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Observer status for the African Union at the WTO


Observer status for the African Union at the WTO

Observer status for the African Union at the WTO

On 17 November 2019, Mr Moussa Faki Mahamat, Chair of the African Union Commission (AUC), sent a letter to Ms Sunanta Kangvalkulkij, Chair of the General Council of the World Trade Organization (WTO) and Mr Roberto Azevêdo, WTO Director-General, requesting that the AU be granted observer status in the WTO.[1]

In this correspondence it is stated that the AU is “Africa’s inter-governmental Organization with the ultimate objective to accelerate the political and social-economic integration of the Continent” and that it had “operationalized” the African Continental Free Trade Area (AfCFTA) at the 12th Extraordinary Summit of the Heads of State and Government of the AU in Niamey, Niger on 7 July 2019. This occasion seems to have triggered the decision to request WTO observer status for the AU.

The letter goes on to claim that the AfCFTA, once fully implemented, would make the African continent the world’s largest single market. The AU, it is further noted, “attaches great importance to the enhancement of trade performance of its Member States of which 44 are Members of the World Trade Organization. Nine African countries are currently candidates to the WTO, including 6 LDCs.”

The letter declares that the AU “has been given the mandate by its Member States as per its policy organs, [to] coordinate and harmonize the position of African countries and regions, with a view to speak with one voice in international trade negotiations and fora”. Observer status is necessary to “ensure that Africa is effectively integrated and represented into this international trading system and that its interests and concerns are adequately taken into account”. Mr Mahamat writes: “I have no doubt that the granting of observer status to the AU and its participation in the activities of the WTO and its technical sub-committees will facilitate the formulation of common African policies and enhance the equitable participation of the member States of the WTO to contribute to a rules-based multilateral international trading system. Above all, this will greatly reinforce the growing strategic partnership between the African Union and the WTO.”

But what exactly is this collective mandate about and who articulates how to “speak with one voice in international trade negotiations… to ensure that Africa is effectively integrated and represented in the international trading system…”? Africa consists of 55 independent and sovereign states. They may share the same general views on matters which do not require detailed analysis of individual national interests (such as supporting the notion of special and differential treatment of developing countries), but ultimately individual African governments are responsible to domestic audiences. They will and must pursue their own national economic and trade policies.

The WTO is a multilateral Organization. Its objectives are about the rules-based liberalization of global trade, not regional integration. Article XXIV of the General Agreement on Tariffs and Trade (GATT) deals with regional integration by way of tolerating Free Trade Areas (FTAs) and Customs Unions (CUs) as acceptable exceptions to the most-favoured-nation (MFN) principle, provided they comply with the stated conditions. Article V of the General Agreement on Trade in Services (GATS) does the same for trade in services.

The AfCFTA legal instruments confirm the continued application and binding nature of the AfCFTA State Parties’ WTO rights and obligations.[2] Article 18 of the AfCFTA Agreement says this Agreement “shall not nullify, modify or revoke rights and obligations under pre-existing trade agreements that State Parties have with Third Parties”. Article 4 of the Protocol on Trade in Goods provides: “Nothing in this Protocol shall prevent a State Party from concluding or maintaining preferential trade arrangements with Third Parties….” WTO rights can only be changed in accordance with WTO procedures. As WTO Members, the State Parties continue to enjoy the rights and freedoms (including the conclusion of new agreements) associated with WTO membership status.

The WTO has its own rules and procedures for granting observer status. The purpose of observer status for intergovernmental organizations in the WTO is to enable them to follow discussions on matters of direct interest to them. The WTO has guidelines on observer status for international organizations.[3] Only meetings of Committees of direct interest to an observer can be attended. They will participate in General Council meetings nor in meetings of the Committee on Budget, Finance and Administration or the Dispute Settlement Body.[4] The General Council is the WTO’s highest-level decision-making with representatives (usually ambassadors or equivalent) from all member governments. It has the authority to act on behalf of the ministerial conference which only meets about every two years.

The launching of the AfCFTA has added new vistas to the aims of the AU. However, when it comes to boosting trade the first priority for the AfCFTA should be an effective and well-functioning continental structure able to promote the interests of the State Parties (which will consist of only those AU Members which have ratified the AfCFTA Agreement and Protocols) and to tackle the many obstacles bedevilling the movement of goods and services.

Rules-based trade governance at home should be prioritized. Observer status for the AU at the WTO may be a nice-to-have diplomatic extra, but individual Governments remain responsible for national economic development and concluding trade agreements which will serve the national interest. Most of them are already WTO Members.

[1] For the text of this letter, see the  pdf Request for observer status by the African Union: Communication from Benin on behalf of the African Group (61 KB)

[2] See Articles 7, 17, 18 and 25 of the AfCFTA Protocol on Trade in Goods.

[3] WT/L/161, Annex 3.

[4] https://www.wto.org/english/thewto_e/igo_obs_e.htm

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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