When the member states of the African Union undertook the project of establishing a continent-wide preferential free trade area with the ultimate aim of creating a single African market, it was obvious that they would need to entrench this arrangement through a transparent and predictable rules-based system.
Central to such a system is the amicable resolution of trade disputes over a range of different areas including market access, investment, intellectual property rights and implementation of the free trade agreement.
For this reason, a central plank of the Agreement Establishing the African Continental Free Trade Area (AfCFTA) is a protocol on Dispute Settlement.
As member states negotiated this protocol, they looked to international best practice and were inspired by the dispute settlement system of the World Trade Organization (WTO). At the same time, Members were keen to avoid some of the WTO’s problems.
The WTO’s tribunal of final instance for global trade disputes, the Appellate Body, has been reduced to irrelevance over disagreements on its composition.
Further, the paralysis of both the WTO’s negotiating and dispute settlement arms means that trade disputes between China and the United States, two of the WTO’s largest members, have flared into open hostility.
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African Union member states chose to adopt those aspects of the WTO legal system that have worked while learning from the WTO’s mistakes.
The Agreement Establishing the AfCFTA sets out an architecture that balances the rights and obligations of its state parties. The Agreement aims for trade liberalisation while recognising public policy objectives such as environmental concerns and climate change, the imperative of food security and the need to provide trade remedies to vulnerable domestic industries such as small and medium-scale enterprises.
Any tensions or disputes over conflicting public policy objectives, or market access more broadly defined, will be adjudicated by the AfCFTA’s dispute settlement mechanism.