Building capacity to help Africa trade better

Why clarity about SADC law has become an urgent matter


Why clarity about SADC law has become an urgent matter

Gerhard Erasmus, tralac Associate, discusses the need for greater legal certainty within SADC

The 2012 audit of the SADC Free Trade Area (FTA), conducted by the Southern Africa TradeHub, notes that certain member states are not complying with basic obligations in the SADC Trade Protocol. Some are charging “surtaxes” and levies on goods imported from other state parties, which are in violation of the applicable tariff schedules. In other instances goods from selected member states are targeted; amounting to discriminatory treatment. There are also complaints about other trade-related measures such as import bans because health standards have allegedly not been complied with.

These are unilateral measures which are either clear violations or they are based on arguments lacking clarity and legal certainty. The fact of the matter is that the SADC FTA legal regime does not function as it should; the rights of private parties are violated while suspect national measures go unchallenged. No court of law has been petitioned to rule on the lawfulness or otherwise of these measures. Proper monitoring on behalf of the collective is absent and the system for notifying national trade restrictions is deficient.

These are not new developments or new allegations. The SADC Committee of Ministers of Trade (CMT) could, however, not yet agree on how to tackle them or how to implement effective answers. The result is that the rules-based character of SADC is undermined and that trade governance lacks transparency. The problem has deeper roots; African governments do not litigate against each other about violations or non-compliance when it comes to regional trade arrangements. Apparently that is seen as disrespect for sovereignty; or perhaps because there is a belief that differences can be ironed out through “discussions”. Why litigation is viewed as offensive is not clear. It will in fact be better to refer disputes over the application and interpretation of REC law to an independent forum; as is the practice elsewhere. There are regional courts and tribunals with the necessary jurisdiction within the African RECs.

The settlement of differences via adjudication will contribute to clarity and better relations between the governments concerned, so that normal business transactions between their nations can go ahead. The European Commission and the United States government are frequently locked in dispute settlement procedures in Geneva, without derailing their cooperation when mutual interests are at stake. Right now they are negotiating the Trans-Atlantic FTA, while the Boeing- Airbus and Beef Hormone cases are still before the Appellate Body of the WTO. There are no logical reasons why the same cannot happen with regard to the basic rules of the SADC game and why local traders and firms should not enjoy the protection and certainty of the law.

In SADC, traders and firms are often treated unlawfully and unfairly. These private entities face major difficulties when it comes to the enforcement of their rights. There are jurisdictional challenges regarding access to regional tribunals, national courts will refuse to apply unincorporated trade agreements, and in the case of SADC the regional Tribunal was suspended in 2010.

The governments of affected private parties as a rule refuse to act on their behalf; they will not litigate directly against those other member states engaging in unlawful practices. This weakens the belief in SADC as a rules-based arrangement. Political statements regarding increased regional integration and about negotiations to conclude the new Tripartite FTA are met with growing cynicism. This does not bode well for regional integration and trade. Why would the same governments implement new agreements on FTAs, finance and investment, services, transport, customs etc. any differently when existing regional legal instruments are violated with impunity?

Respect for the applicable rules is crucial if we want our regional arrangements to be based on certainty, predictability and clean administration. This requires clarity about the applicable law, the real prospect of judicial review, and that effective remedies are available.



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