Dispute Resolutions Under the AfCFTA: Arbitration of Trade Disputes: Gboyega ‘Sanmi Oyewole, SAN, ACIArb. (UK)

INTRODUCTION

The Agreement establishing the African Continental Free Trade Area (the Agreement) was borne out of the Abuja Treaty of 3rd June, 1991 which has as its core objectives; the establishment and strengthening of a free trade area within the African continent with a common tariff and gradual elimination of barriers to movement of persons, good and services. However, the Agreement only came into force after 28 years of deliberations and negotiations when African Heads of States/Governments on the 30th of May, 2019, held an extraordinary summit of the African Union to arrive ata resolution to commence trading under the Agreementin July, 2020. Commencement of the Resolution was however deferred because of the COVID-19 pandemic so that trading under the AfCFTA would officially begin on 1st January, 2021.

At the time of the extraordinary summit, Nigeria wasyet to sign the Treaty and only attended the Negotiations on observer-status as Chairman of the Economic Committee of West African States(ECOWAS). The Country’s lack of commitment to the Treaty, being an African economic powerhouse and the most-populous black country in the world, was a causefor concern, however, the Government emphasized that its non-participation was a delay and not a refusal to join the Agreement. Nigeria signed the Treaty Agreement on July, 2019 and Ratification was only but approved by the Federal Executive Council (FEC) on the 12th day of November, 2020 subject to the President giving assent to the ratification instrument.

In terms of numbers of participating countries, the AfCFTA will be the world’s largest free trade area since the formation of the World Trade Organization (WTO) in 1995. The administrative function of the AfCFTA is being run from a Secretariat in Accra, Ghana with Wamkele Mene as its Secretary-General. Estimates from the United Nations Economic Commission for Africa (UNECA) suggest that the AfCFTA has the potential to boost intra-African trade by 52.3%.

The Agreement comprises of six integral protocols, towit: Trade in Goods; Trade in Service; Investment; Intellectual Property Rights; Competition Policy; and particularly the Protocol on Rules and Procedures onthe Settlement of Disputes (DS Protocol). A holisticreview of the DS Protocol and its effectiveness in thesettlement of trade disputes that may arise under the AfCFTA shall be the focus of this article.

DISPUTE RESOLUTION UNDER THE AfCFTA AGREEMENT

Disputes are bound to arise between State Parties with regards to the interpretation and/or application of the Agreement in relation to their rights and obligations. The Agreement operates, by its annexed Protocols, a rules-based system for the governance of intra-African trade with enormous economic, social, and political implications on State Parties. Thus, it is only reasonably expected to have a system for the resolution of disputes that may arise out of or in connection with the application of the Agreement upon its commencement.

The AfCFTA Agreement in Articles 4(f) and 20, and the DS Protocol in Articles 6(1), 7, 8 and 27 provide for the mechanism for the resolution of trade disputes between member states, to wit;

Article 4 (f) of the Agreement provides thus:

For purposes of fulfilling and realizing the objectives set out in Article 3, State Parties shall:

f. Establish a mechanism for the settlement of disputes concerning their rights and obligations; …

Article 20 of the Agreement provides that:

1. A Dispute Settlement Mechanism is hereby established and shall apply to the settlement of disputes arising between State Parties.

2. The Dispute Settlement Mechanism shall be administered in accordance with the Protocol on Rules and Procedures on the Settlement ofDisputes.

3. The Protocol on Rules and Procedures on the Settlement of Disputes shall establish, inter alia, a Dispute Settlement Body.

The Dispute Settlement Mechanism (DSM) of the AfCFTA is a central element in providing security and predictability to the regional trading system. The DSM essentially is modelled after the WTO-styled DSM andwould add to the plethora of…