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Building capacity to help Africa trade better

Topics publications: Trade law and regulation

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.

Working Papers

2021: Review of ITAC Investigations in a Pandemic Environment

The aim of the International Trade Administration Commission of South Africa (ITAC), as mandated by the International Trade Administration Act, 2002 (the ITA Act), is to foster economic growth and development to raise incomes and promote investment and employment in South Africa and within the Common Customs Area by establishing an efficient and effective system for the administration of international trade subject to the ITA Act and the Southern African Customs Union (SACU) Agreement, 2002.

Over the past seven years, tralac has been monitoring and reporting on investigations and reports prepared by ITAC that fall within its core functions. To date over 170 investigations and reports have been conducted and most applications for tariff support were the result of a fragile global and domestic economic environment and largely in response to relatively low-priced imports mainly from emerging economies. The COVID-19 pandemic has not eased the situation and has led the Commission to change working arrangements to mitigate challenges posed by the COVID-19 pandemic.

This Trade Report aims to understand ITAC’s core functions. We provide a summary of tariff investigations and trade remedies, followed by a review and summary of all the investigations concluded in 2020/21 and the trade remedies, if any, that were implemented during this period. We also undertake a seven-year review of ITAC’s investigations and reports, highlighting sectors where most applications and reviews were undertaken. Subsequently we look at the COVID-19 impact on South Africa’s trade. We conclude by looking at the impact of ITAC’s investigations and to what extent the common external tariff (CET) was affected during this review period.


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.

Working Papers

The Trade Remedies and Safeguards Regime of the AfCFTA

The African Continental Free Trade Area (AfCFTA) Agreement contains detailed provisions on trade remedies and safeguards, modelled on World Trade Organisation (WTO) principles. Since only a small number of African States are active users of trade remedies and safeguards, their wider application could bring about an important trade governance development. Disputes about trade remedy investigations and measures could also become more likely. Disputes will involve domestic judicial review proceedings as well as inter-State disputes. The latter will fall under the jurisdiction of the Dispute Settlement Mechanism of the AfCFTA.

How will the AfCFTA trade remedies and safeguards arrangement work? This paper addresses this question, mentions the applicable multilateral rules, and discusses the African trade governance context, including whether there might be a more active use of trade remedies and safeguards under the AfCFTA. It starts with the question why international trade agreements provide for trade remedies and safeguards.


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.

Working Papers

Are WTO Members Misinterpreting or Abandoning the Mandate of S&DT in the WTO?

It is a long-held view of developing countries in the World Trade Organisation (WTO) that some restrict-ions imposed by WTO trade rules and trade related agreements tend to hinder the adoption of local development policies that could lead to economic development. Flexibilities in the form of Special and Differential Treatment (S&DT) provisions in the implementation of WTO rules were proposed for developing countries. This flexibility is meant to provide policy space to pursue development policies. However, it is the view of developing countries that the application of S&DT provisions in the implementation of WTO rules is not practical. As a result, a WTO mandate to review S&DT provisions with a view to strengthening them and making them more precise, effective and operational was adopted by all WTO members.

This paper provides background on the S&DT mandate that is accorded to developing countries for implementing WTO Agreements. Furthermore, the paper analyses what some members may view as a misinterpretation and possibly the abandoning of the S&DT mandate broadly between developing and developed members. Discussions that evolved over the years resulted in a confusion that caused a stalemate in negotiations and led some members of the WTO to attempt to abandon the S&DT mandate. These members have proposed alternative approaches and a new agenda; however, this is without agreement by all WTO members.

The paper reflects the established positions of WTO members in the S&DT negotiations and provides an analysis of the views including the new agenda and approach on development envisaged by developed members. The study suggests an approach that calls for buy-in from all WTO members to ensure an inclusive outcome in S&DT negotiations that would lead to sustainable economic development for developing countries.


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.

Working Papers

How will the Trade Remedy Regime of the AfCFTA impact on Trade Governance?

The legal instruments of the African Continental Free Trade Area (AfCFTA) provide for a detailed regime to implement Trade Remedy and Safeguard measures. One gets the impression that this aspect of trade governance could be an important new continental development, even though very few African States are active users of these measures. How will the AfCFTA trade remedy regime work and what may change? Will the AfCFTA bring about a dedicated intra-African Trade Remedy and Safeguards arrangement? How may such a development impact on African countries’ ability to use multilateral Trade Remedies and Safeguards?

This Trade Report analyses Trade Remedies and Safeguards in the African trade governance context. It discusses the AfCFTA legal instruments provided for in this regard, which are modelled on World Trade Organisation (WTO) principles and procedures.


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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