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Where does the AfCFTA Process stand and what happens next?


Where does the AfCFTA Process stand and what happens next?

Where does the AfCFTA Process stand and what happens next?

African leaders held an Extraordinary Summit on the African Continental Free Trade Area (AfCFTA) from 17-21 March 2018 in Kigali, Rwanda, during which the Agreement establishing the AfCFTA was presented for signature, along with the Kigali Declaration and the Protocol on Free Movement of Persons, Right to Residence and Right to Establishment. In total, 44 out of the 55 AU member states signed the consolidated text of the AfCFTA Agreement, 47 signed the Kigali Declaration and 30 signed the Protocol on Free Movement.

Additionally, five countries signed the AfCFTA Agreement during the 31st Ordinary Session of the AU Assembly in Mauritania on 1 July 2018 – South Africa, Sierra Leone, Lesotho, Burundi, and Namibia – bringing the total number of signatories to 49. Twenty-two (22) ratifications are required for the Agreement to enter into force.[1] The African Union Commission hopes that the required number of ratifications will be deposited by March 2019.

To date, nine countries have deposited their instruments of AfCFTA ratification with the Chairperson of the AU Commission: Ghana, Kenya, Rwanda, Niger, Chad, Guinea, eSwatini (former Swaziland), Uganda, and Ivory Coast. South Africa, Sierra Leone, Mali, Namibia, Senegal, Congo, Togo, Mauritania and Djibouti have received parliamentary approval for ratification, bringing the total number of ratifications (deposited and pending) to 18.[2] This is only four short of the 22 ratifications required for the AfCFTA to enter into force.

All indications are that the required number of ratifications will soon be reached; there is considerable diplomatic momentum behind this process. What are the implications?

When an international agreement has entered into force it binds only those states that have consented to be bound by it. An international agreement is not like national legislation which, once in force, applies to all to whom it is directed.[3] States are sovereign and cannot be bound by treaties to which they have not consented.

In the case of the AfCFTA consent is expressed by depositing an instrument of ratification with the depositary. The depositary for the AfCFTA legal instruments is the Chairperson of the AUC.[4]

Article 23(1) of the AfCFTA Agreement provides:

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. (Emphasis added.)

Those African countries which have not deposited instruments of ratification by the date of entry into force of the AfCFTA, will not be Parties (called State Parties[5]) to this Agreement and will not be bound by it. If a country such as Nigeria e.g. falls in this category, it will not give preferential treatment to goods or services exported to it by those African States which are Parties to the AfCFTA. The opposite is also true. There are other international agreements governing such trade, like the trade protocols of the Regional Economic Communities (RECs) or the rules of the WTO. Most African countries are WTO members.

The depositary must announce the date and time when the AfCFTA enters into force. This is normally done by notifying the Parties and other states concerned by a formal note. If there are doubts whether the conditions for entry into force have been met, the depositary may have to consult the interested states. [6] In this case, the “interested states” are all the AU Members.

Once an international agreement has entered into force, it must be given effect to by the Parties thereto. Can it be expected that from early in 2019 (apparently from the beginning of May 2019) goods and services can, among the State Parties, be traded under the new preferential rates and market access provisions of the AfCFTA? This will not be possible, for the simple reason that the Protocols on Trade in Goods and Trade in Services are still being negotiated. There are no tariff schedules, no Annex on rules of origin, nor rules for specific services sectors to regulate such trade. And it may take quite some time before they will be finalized. These are sensitive and technically complicated matters; especially when 55 countries at very different levels of economic development are involved.

This state of affairs calls for the following observations:

  • The benefits of the AfCFTA have been actively sold by the AU leadership during the preceding negotiations. Expectations are high. The disappointment of the private sector (the real traders and investors) when they cannot reap the promised benefits, should be carefully managed. An impression that the AfCFTA is more about a political process than real outcomes will undermine its legitimacy.

  • It is not impossible that importers and exporters will actively pursue alternative options for preferential trade; under bilateral deals or by advancing the opportunities under the Tripartite FTA. The latter is not in force but overlapping membership of the RECs (which continue to operate[7]) may provide ad hoc opportunities. Nothing prevents specific countries from putting in place the necessary arrangements, even on a bilateral basis.[8] They could design clever deals on “provisional application” too. Since the Trade in Goods and Services Protocols are outstanding, these countries (even those who are State Parties) will not violate any AfCFTA obligations. There will not be any binding obligations on how to conduct trade in goods and services under the AfCFTA as long as the relevant commitments remain outstanding.

  • Who will participate in the negotiations to complete Phase I of the AfCFTA? The text of the Agreement does not deal with this question – Article 23 was drafted at a time when it was believed that the normal procedure would be followed, and all negotiations would have been concluded before ratifications would be deposited. All AU Members (including those still to ratify or accede) are entitled to participate in these negotiations because the AfCFTA is an AU initiative. The negotiations for concluding AfCFTA legal instruments have been launched on the basis of AU decisions, which may be invoked for the purpose of arguing that the AfCFTA negotiations constitute an inclusive process.

  • The AfCFTA process seems to be in need of a preparatory commission (prepcom). This type of arrangement is often used when a treaty establishes an international body which must be able to start its work once the founding instrument enters into force.[9]It is usually a body composed of all the negotiating or signatory states, entrusted with the task of making the necessary arrangements for when the treaty enters into force.”[10] Since the implementation of the AfCFTA will face serious uncertainties, such a device may be inevitable; even if established ex post facto.

[1] Art 23 pdf AfCFTA Agreement (legally scrubbed version) (4.67 MB)

[2] See https://www.tralac.org/resources/infographics/13795-status-of-afcfta-ratification.html.

[3] Aust, Modern Treaty Law and Practice, 3rd edition, Cambridge University Press, 2013 at 145.

[4] Art 24 AfCFTA Agreement.

[5] They are defined as AU Member States that have “ratified or acceded to this Agreement and for which the Agreement is in force”.

[6] Aust at 152.

[7] Art 19 of the AfCFTA expressly so provides.

[8] The “reciprocal benefits” mentioned in Art 18 may now gain a new meaning.

[9] It has been used for the GATT, Law of the Sea Convention of 1982 and the International Criminal Court. See further Aust at 156 et seq.

[10] Aust at 156.

About the Author(s)

Gerhard Erasmus

Gerhard Erasmus is a founder of tralac and Professor Emeritus (Law Faculty), University of Stellenbosch. He holds degrees from the University of the Free State, Bloemfontein (B.Iuris, LL.B), Leiden in the Netherlands (LLD) and a Master’s from the Fletcher School of Law and Diplomacy. He has consulted for governments, the private sector and regional organisations in southern Africa. He has also been involved in the drafting of the South African and Namibian constitutions. He grew up in Namibia.

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