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The Institutions of the Dispute Settlement Mechanism of the AfCFTA


The Institutions of the Dispute Settlement Mechanism of the AfCFTA

The Institutions of the Dispute Settlement Mechanism of the AfCFTA

The implementation of the Dispute Settlement Mechanism of the African Continental Free Trade Area (AfCFTA) is governed by a dedicated Protocol, the Protocol on Rules and Procedures on the Settlement of Disputes (hereinafter referred to as the Dispute Settlement Protocol of the AfCFTA). It provides for the following institutions: The Dispute Settlement Body (DSB), Panels, and the Appellate Body (AB). The AfCFTA Secretariat (which is one of the main AfCFTA institutions[1]) will play an important role in terms of providing logistical and practical support services, including to AfCFTA State Parties when required.

The Dispute Settlement Body (DSB) has been established in accordance with Article 20 of the AfCFTA Agreement and has to administer the AfCFTA Dispute Settlement Protocol. It is composed of representatives of all the State Parties and has the authority to establish Dispute Settlement Panels and an AB, to adopt Panel and AB reports, to maintain surveillance of implementation of rulings and recommendations of the Panels and AB, and to authorise the suspension of concessions and other obligations under the Agreement.[2] The DSB shall have its own Chairperson (elected by the State Parties) and shall establish such rules of procedure as required. It shall meet as often as necessary.

The DSB will take decisions by consensus, unless otherwise provided. The reverse consensus rule applies to the adoption of important matters, such as the adoption of Panel reports and AB rulings. By way of an example: An AB report shall be adopted by the DSB and unconditionally accepted by the Parties to the dispute unless the DSB decides by consensus not to adopt the AB report.[3]

Disputes under this Protocol commence when a Complaining Party invokes Article 7 of the Protocol and requests consultations to be held with another State Party, to reach an amicable resolution of a dispute. Where they fail to settle a dispute through consultations, the Complaining Party may refer the matter to the DSB, for a Panel to be established.

The Secretariat shall establish and maintain an indicative list or roster of individuals who are willing and able to serve as Panellists. Each State Party may annually nominate two individuals for the inclusion in the indicative list or roster.[4] A Panel shall make an objective assessment of the matter before it, including the facts of the case and the applicability of the relevant provisions of the Agreement, and make findings to assist the DSB in making a recommendation and a ruling.

If a Party to a dispute appeals against the findings of a Panel, the matter goes to the Appellate Body (AB), which is a standing body and established by the DSB. It shall be composed of 7 persons, 3 of whom shall hear and decide an appeal, serving on a rotational basis. AB members are appointed for a four-year term, renewable once. Members of the AB shall not be affiliated to any government.

Where the DSB fails to appoint a person to fill the vacancy within 2 months, the Chairperson of the DSB shall, in consultations with the Secretariat, within a period of 1 month fill the vacancy.[5] This procedure will prevent the AfCFTA Dispute Settlement Mechanism to suffer the stalemate presently existing in the WTO, where the refusal by the United States to cooperate in the appointment of new AB members has caused an impasse. The WTO has no functioning AB at present.

This design indicates that the Dispute Settlement Understanding (DSU) of the World Trade Organization (WTO) has served as the model for the AfCFTA’s own Dispute Settlement Mechanism. This does not mean that that it is a precise copy; there are differences in terms of procedures,[6] membership,[7] and jurisdiction. Disputes under the AfCFTA Protocol will of course involve disagreements between AfCFTA State Parties regarding the interpretation and/or application of the Agreement in relation to their rights and obligations.[8] The AfCFTA Agreement is defined to mean the Agreement Establishing the AfCFTA and its Protocols, Annexes and Appendices, which shall form an integral part thereof.[9]

It has to be noted that this Dispute Settlement Protocol forms part of the AfCFTA as a single undertaking.[10] All AfCFTA State Parties are obligated to respect and give effect to the Dispute Settlement Mechanism. It forms “a central element in providing security and predictability to the regional trading system. The dispute settlement mechanism shall preserve the rights and obligations of State Parties under the Agreement and clarify the existing provisions of the Agreement.”[11]

[1] Art 13 AfCFTA Agreement.

[2] Art 5 AfCFTA Dispute Settlement Protocol.

[3] Art 10 AfCFTA Dispute Settlement Protocol.

[4] Art 22 AfCFTA Dispute Settlement Protocol.

[5] Art 20(6) AfCFTA Dispute Settlement Protocol.

[6] The appointment of Members of the AB is an important example.

[7] Not all Members of the African Union are simultaneously Member States of the WTO.

[8] Art 1 AfCFTA Dispute Settlement Protocol.

[9] Art 1 AfCFTA Agreement.

[10] Art 8(2) AfCFTA Agreement.

[11] Art 4(1) AfCFTA Dispute Settlement Protocol.

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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