facilitator may: (i) with the support of the NTB Sub Committee, call upon the Secretariat or any other relevant resource to provide the Facilitator with any requested information; (ii) meet individually or jointly with, the parties, in order to facilitate discussions on the NTB and to assist in reaching mutually agreed solutions; (iii) seek assistance where necessary, of relevant experts and stakeholders, after consulting with the parties; (iv) provide any additional support requested by the parties; and (v) offer advice and propose possible solutions for the parties provided any such opinion shall not pertain to any possible legitimate objectives for the maintenance of the measure. The parties shall engage each other with a view to reaching a mutually agreed solution within 45 days from the commencement of the proceedings in Stage II.

Outcome and Implementation: Upon termination of Stage II of these procedures by a party, or in the event that the parties reach a mutually agreed solution, the Facilitator shall, within 10 days, issue to the parties in writing, a draft factual report providing a brief summary of the following:(i) the NTB at issue in these procedures;(ii) the procedures followed;(iii) any mutually agreed solution as the final outcome of these procedures, including possible interim solutions; and(iv) any areas of disagreement shall be recorded by the parties.

The Facilitator shall provide the parties 10 days within which to comment on the draft report. After considering the comments of the parties, the Facilitator shall submit, in writing, a final factual report to both parties and the Secretariat within 10 days of receiving the comments. If the parties reach a mutually agreed solution, such a solution shall be implemented and also circulated to all State Parties through the Secretariat. Such a solution shall be implemented in accordance with an elimination plan as provided.

Where a State Party fails to resolve an NTB after a factual report has been issued, and a mutually agreed solution has been reached, the requesting State Party may resort to the dispute settlement stage. Notwithstanding the provisions herein, parties may agree to submit the matter to arbitration in accordance with the provisions of the Protocol on the Rules and Procedures on the Settlement of Disputes.

Confidentiality: All meetings and information, whether provided in oral or written form acquired pursuant to Stages I and II of the procedures, shall be confidential and without prejudice to the rights of any party or other State Party in any dispute settlement proceeding under the Dispute Settlement procedures. The obligation of confidentiality does not extend to factual information already existing in the public domain. Nothing shall require State Parties to disclose confidential information, which would impede law enforcement or otherwise be contrary to the public interest or would prejudice the legitimate commercial interests of particular enterprises, public or private. Any third party admitted to the procedures shall be bound by the confidentiality requirements pursuant to these procedures.

Certainly, there are online NTB reporting, monitoring and eliminating mechanisms to enhance trade.[3] A concerned party can report any obstacle encountered, at https://tradebarriers.africa, when engaged in intra-African trade, such as excessive delays, charges at the border, cumbersome document requirements, and restrictive product standards and regulations.[4] On the lodging of a report on the existence of NTBs, the concerned government authorities will follow-up the matter to resolve the problem. The NTBs Coordination Unit in the AfCFTA Secretariat, the NTB Units in the REC, and the NTB National Focal Points in the country of the reporter coordinate their activities to process the matter and resolve the NTBs.[5] This online mechanism is available to all African businesses, including Micro, Small and Medium-sized Enterprises (MSMEs), informal traders, business operators and large companies. [6] 

Indeed, the fundamental concerns in the use of special or additional rules and procedures, in the context of intra-African trade, to settle NTB disputes is the peculiarity of capacity constraints, political will and weak institutions. There are credible concerns that the operational efficiencies of such a dispute settlement framework would be shaped by the same factors that have constantly stultified sustainable development in Africa. Consequently, a number of recommendations are proffered.

1.4 Modalities for the Successful Operation of the Special Framework

There should be robust and effective modalities for the successful operation of the special framework if NTBs are to be eliminated in intra-African trade. In the first place, the framework for the resolution of issues arising from non-tariff measures and/or NTBs should be defined by speed and dispatch. A timely resolution of NTBs will enhance the appeal and usability of the framework. Besides, the speedy resolution of matters pertaining to perishable goods deepens trust and confidence in cross-border trade in this sphere. Likewise, settlement of disputes with dispatch limits the wasting of perishable goods in transit. Moreover, the framework should inspire usability and accessibility for traders, investors and business enterprises. Hence, the procedures and processes for initiating complaints, proceedings and enforcement should be as simple, accessible and attractive as possible otherwise, users will decline to use them. Alternatively, they utilize it, but the underlying inefficiency will frustrate rather than foster an increased volume of intra-African trade. Furthermore, the framework should inspire confidence in the users and workability. If there is a suspicion that the process is not transparent and devoid of accountability, it would constitute a disincentive for users. Hence, the process should be objective, transparent and responsive to the needs of the users. Also, the dispute settlement process should request technical assistance and capacity building from the Secretariat or, where necessary, the Secretariats of the RECs to promote their understanding of the use and functioning of the procedures. Where capacity building is not possible through the Secretariat, efforts should be made to get the same from external partners (e.g. multilateral institutions). Finally, the rulings and conclusions of the special framework should be timeously implemented. If the users are unable to obtain an implementation of rulings and/or decisions reached, they may desist from further utilization of the framework. Arguably, the implementation of these recommendations is fundamental to the successful operation of the special framework for the resolution of NTBs with a view to the realization of sustainable development.

1.5 Conclusion

AfCFTA dispute settlement framework is characterized by three main stages, 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. Broadly speaking, the AfCFTA dispute settlement framework 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. The success of non-judicial (or quasi-judicial) procedures would be dependent on balancing the delicate objectives that respond to the needs of businesses, as well as the faithful and timeous implementation of covered regime, and ultimate realization of sustainable development.


[1] Article 10 of Annex 5 on NTBs.

[2] Article 12 of Annex 5 on NTBs.

[3] AfCFTA, ‘African Continental Free Trade Area: Non-Tariff Barriers – Reporting, Monitoring and Eliminating Mechanism’ https://www.tradebarriers.africa/, accessed 18 November 2023.

[4] AfCFTA, ‘African Continental Free Trade Area: Non-Tariff Barriers – Reporting, Monitoring and Eliminating Mechanism’ https://www.tradebarriers.africa/, accessed 18 November 2023.

[5] AfCFTA, ‘African Continental Free Trade Area: Non-Tariff Barriers – Reporting, Monitoring and Eliminating Mechanism’ https://www.tradebarriers.africa/, accessed 18 November 2023.

[6] AfCFTA, ‘African Continental Free Trade Area: Non-Tariff Barriers – Reporting, Monitoring and Eliminating Mechanism’ https://www.tradebarriers.africa/, accessed 18 November 2023.

Author

  • Dr Collins C. Ajibo

    Dr Collins Chikodili Ajibo holds a PhD and LLM from the University of Manchester, United Kingdom. He is a Georg Forster Research Fellow, currently hosted at the Chair of African Legal Studies at the University of Bayreuth, Germany. This research is funded by the Alexander von Humboldt Foundation, Germany, as part of the Georg Forster Research Fellowship for Experienced Researchers awarded to the author. The author is solely responsible for the opinion expressed here and not the Alexander von Humboldt Foundation.

By Dr Collins C. Ajibo

Dr Collins Chikodili Ajibo holds a PhD and LLM from the University of Manchester, United Kingdom. He is a Georg Forster Research Fellow, currently hosted at the Chair of African Legal Studies at the University of Bayreuth, Germany. This research is funded by the Alexander von Humboldt Foundation, Germany, as part of the Georg Forster Research Fellowship for Experienced Researchers awarded to the author. The author is solely responsible for the opinion expressed here and not the Alexander von Humboldt Foundation.

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