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Dealing with Non-Tariff Barriers under the AfCFTA: What are the Prospects?

By Gerhard Erasmus
18 Dec 2019
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Dealing with Non-Tariff Barriers under the AfCFTA: What are the Prospects?

The African Continental Free Trade Area (AfCFTA) has been designed as the answer to the low levels of intra-African trade.[1] It should boost intra-African trade by reducing the tariffs on goods traded among African nations (actually only on goods traded among the State Parties[2]) and eliminating non-tariff barriers (NTBs).

The elimination of tariffs could, over time, substantially increase intra-African trade. However, the benefits of freer trade will not materialize unless accompanied by procedures and rules to remove Africa’s numerous NTBs. IMF studies show that even small improvements on this score are likely to have sizable effects. Improving customs services and other trade-related procedures could be more effective in boosting intra-African trade than tariff reductions.[3] The reduction of NTBs will also improve the effectiveness of tariff liberalization, especially in landlocked and low-income countries.

NTBs cover a wide range of restrictive practices, other than tariffs, that make trade difficult and costly. Examples are customs clearance delays, restrictive licensing processes, certification challenges, uncoordinated transport related regulations and corruption. The AfCFTA’s general categorisation of NTBs also mentions restrictive government practices or their toleration, customs and administrative entry procedures, Technical Barriers to Trade, Sanitary and Phytosanitary Measures, specific limitations, and charges on imports.[4]

How will the AfCFTA tackle this problem? A detailed pdf AfCFTA Annex on NTBs (985 KB)  (Annex 5) has been adopted and an online mechanism to deal with NTBs has been developed. This mechanism “shall be accessible to State Parties’ Economic Operators[5], National Focal Points, REC Secretariats, academic researchers and other Interested Parties”.[6] An “Interested Party” means a Party that is directly affected by an NTB.[7]

It should become possible (once the system is up and running) to report and resolve problems related to NTBs. Traders, freighters and firms (usually the parties most directly affected by NTBs) would be able to report NTBs on a specially designed website, also to submit complaints using an offline short-messaging-service feature and to receive information on NTB resolution processes. This mechanism will be managed by the AfCFTA Secretariat, which will be based in Accra, Ghana. The AfCFTA State Parties must appoint national focal points to help resolve NTBs.[8] The responsible officials will receive NTB complaints and must resolve them through the agreed procedures and timeframes.

It is important to note that the AfCFTA NTB mechanism will function in close cooperation with REC NTB monitoring mechanisms. Article 10 of Annex 5 states that the RECs “shall establish or strengthen NTBs monitoring mechanisms” for tracking and monitoring NTBs affecting intra-African trade and updating regional and national plans for the elimination of NTBs. The RECs NTB Monitoring mechanisms shall support the AfCFTA NTB Coordination Unit at the AfCFTA Secretariat in resolving inter-REC NTBs.

Th AfCFTA NTB arrangement provides for important jurisdictional demarcations. The AfCFTA State Parties must resolve NTBs raised at intra-REC level using the resolution mechanisms in place in each REC. They shall exhaust existing NTB elimination channels at REC level before escalating a complaint or trade concern to the AfCFTA level.[9] This is a confirmation of the principle laid down in Article 19(2) of the AfCFTA Agreement that the State Parties that are members of RECs which have attained among themselves higher levels of regional integration shall maintain such higher levels among themselves.

The AfCFTA mechanism will address NTBs that are not resolved at REC level, are inter-REC in nature, or are arising from State Parties that are not members of any REC. Elsewhere State Parties are encouraged to resolve NTBs raised at intra-REC level using the resolution mechanisms in place in each REC.[10]

What happens once an Interested Party has reported an NTB? The procedure provided for in Appendix 2 applies. The relevant officials receive the notification, inform the AfCFTA NTB Coordination Unit and the relevant State Party National Focal Point. The AfCFTA NTB Coordination Unit checks the validity of the complaint, and accepts or rejects it, or asks for further clarification from the complaining Party. If accepted, the National Focal Point receives a notification and is requested to follow up on the NTB and to “resolve” it.

What does it mean to resolve an NTB related complaint? The formal answer is that the procedures set out in Appendix 2 of Annex 5 must be used.[11] These procedures are about employing notification channels and an expectation that administrative procedures will generate a solution for the specific issue at hand. If this does not happen, a complaint or “trade concern” may be lodged by the relevant State Party.

State Parties must exhaust existing the channels and procedures at REC level before escalating a complaint or trade concern to the AfCFTA level. It is not explicitly stated that judicial remedies (such as applications to REC Courts or Tribunals) must also be exhausted.

How will these disputes be dealt with? Since these are ultimately inter-State disputes, the first requirement is that a particular State Party must be prepared to elevate the matter to the level of a formal dispute. And it will have to do it each and every time there is an unresolved complaint.

The complaint procedure consists of a first stage when a specific NTB is reported, a second stage when the services of a Facilitator can be used,[12] and a final stage involving the possibility of dispute settlement in terms of the AfCFTA Protocol on Dispute Settlement.[13] Only State Parties have standing under this Protocol.

Stage Two provides for the involvement of private parties in the resolution of NTB related disputes. The aim is to reach a mutually agreed solution, via the services of a Facilitator, within 45 days from the commencement of the proceedings in Stage II.[14] This particular process does not involve adjudication. It is about exchanges and proposals to remove an NTB. If a mutually agreed solution is reached (and the responsible national state organ should preferably participate in the proceedings) it shall be implemented and be circulated to all State Parties through the AfCFTA Secretariat. Where a State Party fails to resolve an NTB complaint after a report has been issued and a mutually agreed solution has been reached, the requesting State Party may resort to the dispute settlement stage.[15] Arbitration in accordance with the provisions of the Protocol on Dispute Settlement is also possible.

For an effective system for resolving Africa’s numerous NTBs, the proposed AfCFTA mechanism is a good starting point. It will need considerable improvement before a rules-based, expeditious and binding arrangement will be in place. The national discretions remain too broad, dispute settlement between State Parties is optional (African governments never litigate against each other over trade issues) and the solutions will not be legally enforceable. The absence of private complaints to a judicial forum remains a deficit. And it is to be noted that complaints are dealt with on an ad hoc basis. This will not bring about permanent and systemic solutions; establishing binding precedents, legal certainty and more predictability. But it is a promising start. It should be supported and be strengthened.


[1] Data for 2017 shows that the exports and imports between African countries represented only 16.6% of Africa’s total exports. This figure is low compared with exports within other regions: 68.1% in Europe, 59.4% in Asia, and 55.0% in America. See Michael Odiji,

https://theconversation.com/africa-should-focus-on-industrialisation-free-trade-will-follow-127142

[2] State Parties are African Union Member States that have ratified or acceded to the AfCFTA Agreement and for which the Agreement is in force. See Art 1, AfCFTA Agreement

[3] Is the African Continental Free Trade Area a Game Changer for the Continent? IMF Regional Economic Outlook: Sub-Saharan Africa | April 2019, p. 39.

[4] See Appendix 1, Annex 5.

[5] According to the World Customs Organization (WCO), an Authorized Economic Operator (AEO) is a party involved in the international movement of goods in whatever function that has been approved by or on behalf of a national Customs administration. AEOs include inter alia manufacturers, importers, exporters, brokers, carriers, consolidators, intermediaries, ports, airports, terminal operators, integrated operators, warehouses and distributors.

https://en.wikipedia.org/wiki/Authorized_economic_operator

[6] Art 12(7), Annex 5.

[7] Art 1, Annex 5.

[8] Art 9, Annex I, lists the Functions of the National Focal Points.

[9] In COMESA, the EAC and SADC this reporting mechanism is known as Tradebarriers.org.

[10] Art 12(3), Annex 5.

[11] Art 11, Annex 5.

[12] A Facilitator is defined as an independent expert chosen by the Interested Parties. An “Interested Party” means a Party that is directly affected by an NTB. Facilitators shall be drawn from a pool of experts appointed in accordance with agreed criteria developed by the NTBs Sub-Committee.

[13] Appendix 2, Annex 5.

[14] Par 2.2.3, Appendix 2.

[15] Ibid.

About the Author(s)

Gerhard Erasmus

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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