Building capacity to help Africa trade better

What lies ahead for the AfCFTA Trade Remedies and Safeguards Regime?


What lies ahead for the AfCFTA Trade Remedies and Safeguards Regime?

What lies ahead for the AfCFTA Trade Remedies and Safeguards Regime?

The legal instruments of the African Continental Free Trade Area (AfCFTA) provide for a detailed regime to implement Trade Remedy and Safeguard measures. There are four provisions in the AfCFTA Protocol on Trade in Goods, dealing with Anti-dumping and Countervailing Measures, Global Safeguard Measures, Preferential Safeguards, and Cooperation among the State Parties.[1] The detail appears in Annex 9 on Trade Remedies and in the AfCFTA Guidelines on Implementation of Trade Remedies.

A final evaluation must await the adoption of the Guidelines provided for in Annex 9 to the AfCFTA Protocol on Trade in Goods. However, there is sufficient detail in the texts to make an interim assessment of the instruments already adopted, and which are in are final form.

The first feature to be mentioned concerns the provision regarding Application of Anti-dumping, Countervailing and Safeguard Measures in Article 2 of Annex 9: State Parties may, with respect to goods traded under the provisions of this Annex, apply anti-dumping, countervailing and safeguard measures as provided for in Articles 17 – 19 of the Protocol on Trade in Goods, this Annex and the AfCFTA Guidelines in accordance with relevant WTO Agreements. (Emphasis added.)

This formulation suggests that Article 2 is not a typical interpretation clause, which would only apply in case of uncertainty. This provision says the AfCFTA Trade Remedy and Safeguard provisions must, from the outset, be WTO compatible. If this is the case, then the Annex and Guidelines will only add original principles and procedures where explicitly provided for. And even then, it will be possible to argue that where the AfCFTA provisions are ambiguous, WTO law must be used for the purpose of clarification.

The AfCFTA Trade Remedies and Safeguards regime is modelled on WTO principles and procedures and does not allow for special flexibilities in favour of e.g. Least Developed Countries. This regime will, in addition, not apply to all the intra-African trade in goods. The reason is that the AfCFTA will co-exist with REC FTAs, African customs unions, African trade arrangements, the WTO, and trade agreements with third parties. A careful demarcation of jurisdictional boundaries will be required when the applicable Trade Remedy and Safeguard rules are selected.

The Guidelines are still outstanding, and this Trade Remedy scheme cannot be implemented as designed, despite the AfCFTA Agreement being in force. What happens in the meantime? Pending the adoption of the Guidelines, “the relevant provisions of the WTO Agreements, national legislation and regional economic communities’ agreements relating to trade remedies may apply, where applicable”.[2] There will be legal disciplines to cover the interim implementation of Trade Remedies and Safeguards among the State Parties. However, national legislation cannot be used against foreign States unless expressly so agreed. State Parties that are not WTO Members can also use this interim option and make use of the applicable WTO instruments. They will then be bound by the relevant WTO rules. It is not known how long the interim phase will last; no decisions have been adopted as to when the outstanding work must be completed.

The AfCFTA will co-exist with the RECs and other African trade arrangements. The RECs and other trade arrangements have their own provisions on Trade Remedies and Safeguards, which normally refer to WTO disciplines.[3] Trade in goods governed by the REC FTAs or other intra-African trade arrangements and customs unions, will fall outside the ambit of the AfCFTA Trade Remedy regime. The latter will only apply with regard to goods traded among State Parties presently trading with each other under MFN rules. To provide an example: Future trade in goods between Tunisia and SACU Members States will be conducted on the basis of the preferential rates now being negotiated as part of the AfCFTA deal. They are all AfCFTA State Parties. Once in operation, the AfCFTA Trade Remedies and Safeguards can apply to Tunisia-SACU trade in goods. However, these countries have a choice, and the one invoking the decision to apply trade remedies or safeguards will make that decision. Tunisia and the SACU Member States can in future also use the WTO Trade Remedies and Safeguards; either on the basis of Article 2 of Annex 9 or because they are all WTO Members. Annex 9 also confirms the rights and obligations of the State Parties regarding multilateral Safeguards.[4]

If a dispute arises, Article 14 of Annex 9 will apply: Any dispute between the State Parties arising out of or relating to the interpretation or application of any provision of this Annex and its Guidelines, shall be settled in accordance with the Protocol on Rules and Procedures on the Settlement of Disputes taking into account the special nature of trade remedies.

Using the WTO rules on Trade Remedies and Safeguards will have benefits, such as clarity (there is a large volume of WTO case law) and avoiding the requirement in Article 4(2) of Annex 9 that a State Party intending to apply definitive preferential safeguard measures shall, before applying such measures, seek a solution acceptable to all State Parties concerned. If a safeguard measure, which applies erga omnes,[5] targets a product originating from a third state, the AfCFTA safeguards cannot as such cover the situation. The State Parties have confirmed their rights and obligations under Article XIX of the GATT 1994 and the WTO Agreement on Safeguards.[6] 

The role of the REC FTAs in respect of better trade governance is an important factor. They are the building blocks of the AfCFTA and are not about to disappear.[7] Intra-African trade in goods will, for the bigger part, be governed by REC FTAs, not AfCFTA preferences. If intra-African Trade Remedy and Safeguard governance is to be improved, many of the capacity building efforts should focus on these RECs.

The use by States of Trade Remedies and Safeguards is optional. Ultimately the success of this AfCFTA regime will depend on the willingness of the State Parties to make use of the AfCFTA Trade Remedies, on the adoption of the required legislation, and the establishment of domestic institutions to undertake investigations, which the private sector normally applies for. The result will be less discretionary measures, more certainty and predictability.

If the AfCFTA’s Trade Remedies and Safeguards regime is effectively implemented, includes capacity building assistance to all the State Parties, and improved data capture capacity, national trade governance on the Continent will benefit across the board. There will also be an increased ability to use these remedies in regional and the global trade contexts. The AfCFTA could become a multiplier for good trade governance.

[1] Arts 17 to 20, AfCFTA Protocol on Trade in Goods.

[2] Art 13(2) AfCFTA Annex 9.

[3] Art 18 of the SADC Protocol on Trade e.g. provides: Nothing in this Protocol shall prevent any Member State from applying anti-dumping measures which are in conformity with WTO provisions. Art 20 invokes WTO principles regarding Safeguards.

[4] Art 3 Annex 9.

[5] Art 2(2) of the WTO Agreement on Safeguards provides that safeguard measures “shall be applied to a product being imported irrespective of its source”.

[6] Art 3 Annex 9.

[7] See forthcoming Trade Brief on Trade Remedies and Safeguards under the AfCFTA (www.tralac.org/publications)

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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