Login

Register




Building capacity to help Africa trade better

When the absence of legal certainty is a new NTB

Discussions

When the absence of legal certainty is a new NTB

Gerhard Erasmus, tralac Associate, discusses why the absence of legal certainty in trade agreements has become a new non-tariff barrier

Non-tariff barriers (NTBs) have a major impact on the cost of doing business in Africa. The Regional Economic Communities (RECs) and the Tripartite Free Trade Area (TFTA) recognise the challenge and they respond by listing the elimination of these barriers as a priority concern. The same happens on the multilateral level. In 2014 the new Trade Facilitation Agreement of the WTO entered into force.

These are high level activities involving protracted negotiations and signing ceremonies; which will hopefully lead to tangible results. The latter will only come about if these agreements are implemented and obligations are respected. This is unfortunately not happening with regard to the most basic and practical needs of traders and firms doing business in the SADC region in particular. We are referring to the need for legal certainty.

We would like to argue that a new and pernicious NTB should be added to the list of traditional ones (unreasonable product standards, occupational safety and health regulations, restrictive licenses, product classification, import bans, lengthy customs procedures etc.). The denial of the rights of private firms and traders and the absence of remedies have grown to the point where the condition should be recognised for what it has become; another regional NTB. By officially putting it on this “list” there will hopefully be renewed efforts to tackle the problem. Our new candidate has, after all, the same effect as more traditional NTBs, which are “restrictions that result from prohibitions, conditions, or specific market requirements that make importation or exportation of products difficult and/or costly”.* (Emphasis added.)

The complaints by private firms and freighters about the extent to which SADC legal instruments are simply disregarded, in particular at Beit Bridge, are increasing on a daily basis. It has become accepted practice to ignore documentary evidence about binding schedules and other aspects of the SADC Protocol on Trade. Private parties desperate to get goods across borders simply have “to make a plan”. 

The fact that these obligations are contained in international agreements creates additional complications. The relevant legal instruments are treaties which apply between and not in the participating States. Ultimately most of the NTBs involve a decision or act by a specific government official, exercising a discretion under enabling legislation. If the applicable international agreement has not been domesticated or the relevant principles are not part of the domestic legislative framework, the responsible officials will not take them into account when making their decisions. It is the responsibility of the member governments to rectify this state of affairs. They should make such obligations part of the law of the land – in order to give effect to the duties which they have accepted when they ratified the Protocols in question. And they should do so in unambiguous terms.

NTBs impact primarily on a right or freedom of a private party; whether a natural or legal person. Should the same action occur in the national domain the municipal administrative law system (and often the national constitution) will, in a rule of law environment, provide for enforceable rights and procedures which affected parties can invoke against officials acting outside the scope of their powers or beyond the applicable legal boundaries. Transparency is guaranteed by such systems.

The present state of affairs in SADC highlights the urgent need for legal certainty and for an effective dispute settlement system to assist private parties. This requires a new debate and a shift away from the local belief that trade is the exclusive concern of governments. Under that approach only states can lodge complaints when provisions in trade agreements are violated. But governments don’t trade. Our Governments, in addition, never litigate against each other over trade issues. They do not come to the rescue of private firms of their nationality when border officials of a neighbouring state fail to comply with the most basic of rules. That is why the new Protocol on the SADC Tribunal is such a disappointment; it will only hear inter-state disputes.

Is there an alternative route? Ideally there should be remedies akin to national judicial review. It does not seem as if we will get that soon. Eventually the Member States will have to step in and rescue SADC. And it should be made easier for them to start doing so through a dispute settlement system. They could start by activating Annex VI of the SADC Protocol on Trade, a panel procedure. It has been adopted several years ago and is an inter-state procedure of a particular kind. By moving the focus to trade experts and away from high politics our governments might begin to accept that certainty about the law (even when reached through litigation about commercial issues) is an advantage. It is not an affront to sovereignty.

This will not solve the problems of traders and freighters overnight. It will however, begin to set precedents. They should become part of SADC’s community law and be integrated into the practice of its operations.

The alternative is for private parties with the necessary standing to litigate before those national courts where remedies will be available. There have recently been such cases in Mauritius, Namibia and in South Africa. This will be another slow process but has some advantages over inter-state proceedings. And it will add to the understanding that a rules-based trade arrangement is eventually vastly superior to the present state of affairs.

.


* This description comes from the documentation prepared for the TFTA negotiations. http://www.tradebarriers.org/ntb/non_tariff_barriers.

Contact

Email This email address is being protected from spambots. You need JavaScript enabled to view it.
Tel +27 21 880 2010