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Two Sides of the Same Coin? Analysing the Efficacy of the African Continental Free Trade Area and WTO’s Dispute Settlement Mechanisms in Resolving Trade Disputes Between African States

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European Yearbook of International Economic Law 2021

Part of the book series: European Yearbook of International Economic Law ((EUROYEAR,volume 12))

Abstract

The World Trade Organisation (WTO) has often referred to its dispute resolution system as the “crown jewel” of the world trading system. However, the current crisis on the lack of a quorum in the Appellate Body is slowing down the dispute resolution process at the WTO considerably. Notwithstanding, African countries have an alternative dispute resolution mechanism available under the soon to be operationalized African Continental Free Trade Area Agreement (AfCFTA Agreement). This paper aims to highlight the efficiency of the AfCFTA dispute resolution mechanism as compared to that of the WTO. To this end, it is divided into four parts. Section 1 sets the background to this paper by expounding dispute settlement at both the WTO and AfCFTA. Section 2 focuses on the concept of concurrent jurisdiction between the two systems. It intends to find out whether recourse to one system automatically bars a state party from seeking a remedy in the other dispute resolution system. Section 3 concentrates on the similarities between the two systems. Section 4 highlights the lessons that AfCFTA may draw from other dispute settlement mechanisms (DSM) on the African continent and recommends changes to the AfCFTA dispute resolution system.

“The presence of law does not suggest that there will be no conflicts. To the contrary, law exists because there will always be differences that are not automatically reconcilable.” (Allan Wolff 2018)

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Notes

  1. 1.

    Qureshi and Gao (1999), p. 236.

  2. 2.

    Qureshi and Gao (1999), p. 236.

  3. 3.

    Shedd et al. (2012), p. 2.

  4. 4.

    General Agreement on Tariff and Trade Punta Del Este Declaration 1986.

  5. 5.

    Article XXII and XXIII General Agreement on Tariff and Trade 1994.

  6. 6.

    Alilovic (2000), pp. 282–283.

  7. 7.

    Guan (2014), pp. 80–81.

  8. 8.

    Article 2 of the Understanding on the Rules and Procedure governing the settlement of disputes.

  9. 9.

    Article 2 of the Understanding on the Rules and Procedure governing the settlement of disputes.

  10. 10.

    Appellate Body Report, Japan — Taxes on Alcoholic Beverages, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996: I, 97, p. 31.

  11. 11.

    Understanding the WTO: Settling Disputes A unique contribution available at https://www.wto.org/english/thewto_e/whatis_e/tif_e/disp1_e.htm.

  12. 12.

    Appellate Body Annual Report for 2019-2020 July 2020 WT/AB/30, p. 12.

  13. 13.

    Understanding the WTO: Settling Disputes A unique contribution available at https://www.wto.org/english/thewto_e/whatis_e/tif_e/disp1_e.htm.

  14. 14.

    Article 10 of the Understanding on the Rules and Procedure governing the settlement of disputes.

  15. 15.

    Appellate Body Report, European Communities — Regime for the Importation, Sale and Distribution of Bananas, WT/DS27/AB/R, adopted 25 September 1997, DSR 1997: II, 591, paras. 132.

  16. 16.

    Appellate Body Report, United States — Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R, adopted 6 November 1998, DSR 1998: VII, 2755, para. 101.

  17. 17.

    Article 4 of the Understanding on the Rules and Procedure governing the settlement of disputes.

  18. 18.

    Appellate Body Report, Mexico – Anti-Dumping Investigation of High Fructose Corn Syrup (HFCS) from the United States, WT/DS132/13, adopted 26 November 2001, para. 54.

  19. 19.

    Payosova et al. (2018), p. 18.

  20. 20.

    Lo et al. (2020), p. 52.

  21. 21.

    Statement by the United States at the meeting of the WTO Dispute Settlement Body Geneva May 23rd, 2016 available at https://www.wto.org/english/news_e/news16_e/us_statment_dsbmay16_e.pdf.

  22. 22.

    Hoekman and Mavroidis (2019), p. 3.

  23. 23.

    Allan Wolf, Deputy Director WTO, The Rule of law in the Age of Conflict Keynote Address at the Closing Ceremony World Trade Institute Master Programmes University of Bern 29 June 2018.

  24. 24.

    Kotzampasakis (2020).

  25. 25.

    Hillman (2009), pp. 8–10.

  26. 26.

    EU and other member countries statement on the MPIA available at https://trade.ec.europa.eu/doclib/docs/2020/january/tradoc_158596.pdf.

  27. 27.

    Malkawi (2020), pp. 3–4.

  28. 28.

    Jaswant (2020).

  29. 29.

    OECD (2003).

  30. 30.

    Article XXIV (4) of the General Agreement on Tariffs and Trade 1994.

  31. 31.

    Woolcock et al. (2007), pp. 236–259.

  32. 32.

    Mattoo et al. (2019).

  33. 33.

    Woolcock (2003), pp. 18–19.

  34. 34.

    Article 23 Agreement establishing the African Continental Free Trade Area.

  35. 35.

    Article 6 Treaty Establishing the African Economic Community available at https://au.int/sites/default/files/treaties/7775-treaty-0016_-_treaty_establishing_the_african_economic_community_e.pdf.

  36. 36.

    Article 3 Agreement Establishing the African Continental Free Trade Area, available at https://au.int/sites/default/files/treaties/36437-treaty-consolidated_text_on_cfta_-_en.pdf.

  37. 37.

    Article XXIV General Agreement on Trade and Tariffs.

  38. 38.

    Gathii (2011), p. 86.

  39. 39.

    Article XXIV of The General Agreement on Tariffs and Trade 1948.

  40. 40.

    African Union webpage: African Union Decision and Declarations: Assembly of the African Union Eighteenth Ordinary session available at https://au.int/en/focus-countries/ethiopia.

  41. 41.

    African Union webpage available at https://au.int/.

  42. 42.

    Article 23 African Union, Action Plan for Boosting Intra African Trade 2012.

  43. 43.

    Agreement Establishing the African Continental Free Trade Area.

  44. 44.

    African Union Webpage: List of countries which have signed, ratified or acceded to the Agreement establishing the African Continental Free Trade Area available at https://au.int/sites/default/files/treaties/36437-sl-AGREEMENT%20ESTABLISHING%20THE%20AFRICAN%20CONTINENTAL%20FREE%20TRADE%20AREA.pdf.

  45. 45.

    Szepesi (2004), p. 1.

  46. 46.

    Akinkugbe (2020), p. 138.

  47. 47.

    Article 4 of The African Continental Free Trade Area Agreement 2018.

  48. 48.

    Article 20 of The African Continental Free Trade Agreement, 2018.

  49. 49.

    Article 20(1) of The African Continental Free Trade Agreement, 2018.

  50. 50.

    Article 4 African Continental Free Trade Area Protocol on Rules and Procedure on the Settlement of Disputes.

  51. 51.

    Article 5(3) of the African Continental Free Trade Area Protocol on Rules and Procedure on the Settlement of Disputes.

  52. 52.

    Article 5(6) of the African Continental Free Trade Area Protocol on Rules and Procedure on the Settlement of Disputes.

  53. 53.

    Article 8. African Continental Free Trade Area Protocol on Rules and Procedure on the Settlement of Disputes.

  54. 54.

    Mosoti (2006), p. 9.

  55. 55.

    Article7 of the African Continental Free Trade Area Protocol on Rules and Procedure on the Settlement of Disputes.

  56. 56.

    Article 8 of the African Continental Free Trade Area Protocol on Rules and Procedure on the Settlement of Disputes.

  57. 57.

    Article 10(3) of the African Continental Free Trade Area Protocol on Rules and Procedure on the Settlement of Disputes.

  58. 58.

    Article 10(10) of the African Continental Free Trade Area Protocol on Rules and Procedure on the Settlement of Disputes.

  59. 59.

    Article 15(4) of the African Continental Free Trade Area Protocol on Rules and Procedure on the Settlement of Disputes.

  60. 60.

    Article 25 of the African Continental Free Trade Area Protocol on Rules and Procedure on the Settlement of Disputes.

  61. 61.

    Article 8 of the Protocol on Rules and Procedures on the Settlement of Disputes.

  62. 62.

    Articles 4 (27) of the Protocol on Rules and Procedures on the Settlement of Disputes.

  63. 63.

    Article 6(6) of the Protocol on Rules and Procedures on the Settlement of Disputes.

  64. 64.

    Article 27(1) of the Protocol on Rules and Procedures on the Settlement of Disputes.

  65. 65.

    Article 27(5) of the Protocol on Rules and Procedures on the Settlement of Disputes.

  66. 66.

    Article 27(6) of the Protocol on Rules and Procedures on the Settlement of Disputes.

  67. 67.

    Article 27(7) of the Protocol on Rules and Procedures on the Settlement of Disputes.

  68. 68.

    World Trade Organisation, Differential and more favourable treatment reciprocity and fuller participation of developing countries available at https://www.jus.uio.no/lm/wto.gatt.developing.countries.enabling.clause.1979/landscape.a4.pdf.

  69. 69.

    Gathii (2011), p. 122.

  70. 70.

    World Trade Organisation, Differential and more favourable treatment reciprocity, and fuller participation of developing countries available at https://www.wto.org/english/docs_e/legal_e/enabling1979_e.htm (Enabling Clause), Paragraph 3(a).

  71. 71.

    World Trade Organisation, Committee on Trade and Development, available at https://www.wto.org/english/tratop_e/devel_e/d3ctte_e.htm.

  72. 72.

    WTO Legal Note on Regional Trade Agreements under the Enabling Clause 13 May 2013, WT/COMTD/W/114.

  73. 73.

    Crawford and Fiorentina (2005), p. 39.

  74. 74.

    Bhagwati (1995), p. 1.

  75. 75.

    African Union Website: Regional Economic Communities available at https://au.int/en/recs.

  76. 76.

    Article 3 of the African Continental Free Trade Area Agreement 2018.

  77. 77.

    This was a matter in consideration in the Mexico – Tax Measures on Soft Drinks and Other Beverages, WT/DS308/AB/R, (Soft Drinks case).

  78. 78.

    Biukovic (2012), pp. 110–115.

  79. 79.

    Kwak and Marceau (2002), p. 83.

  80. 80.

    Molina and Khoroshavina (2018).

  81. 81.

    Henckels (2008), p. 3.

  82. 82.

    Marceau (2015), p. 15.

  83. 83.

    Pauwelyn and Salles (2009), pp. 19–20.

  84. 84.

    Marceau and Wyatt (2010a, b), p. 69.

  85. 85.

    Davey and Sapir (2009), p. 23.

  86. 86.

    Nguyen (2008), p. 115.

  87. 87.

    Wiese (2018), p. 17.

  88. 88.

    Kwak and Marceau (2002), p. 85.

  89. 89.

    Article 23.1 of the Understanding on the Rules and Procedure governing the settlement of disputes.

  90. 90.

    Article 23.2 of the Understanding on the Rules and Procedure governing the settlement of disputes.

  91. 91.

    Yannaca-Small (2008), p. 1015.

  92. 92.

    Zang (2018), p. 22.

  93. 93.

    Wu (2007), p. 91.

  94. 94.

    Wu (2007), p. 93.

  95. 95.

    Article 31 of the Vienna Conventions on the Law of Treaties.

  96. 96.

    Shany (2004), p. 1016.

  97. 97.

    Panel Report, Mexico – Tax Measures on Soft Drinks and Other Beverages, WTO Doc WT/DS308/R (7 October 2005) (‘Mexico – Taxes on Soft Drinks’); Appellate Body Report, Mexico – Taxes on Soft Drinks and Other Beverages, WTO Doc WT/DS308/AB/R (6 March 2006).

  98. 98.

    Report of the Panel Mexico – Soft Drinks case, paras. 5.311, 8.206.

  99. 99.

    Frischtak (2005), p. 950.

  100. 100.

    Mitchell and Heaton (2019), pp. 55–56.

  101. 101.

    WTO list of members and observers available at https://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm.

  102. 102.

    Article 3(4) of the African Continental Free Trade Area Protocol on Rules and Procedure on the Settlement of Disputes.

  103. 103.

    Article 5 of the African Continental Free Trade Area Protocol on Rules and Procedure on the Settlement of Disputes.

  104. 104.

    Tsighe (2019).

  105. 105.

    Akinkugbe (2020), p. 140.

  106. 106.

    European Union, Interim Appeal arrangement for WTO disputes becomes effective available at https://trade.ec.europa.eu/doclib/press/index.cfm?id=2143.

  107. 107.

    Mutumbwa (2021), p. 91.

  108. 108.

    Southern African Development Community available at https://www.sadc.int/about-sadc/sadc-institutions/tribun/.

  109. 109.

    Gathii (2011), p. 41.

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  1. ALP – East Africa, Kakamega, Kenya

    Annabel Nanjira

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  1. Leuphana University of Lüneburg, Lüneburg, Germany

    Jelena Bäumler

  2. Bundeswehr University Munich, Neubiberg, Germany

    Christina Binder

  3. Saarland University, Saarbrücken, Germany

    Marc Bungenberg

  4. University of Erlangen-Nuremberg, Erlangen, Germany

    Markus Krajewski

  5. Humboldt-Universität zu Berlin, Berlin, Germany

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  6. University of Glasgow, Glasgow, UK

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  7. Leuphana University of Lüneburg, Lüneburg, Germany

    Jörg Philipp Terhechte

  8. Université de Lausanne, Lausanne, Switzerland

    Andreas R. Ziegler

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Nanjira, A. (2022). Two Sides of the Same Coin? Analysing the Efficacy of the African Continental Free Trade Area and WTO’s Dispute Settlement Mechanisms in Resolving Trade Disputes Between African States. In: Bäumler, J., et al. European Yearbook of International Economic Law 2021. European Yearbook of International Economic Law, vol 12. Springer, Cham. https://doi.org/10.1007/8165_2022_82

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