The African Continental Free Trade Area (AfCFTA) adds an important new chapter to Africa’s economic integration agenda. The design of the AfCFTA regime will, however, require that that the practicalities around a new set of implications be addressed. They flow from the fact that the Regional Economic Communities (RECs) will co-exist alongside the AfCFTA. There will be different streams of preferential trade in goods on the continent.^[1] A proper strategy will be required in order to align different trade regimes for the same countries but with their own agendas for deeper economic integration.

The REC Free Trade Areas (FTAs) are described as the “building blocks” of the AfCFTA,^[2] but there is no formula in the AfCFTA Agreement as to what this means and how the building block strategy will be implemented. Since the RECs are international organisations in their own right,^[3] and the same States are the parties to respectively the AfCFTA and the different RECs, the State Parties will have to decide how to amalgamate the RECs with the AfCFTA, if that is indeed the plan. For the moment no amalgamation is on the cards. Article 8(2) of the AfCFTA Protocol on Trade in Goods says “… the State Parties that are members of other RECs, which have attained among themselves higher levels of elimination of customs duties and trade barriers than those provided for in this Protocol, shall maintain, and where possible improve upon, those higher levels of trade liberalisation among themselves”. (Emphasis added.)

In this tralac Blog we look at one of the matters to be considered, namely the co-existence of, on the one hand, the regional Courts in the more advanced RECs of the Common Market of Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Economic Community of West African States (ECOWAS), and on the other, the Dispute Settlement Mechanism of the AfCFTA.^[4] These arrangements, together with the Southern African Development Community (SADC), are the African Union (and AfCFTA) recognised RECs with FTAs. They are the AfCFTA building blocks. They also have plans to become Customs Unions and Economic Communities.

SADC is somewhat of an outlier. The SADC Member States abolished the SADC Tribunal in 2011 after a ruling against Zimbabwe involving the expropriation of private land without compensation. It has apparently also shelved earlier plans to become a customs union. But SADC is, at the same time, the REC with the highest level of intra African trade.^[5]

What are the implications of the AfCFTA Dispute Settlement Mechanism (DSM) for the REC Courts? The first feature to mention is that their jurisdictional powers and locus standi provisions are different. They can only decide matters referred to them according to their own founding instruments. It means that the REC Courts do not have jurisdiction over matters clearly falling under AfCFTA legal instruments and vice versa. The AfCFTA DSM is, in addition, modelled on the Dispute Settlement Understanding (DSU) of the World Trade Organisation (WTO). Only State Parties can file applications.

In the REC Courts natural and legal persons have standing to bring applications. For example: In the EAC Court of Justice a legal or natural person resident in any of the Partner States may challenge the legality of any Act, regulation, directive, decision or action of a Partner State or an institution of the Community on the grounds that it infringes the provisions of the EAC Treaty.^[6] There is no requirement that applicants must first exhaust domestic remedies as a condition before bringing an application to the Court. The reason for this position is based on the principle of enhancing a “people-centred and market driven co-operation” as enshrined in Article 7(1) of the EAC Treaty.

The REC legal regimes are based on Community Law, while the AfCFTA is not. Community Law has direct effect and enjoys primacy in the member states. The AfCFTA is based on the international agreements adopted for the purpose of establishing the AfCFTA as a trade arrangement for the State Parties. In their findings and recommendations, the AfCFTA Panels and Appellate Body “shall not add to or diminish the rights and obligations of State Parties pursuant to the Agreement”.^[7]

If concrete plans for amalgamating the RECs an AfCFTA are eventually adopted, important jurisdictional issues will have to be decided, in particular in respect of the right of private parties to bring applications to a judicial forum. There are no such plans at present.

Is it possible that the Member/Partner States of the RECs could, in the meantime, become involved in matters related to the implementation of the AfCFTA legal instruments in such a manner that their measures may impact on their REC obligations, or vice versa? When the same States implement overlapping trade regimes, issues of demarcation can arise. One such area is the application of Trade Remedies and Safeguards. Article 2.2 of the WTO Agreement on Safeguards measures for example states that multilateral safeguards shall be applied to an imported product ‘irrespective of its source’. AfCFTA State Parties have confirmed their rights and obligations under Article XIX of the GATT 1994 and the WTO Agreement on Safeguards.^[8] And could the same disputes about NTBs, SPS and TBT issues be heard in a REC Court, but also in Accra or Geneva?

The answers to these questions should become clearer as the AfCFTA and REC legal instruments are implemented, deeper integration issues are addressed, and disputes about compliance with trade related obligations are declared. One of the reasons why these demarcation issues have not yet arisen is that African States do not litigate against each other over trade issues. Trade Remedies and Safeguards are seldom implemented.^[9] Will this change under the AfCFTA?

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^[1] Art 19(2) AfCFTA Agreement and Art 8(2) AfCFTA Protocol on Trade in Goods.

^[2] Art 5(b) AfCFTA Agreement.

^[3] Sovereign states concluded treaties to establish them.

^[4] As per the dedicated AfCFTA Protocol on Dispute Settlement.

^[5] See forthcoming tralac Trade Report: Fundira, T. 2022, Intra-REC Trade

^[6] Art 30 EAC Treaty.

^[7] Art 4(6) AfCFTA Dispute settlement Protocol.

^[8] Art 3 Annex 9.

^[9] South Africa and Egypt are the exceptions.