Building capacity to help Africa trade better

Where is the AfCFTA’s Engine Room?


Where is the AfCFTA’s Engine Room?

Where is the AfCFTA’s Engine Room?

The African Continental Free Trade Area (AfCFTA) might not be designed to have one single “engine room,” but the scope of the underlying ambition seems to require one. The creation of “a single market for goods, services, facilitated by movement of persons in order to deepen the economic integration of the African continent[1] will not come about without a centre capable of generating the required policies and steering coordinated action and harmonised implementation in the desired direction.

Institutionally, the AfCFTA is a compromise between a modern Free Trade Area (FTA) for trade in goods and services, and an ambitious African Union (AU) flagship project to advance the march towards the African Economic Community, envisaged in the Abuja Treaty of 1991. This design pulls in different directions. In an FTA the State Parties may conclude new trade deals and retain national policy space over their trade relations. They are free to develop and implement tariff related policies and measures, in accordance with national choices. They should take their AfCFTA obligations into account when doing so.

The design for “deep integration” arrangements is quite different. They have supra-national institutions, with powers to override national policies and measures in the agreed areas. The AfCFTA does not provide for supra-nationality; African nations treasure their sovereignty. They have opted to do the same under the AfCFTA as it stands.

It has been said that the AfCFTA State Parties are “pooling their sovereignty”. It is not clear what this statement means or what effect is to be expected. The text of the AfCFTA Agreement does not mention this concept. It contains (or will contain once the tariff schedules, rules of origin and services commitments are finalized) rather standard obligations to liberalise trade amongst the State Parties as agreed. This will include the exclusion of sensitive goods and other compromises. There are also typical exceptions such as those providing for General Exceptions,[2] Security Exceptions,[3] Balance of Payments policies,[4] Trade Remedies and Safeguards[5]. National measures invoking these exceptions must comply with the applicable conditions, but they are implemented on the basis of national policies and decisions.

The AfCFTA’s legal instruments will not be a self-executing nor linked to a supra-national organ. This is a member-driven FTA. The enforcement of the agreed obligations will happen, as in the World Trade Organization (WTO), through a dispute settlement protocol under which only the State Parties will have standing. It remains to be seen whether the AfCFTA will give rise to novel behaviour in the form of formally declared disputes. African nations have never done so.

Will the AfCFTA, nevertheless, generate a new and committed centre which will serve as the engine room for future action and continental integration? For this unique development to occur there will have to be inspired leadership, continent-wide political commitment and new legal instruments. Article 23 of the AfCFTA Agreement provides for his possibility where it refers to “any other Instrument within the scope of this Agreement deemed necessary”.

The present AfCFTA implementation machinery consists of an Institutional Framework for the Implementation of the AfCFTA only.[6] This is in line with the member-driven nature of the overall deal. The Assembly of the AU is the highest decision-making organ of the AfCFTA and will provide “oversight and strategic guidance” by consensus. It consists of all AU Members and meets at pre-determined occasions. It will not formulate or execute AfCFTA policies. The Council of Ministers (consisting of Trade Ministers of the State Parties) will formally be responsible for the implementation and enforcement of the AfCFTA Agreement. However, it is a high-level political platform where Ministers representing the State Parties, will meet from time to time. The Committee of Senior Trade Officials (Permanent or Principal Secretaries of State Parties) may turn out to be responsible for most of the measures implementing Council decisions. It will also direct the AfCFTA Secretariat to undertake assignments, promote harmonisation of appropriate policies, consider reports and can take appropriate actions and establish committees.[7] This will be, for the time being, the AfCFTA’s sui generis “engine room”.

The Secretariat will be a unique institution but is not endowed with inherent powers or a mandate to secure compliance with obligations accepted by the State Parties. It is described as a “functionally autonomous body within the AU system”, with independent legal personality. It will be autonomous of the AU Commission but funded by AU. The Secretariat will exercise support functions and disseminate official information about national trade-related measures. It should ensure general transparency in the AfCFTA and work together with several ad hoc technical committees and the Regional Economic Communities (RECs).

If one considers the fact that the present AfCFTA arrangement is essentially an FTA in which the State Parties retain freedom over trade and related policies and that many of the obligations are about “progressive liberalisation” and “cooperation”,[8] the initial stage in the life of the AfCFTA will not see dramatic announcements about supra-nationality or the launching of new institutions. It will take time to adopt the Phase II instruments, to secure a firm foundation for the AfCFTA, to ensure rules-based national trade governance in the State Parties and higher levels of integration in the RECs.[9] This amounts to a formidable undertaking. The most immediate task will be to steady the boat, before it embarks on new and bolder voyages.

[1] Art 3(a) AfCFTA Agreement.

[2] Art 26 Protocol on Trade in Goods.

[3] Art 27 Protocol on Trade in Goods.

[4] Art 28 Protocol on trade in Goods.

[5] Part V Protocol on Trade in Goods.

[6] This is the formal description used in Art 9 of the AfCFTA Agreement.

[7] Art 12 AfCFTA Agreement.

[8] See Art 4 AfCFTA Agreement.

[9] Art 19(2) of the AfCFTA Agreement provides for the continued existence of the RECs and the obligation on the State Parties to attain the higher levels of regional integration achieved by the more advanced ones.

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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