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The AfCFTA: What enters into force now and what does it mean?


The AfCFTA: What enters into force now and what does it mean?

The AfCFTA: What enters into force now and what does it mean?

On 29 April 2019, Sierra Leone and the Saharawi Republic deposited their instruments of ratification of the Agreement establishing the African Continental Free Trade Area (AfCFTA). This brings the number of ratifications for the AfCFTA Agreement to 22. Thirty days after the 22nd instrument of ratification is deposited the AfCFTA Agreement enters into force.[1] It has been announced that this will happen on 30 May 2019.

Only the AfCFTA Agreement then enters into force. Once the negotiations for the Phase I Protocols (for Trade in Goods, Trade in Services and Dispute Settlement[2], including their Annexes and Appendices) have been completed, they will be adopted and enter into force. Important matters (tariff schedules and rules of origin, and sector commitments for the priority services) must still be finalized. According to Article 23 of the AfCFTA Agreement the Phase I and Phase II Protocols (on Investment, Intellectual Property Rights, Competition Policy) and any other instrument deemed necessary, shall also enter into force 30 days after 22 instruments of ratification have been deposited.

Ratification is the international act whereby sovereign states establish on the international plane their consent to be bound by an international agreement.[3] They thereby indicate that, as state parties to the agreement in question, they accept and will implement the obligations agreed upon. International agreements, once they have entered into force, only bind the states that are parties thereto.

Although parliamentary approval of a treaty may be required by the law of the land of a particular country (before ratification can be undertaken), this is a different and entirely domestic process. Once parliamentary approval has been given (where required), the executive branch of government must still perform the act of ratification.

Why must International Agreements be ratified? There is no “international parliament” which can pass legislation for states. States are sovereign. It means that they must give their consent to be bound by an international agreement. This they do by ratifying a new agreement or by acceding to an existing one. The AfCFTA follows the same approach.

The 22 countries that have deposited their instruments of ratification with the AU Commission Chairperson (the Depositary of this Agreement) at the beginning of May 2019 are Ghana, Kenya, Rwanda, Niger, Chad, Congo Republic, Djibouti, Guinea, eSwatini (former Swaziland), Mali, Mauritania, Namibia, South Africa, Uganda, Ivory Coast (Côte d’Ivoire), Senegal, Togo, Egypt, Ethiopia, The Gambia, Sierra Leone and Saharawi Republic. Additionally, Zimbabwe has received parliamentary approval for ratification but has yet to deposit its ratification instruments with the AUC Chairperson.[4]

Those AU Member States that will deposit instruments of ratification before the end of May 2019 will also become State Parties through ratification. Those wanting to become State Parties after the AfCFTA Agreement has entered into force, will be able to do so by depositing instruments of accession.[5] Accession is the act whereby a state accepts the offer or the opportunity to become a party to an international agreement and usually occurs after the agreement has entered into force. Accession involves the formal depositing of an instrument of accession. It has the same legal effect as ratification.

When an international agreement has entered into force, it must be implemented by the State Parties. Obligations must be respected. For trade agreements it means private parties can start trading their goods and services across the borders of the State Parties. They are entitled to the preferences agreed upon.

The entry into force of the AfCFTA will, however, not be the moment when new preferential trade among the AfCFTA State Parties becomes possible. The reason is that the tariff schedules and service sector commitments (which will form part of the Protocols on Trade in Goods and Trade in Services respectively) are still being negotiated. The rules of origin necessary for identifying the products entitled to preferential treatment, must also be finalized. These outstanding issues are complex. Their finalization will take time.

Preferential trade under the AfCFTA will only be possible (between the State Parties) once the Protocols on Trade in Goods and Trade in Services have also entered into force. National tariff books and domestic regulations will complete the legal picture required for such trade. There could of course be trade among African States under the rules of the Regional Economic Communities (RECs) or in terms of Most-Favoured-Nation (MFN) rates. The latter are based on the tariff schedules forming part of the World Trade Organization (WTO) legal instruments. MFN rates are higher than the preferential rates which are being negotiated as part of the AfCFTA, and which are aimed at boosting intra-African trade.

[1] As required by Art 23 AfCFTA Agreement.

[2] The Protocol on Dispute Settlement has already been finalized.

[3] See the tralac Working Paper, Ratification of the AfCFTA Agreement: What happens next?, by this author.

[4] See tralac’s AfCFTA resources page.

[5] Art 23 (3) AfCFTA Agreement.

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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