Trade Briefs

Dispute Settlement under the AfCFTA

Dispute Settlement under the AfCFTA

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11 Jun 2018

Author(s): Gerhard Erasmus

Formal dispute settlement has not been a feature of intra-African trade. African Governments simply do not litigate against each other. This may be a consequence of many factors: a belief that an openly declared dispute signifies disrespect or a lack of solidarity; the nature of intra-African trade; the absence of “hard” obligations in previous trade agreements; or technical capacity constraints. African Governments are not active multilateral litigators either. One of the consequences is that African trade practice has not developed a jurisprudence for guiding trade policy choices and private commercial practice.

Under the classical approach to international dispute settlement only State Parties had access to dispute settlement mechanisms established under international agreements. This made sense when the sovereign equality of states dominated inter-governmental exchanges. This approach is unsuitable for addressing contemporary needs and the realities of globalization.

Well-designed regional integration regimes grant private parties standing before regional courts. Some of the RECs (e.g. COMESA, ECOWAS and the EAC) have done the same. Private parties are then, in their own right, entitled to remedies when trade agreements are infringed upon and they suffer the consequences.

The fact that most trade transactions involve the private sector (as producers of and traders in goods, providers of services and as investors) requires that their need for legal remedies be accommodated to ensure efficient outcomes and optimal practices. The classical approach to international dispute settlement would mean that they will only be protected if their states of nationality act on their behalf when trade agreements are violated.

The AfCFTA has the potential to bring about change, at least as far as the use of trade remedies (TRs) and safeguards is concerned. Present indications are that the AfCFTA regime wants, on this score, to be rules-based and transparent, and to provide for effective TRs. The AfCFTA, if appropriately designed and implemented, could therefore make a major contribution towards better trade governance in Africa.


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