Building capacity to help Africa trade better

How do the Southern African RECs compare as Rules-based Arrangements?

Trade Briefs

How do the Southern African RECs compare as Rules-based Arrangements?

How do the Southern African RECs compare as Rules-based Arrangements?

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During the week of 4 to 11 July 2016 tralac hosted a training workshop for the COMESA Court of Justice. It was a very worthwhile experience in terms of offering an opportunity to take a look at, amongst other things, the case law which is being generated by the Courts and Tribunals of COMESA, the EAC and SADC. This particular aspect (dispute settlement in the context of regional trade and integration) is an important but often neglected aspect when it comes to assessing the progress by African Regional Economic Communities (RECs).

If disputes about the application and interpretation of the regional legal instruments can be settled in an objective and binding manner an important element is added to how commerce and trade across borders are conducted. This provides for certainty in the markets and for investors. It will also lead to benefits for domestic traders and service providers. This will, over time, advance the effectiveness and legitimacy with which government development policies are implemented and will add to a general improvement in governance, the ability to fight corruption and tackle illegal activities such as tax evasion and money laundering. The overall ability of governments to deliver on their development plans, will improve.

The present fiasco at the Beitbridge border post between South Africa and Zimbabwe shows the consequences when regional governance lacks a rules-based system. The implementation of Zimbabwe’s Statutory Instrument No. 64 of 2016, which banned the import of basic foodstuffs and other products from South Africa, has disrupted bilateral and regional trade and has caused distress for domestic firms and consumers in the two countries directly involved as well as in the region.

The crisis in Zimbabwe demonstrates the weakness and dangers inherent in a system which lacks a legitimate and predictable system for resolving disputes. There is a strong case for arguing that, because of the very nature of the problems to be addressed as part of promoting intra-African trade and integration, effective institutions, legal certainty and the predictable application of the rules are very necessary. It brings benefits to inter-governmental relations and for the private sector. Adjudication will, in addition, clarify the use of exception clauses and when governments will be entitled, as part of the applicable law, to invoke trade remedies and acceptable trade defence measures.

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