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Building capacity to help Africa trade better

Topics publications: Trade law and regulation

Trade Reports

The exhaustion of local remedies: The evolving jurisprudence of the COMESA Court of Justice

In August 2023, the Appellate Division of the COMESA Court of Justice delivered an important judgment in two appeals brought by a Mauritian company, Agiliss Limited, against earlier rulings of the Court’s First Instance Division. In the FID, Agiliss based both its references squarely and exclusively on provisions of the COMESA Treaty, especially its trade measures. This is significant because the courts of the African Regional Economic Communities (RECs) are not inundated with regional trade-related cases.

International Trade Explainer: Trade terms and concepts – A tralac guide

International trade has its own terminology. The following is a list of general trade terms as used in international trade agreements concluded by states and as applied in the legal instruments of international organisations dealing with trade between nations.

This list does not include terms used in private contracts concluded by importers, exporters, service providers and investors.

A thematic approach has been followed in preparing this list, which was updated in September 2023.

  • International Trade Agreements

  • Trade in Goods

  • Trade in Services

  • Regional Integration and Preferential Trade Arrangements

  • African Trade Arrangements

  • African economic integration and development initiatives

  • Terminology from other International Arrangements

  • International commercial and related terms

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged.

How to exhaust domestic remedies? The Agiliss cases before the COMESA Court of Justice

In this paper, we provide a discussion of the principles which apply when a regional court such as the COMESA Court of Justice (CCJ) has to decide whether the requirement of exhaustion of domestic remedies has been complied with or not. We mention the relevant judgments of the CCJ and emphasise the fact that article 26 of the COMESA Treaty forms part of a regional integration arrangement based on Community Law. We start by recalling how the exhaustion of domestic remedies has developed as part of Public International Law and how this concept has been refined over time. In regional integration arrangements, the right of legal persons to approach regional courts has become an essential feature of the relevant legal regimes.

We argue that the requirement that legal persons must exhaust domestic remedies before they have access to regional courts, must be looked at holistically and in the context of the nature of the legal arrangement in which it appears. In the present instance, this requirement should be interpreted in view of the fact that it forms part of an inter-state regime established for the purpose of deepening economic integration among the Member States through adherence to specific legal obligations and procedures. These obligations appear in the legal instruments concluded by sovereign states. They must respect their obligations, including those adopted for the purpose of granting private parties’ effective access to the relevant regional court in order to protect rights, procedures and rules-based practices recognised in the applicable treaty. When the regional arrangement in question is based on Community Law, as COMESA is, the requirement to exhaust domestic remedies is about more than a mere procedural or jurisdictional prerequisite.


Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.

Trade Briefs

A questionable answer to South Africa’s electricity crisis: a national state of disaster?

Wednesday, 1 March 2023 marked the centenary of South Africa’s state-owned electricity utility, Eskom. There was little cause for celebration. Instead, the day was marked by a set of disaster management regulations freshly published by the same cabinet minister who oversaw the South African Government’s response to the Covid-19 pandemic. If the consequences were not so devastating, Eskom’s descent into a state where it battles to ‘keep the lights on’ would bear all the hallmarks of a comedy of errors. A so-called state-owned company, with the Government as sole shareholder, and until recently burdened with a monopoly over power generation and transmission and partially over distribution, Eskom fell victim over the last 25 years to short-sighted and ill-directed decision-making, effectively disempowering the utility.

With ‘load shedding’ – the term for planned, rotational blackouts across the country to reduce power consumption to the level of Eskom’s heavily reduced generating capacity – increasing at times to 10 hours a day or more, and a populace growing ever more restive, the South African Government decided to use its powers under a law called the Disaster Management Act of 2002 (‘the Act’) to declare the electricity crisis a ‘national state of disaster’. The announcement, widely expected after it was called for by the ruling ANC at its five-yearly conference in December 2002, was made on 9 February 2023 by the President, Mr Ramaphosa, during his annual ‘State of the Nation’ address.

Predictably, the publication of the electricity regulations was met with a flurry of comments, ranging from fears of sweeping powers for ministers and others to scepticism about the need for more powers and thus for a national state of disaster as such. Careful reading of the Act in its entirety already raises doubts about its applicability to the ongoing electricity crisis in South Africa. But even if the Act could be invoked, a superficial analysis of the regulations issued under the Act raises serious questions about their validity, as the following overview with some interspersed comments may show. The key principle to keep in mind is that the regulations may not stray beyond the boundaries of the Act.


Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.

Books

African Trade and Integration: Law, Practice and the Courts

Preface

Africa’s trade and integration initiatives, which aim to eventually establish the African Economic Community, are anchored in law. Members of the African Union conclude agreements to achieve specific objectives that will collectively advance integration. The African Continental Free Trade Agreement (AfCFTA) is the most recent addition to the agreements concluded by members of the Regional Economic Communities (RECs). Eight RECs are recognised by the African Union, but there are others, including the oldest functioning customs union in the world, the Southern African Customs Union (SACU). They all exist in terms of their own legal instruments, which together constitute a comprehensive network of legal rules created by their treaties, protocols, annexes and appendices. To these are added acts and directives; further rules are also added by organs and institutions created by the treaties.

The context of Africa’s integration is complex: Africa is a diverse continent, in terms of economic size, level of development, and importantly industrialisation. A stark reminder is that 33 of the world’s 46 least developed countries are on the continent, and 16 African countries are land-locked. The African continent remains fragmented, and primarily an exporter of commodities. While this presents a clear rationale for integration, it equally complicates Africa’s integration. It is from this context that we at tralac appraise Africa’s trade and integration developments, and we focus in this book on dispute settlement. We contend that context is perhaps the most important factor determining the viability of Africa’s dispute settlement mechanisms and institutions.

tralac’s work on dispute settlement includes numerous contributions over the past two decades, since tralac’s establishment. We have published extensively, presented training programmes, and held stakeholder workshops on the evolution of dispute settlement in the RECs and the rulings of regional courts, as well as the approach by the private sector to domestic courts. The authors of the chapters in this book – Professor Gerhard Erasmus, Professor Dawid van Wyk and Creck Buyonge Miriti – and tralac staff, Associates and Alumni have all worked on this agenda. We’d like to thank especially Professor Tiya Maluwa, Obert Bore, Dr Talkmore Chidede, Abrie du Plessis, Kahaki Jere and William Mwanza for their contributions. We also extend very sincere appreciation to Sida (Sweden) for supporting this book, and our other development partners for their support to the broader body of dispute settlement work.

In this book, we review developments in the REC FTAs in terms of dispute settlement and compare REC Court practice with what can be expected under the AfCFTA Protocol on Dispute Settlement. There are indeed important differences between their approaches, but preparedness by African Governments to file disputes under this new dispute settlement Protocol will signal a very important development towards rules-based trade on the continent.

Trudi Hartzenberg

Trade Briefs

Why legal Certainty and Remedies matter for African Trade and Integration

Uncertainty is the enemy of endeavours to promote effective regional integration and trade. Business enterprises must can count on predictable outcomes when making investments and pursuing commercial ventures within national jurisdictions and across state borders. The ability of the private sector to deal with risk factors requires, amongst other things, reliable legal environments. This includes transparent laws and regulations and the availability of legal remedies when rights are infringed or threatened. These should exist at national, regional, and continental levels, especially now that the first steps are being taken to start trading under the African Continental Free Trade Area (AfCFTA). As has often been observed of the AfCFTA; it has tremendous potential for boosting intra-African trade “if properly implemented”. Ultimately, regional integration efforts should be underpinned by inter-state arrangements consisting of appropriate and enabling legal frameworks.

Effective and legitimate dispute resolution mechanisms should also be part and parcel of regional integration efforts. When differences arise about whether the right procedures have been followed or obligations in trade agreements have been respected by officials operating at borders or within national jurisdictions, they should be resolved through the objective and impartial application of mutually agreed norms. The parties to such disputes must accept the results of adjudication or other dispute settlement processes as fair, final, and binding. These basic practices are an integral part of good governance and the rule of law.


Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.

Trade Briefs

The Russia-Ukraine war has triggered the use of export restrictions on essential food supplies by some WTO members prompting food insecurity and rising food prices

The conflict in Ukraine has caused a global economic and humanitarian catastrophe. The global catastrophe encompasses human suffering, loss of lives, global food price increases, food shortages and food insecurity mainly in poor countries. This war is happening at a time when the world is just emerging from the impact of the COVID-19 pandemic, which also ravaged the global economy. Food shortages are predominantly affecting countries that are dependent on Ukraine and Russia for imports of key food staples; in addition, shortages of fertilizer will impact their food production.

Some members of the World Trade Organisation (WTO) who are major exporters of staple foods and fertilizer have resorted to export restrictions, as a result of market uncertainties triggered by the war. These WTO members are opposed to an export restrictions outcome that seeks to introduce stringent notification requirements on grounds that they need additional flexibility to take appropriate measures in the current context of food shortages and volatile prices. The WTO rules allow countries to impose export restrictions as a temporary measure under certain circumstances. These will be further explained in the paper.


Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.

Trade Briefs

Special Economic Zones in Africa: An Overview of Policies and Regulatory Regimes

Special Economic Zones (SEZs) are delimited zones in which industrial development is promoted by incentives and support programmes designed to attract foreign direct investment (FDI) and promote exports. To be successful, the target sectors and investors of the SEZs are selected according to the country’s comparative advantage and value proposition. In recent years, SEZs have been responsible for the creation of more than 60 million jobs in multiple sectors, such as the agro-processing and manufacturing industries. SEZs also stimulate labour productivity and skills improvement.

This trade brief discusses the different policies and regulatory regimes that are established in order to make SEZs successful and attract foreign investment. As the zones enjoy a more liberal administration, they create different rules from the national legislation regarding investment conditions, international trade law and labour law. Additionally, this brief discusses national labour law and its application by the SEZs to ensure decent work. Women represent a high percentage of African SEZs workers, but they are also more vulnerable to the breach of national requirements for labour protection.


Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.

Trade Briefs

Trade Remedies and Safeguards: Important for States and Private Parties

Part 4 of the AfCFTA Protocol on Trade in Goods contains several provisions on trade remedies and safeguards. Article 17 states that the State Parties may apply anti-dumping and countervailing measures, guided by the provisions of Annex 9 on Trade Remedies and the applicable AfCFTA Guidelines, and “in accordance with relevant WTO Agreements”. Global Safeguard Measures are also permissible. Article 19 of the Protocol allows for Preferential Safeguards in respect of trade in goods under the AfCFTA.

The implementation of trade remedies and safeguards as part of the AfCFTA Protocol on Trade in Goods will have important trade governance consequences and benefits. It will enhance the rules-based administration of trade in goods under the AfCFTA and in other trade agreements to which African States belong, including the Regional Economic Communities (RECs) and the WTO.


Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.

Trade Briefs

Will Trade Remedies be used as part of Trade Governance under the AfCFTA?

Very few African States are active users of trade remedies and safeguards as part of their trade governance and trade policy implementation. Only four African countries – Egypt, Morocco, South Africa, and Tunisia – have properly designed domestic trade remedy and safeguard arrangements and regularly use these measures to defend their domestic producers. They are also the more industrialised African countries; trade remedies are part of their trade governance toolkit. They use these measures primarily in the global trade context, not in respect of intra-African trade.

Does this mean that trade remedies and safeguards are not essential for countries in Africa with low levels of industrialisation? What will these countries do as they become more industrialised, which is one of the requirements for achieving the ambitions behind the African Continental Free Trade Area (AfCFTA) Agreement? And how will the State Parties protect sectors such as agriculture and services providers? How is trade policy made and executed in these countries?

This Trade Brief argues that trade remedies and safeguards are important trade governance tools for African States; for better domestic and regional integration policies and for achieving the goals of the AfCFTA Agreement.


Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.

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