The implementation of
international agreements is about achieving the objectives agreed upon. For
trade agreements implementation is ultimately about ensuring active private
sector participation.
Importers, exporters,
investors and service providers must be able to trade under improved conditions
and better rules so that consumes will benefit. Without the prospect of real
benefits, they will not invest in new cross-border commercial ventures.
Tariffs should be reduced
and procedures at intra-African borders must become easier and more transparent.
Domestic arrangements such as national tariff books and certification
procedures must be in line with the new inter-state undertakings.
How and when will this happen under the AfCFTA?
The AfCFTA Agreement and
the Protocols on trade in goods and services as well as dispute settlement have
been signed at the Extraordinary AU Summit in Kigali on 21 March 2018. This was
a widely reported diplomatic event. However, the Agreement is not yet in force;
it must first be ratified by 22 States, in terms of their national constitutional
requirements. And the negotiations (conducted in two phases) are still to be
completed; including tariff schedules, rules of origin and specifics on trade
in services as required for Phase I.
Implementation by the
State Parties starts once the new Agreement is in force. It is important to
understand what they are undertaking to do.
Article 4 of the Agreement
explains the nature of the new obligations: The State Parties shall progressively
eliminate tariffs and nontariff barriers to trade in goods; progressively
liberalise trade in services; cooperate on investment, intellectual property rights and competition policy; cooperate
on all trade-related areas; cooperate on customs matters and the implementation
of trade facilitation measures; establish a mechanism for the settlement of
disputes concerning their rights and obligations; and establish and maintain an
institutional framework for the implementation and administration of the AfCFTA.
(Emphasis added.)
The AfCFTA is not at a
standard Free Trade Area (FTA), which is limited to trade in goods. Its legal
instruments will, once in force, cover trade in goods, trade in services,
competition, investment and intellectual property rights.
This design reflects a sound
grasp of how trade is to be conducted under contemporary conditions. Services,
for example, are vital to ensure investment, transport, communications, customs
procedures and payments will facilitate new commercial initiatives.
However, the scope of the
implementation task also becomes more challenging. All the standard trade related
disciplines (e.g. customs administration, trade remedies, trade facilitation,
non-tariff barriers, standards, dispute settlement, domestic regulation of service
and investment etc) must become operational in order for the promised benefits
to materialize.
This will take time and
good domestic governance. In the meantime, these states will continue to trade
under the rules of existing Regional Economic Communities (RECs). Overlapping membership
challenges (e.g. different rules of origin and standards requirements) will
complicate matters for the private sector.
Implementation will
require a wide spectrum of follow-up action by the State Parties. New national
laws and institutions will be necessary. In the case of trade remedies
(anti-dumping, countervailing and safeguard measures), for example, investigating
authorities, legislative frameworks and judicial review procedures must exist.
Most African States do not presently have the
necessary arrangements in place.
An additional factor has
to be mentioned. Article 8(2) of the AfCFTA Agreement reads: The Protocols on
Trade in Goods, Trade in services, Investment, Intellectual Property Rights,
Competition Policy, Rules and Procedures on the Settlement of Disputes and
their associated Annexes and Appendices shall form part of the single
undertaking, subject to entry into force.
The single undertaking
aspect (a concept developed during the Uruguay Round of WTO negotiations) means
all negotiations should actually be concluded before new international legal
instruments are ratified. All State Parties are bound by the results of the
complete package. Ratification of the AfCFTA has already started. Six AU member
States have (as at 19 July 2018) ratified the AfCFTA. This can give rise to a
serious technical complication.
The complication is the
possibility of this Agreement entering into force before all outstanding
aspects for Phase I have been finalized. A work plan has been set for the
completion of all outstanding tasks in order for entry into force of the AfCFTA
to take place by January 2019.
It is possible that 22
instruments of ratification will be deposited before negotiations for Phase I
are completed. Entry into force will happen automatically once Article 23(1)
has been complied with: This Agreement and the Protocols on Trade in Goods,
Trade in Services, and Protocol on Rules and Procedures on the Settlement of
Disputes shall enter into force thirty (30) days after the deposit of the
twenty second (22nd) instrument of ratification.
The normal procedure is
that States complete all negotiations before they ratify new international
agreements. As sovereign States they must know what their future legal
obligations will entail. Their national constitutional rules may also require
the same.
Should the AfCFTA enter
into force before all outstanding Phase I matters have been finalized, technical
complications will follow. One of them will be about how the outstanding
negotiations will be completed. Only State Parties are bound by the new legal
instruments of the AfCFTA .
It would be counter to
the sovereignty of States to allow those AU Member which have not yet become
State Parties at that moment, to participate in the post entry into force
negotiations (for a legal instrument which has
technically entered into force) and to be involved in decisions on the outcomes
of new obligations in an agreement to which they are not Parties.
These matters should be
addressed soon. Article 18(5) of the Protocol on Trade in Services contains a
provision which may be used and be expanded to resolve these issues in advance:
The Transitional Implementation Work Programme developed by Member States shall
guide the finalisation of outstanding Phase I negotiations on this Protocol, before the entry into force of the
Agreement.
The implementation of the
AfCFTA should also be supported by preparatory work of the AU Commission and
its Department of Trade and Industry. This is an AU flagship initiative. It
merits a properly prepared launch into the world of actual implementation.
The enthusiasm behind
this initiative should not be dampened by delays and disappointment for those
who stand to benefit from implementation.
Article by: Gerhard Erasmus, a founder of Tralac and
Professor Emeritus (Law Faculty), University of Stellenbosch.
Article
originally appeared in: 
