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THE AFRICAN CONTINENTAL FREE TRADE AREA: TOWARD A NEW LEGAL MODEL FOR TRADE AND DEVELOPMENT FORTHCOMING 51 Geo. J. Int'l L. 4 (2020)

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Abstract

International trade law is at a turning point, and the rules as we know them are being broken, rewritten, and reshaped at all levels. At the same time that institutions like the World Trade Organization (WTO) face significant change and a global pandemic challenges the rules of the market, Africa's new mega-regional trade agreement, the African Continental Free Trade Area (AfCFTA), is emerging as a promising framework for redesigning international economic law. As this Article will argue, the AfCFTA presents a new normative approach to trade and development that is positioned to rewrite the rules in a more inclusive and equitable way and, over time, possibly affect global trade well beyond the African continent. Historically, trade and development have been linked through the framework of Special and Differential Treatment (S&D), which has been a central feature of the WTO and is increasingly shaping regional trade agreements (RTAs) as well. Although the connection between trade and development is more important than ever before, traditional S&D is not positioned to deliver on broader priorities of social and economic development in the current international climate. Fortunately, as this Article will argue, Africa's approach under the new AfCFTA sets the stage for a needed refresh of S&D. While the AfCFTA incorporates traditional aspects of S&D, it also includes elements of a forward-looking, rules-based approach to further economic and social development, advancing the Sustainable Development Goals (SDGs). This new dimension of S&D holds great potential for promoting integration through trade, representing the needs of a diverse group of countries in the rulemaking process, and reshaping international economic law more broadly to generate positive development outcomes. This Article begins with an assessment of the AfCFTA as an alternative model for trade and development law, evaluating the agreement in the historical and evolving context of S&D and examining its role in shaping a new normative approach to S&D. The AfCFTA, we argue, represents a shift from using S&D as a largely defensive trade approach to one that positions S&D as an affirmative tool for achieving sustainable development through the design and implementation of the rules of trade themselves, while still maintaining flexibility for countries
* Katrin Kuhlmann is a Visiting Professor of Law at Georgetown University Law Center and the President and
Founder of the New Markets Lab. Akinyi Lisa Agutu is a recent Master of Laws (LL.M.) graduate in International
Business and Economic Law at Georgetown University Law Center and a graduate of Strathmore University,
Nairobi, Kenya. This article builds upon earlier work by Katrin Kuhlmann focused on a new rules-led model for
trade and development and benefitted from feedback from students in the Institute of International Economic Law
Colloquium at Georgetown University Law Center led by Chris Brummer, comments from Colette Van der Ven on
an early draft, and the invaluable research support of Tara Francis of the New Markets Lab.
1
The African Continental Free Trade Area: Toward A New Legal Model For Trade and
Development
KATRIN KUHLMANN AND AKINYI LISA AGUTU*
ABSTRACT
International trade law is at a turning point, and the rules as we know them are being
broken, rewritten, and reshaped at all levels. At the same time that institutions like the World Trade
Organization (WTO) face significant change and a global pandemic challenges the rules of the
market, Africa’s new mega-regional trade agreement, the African Continental Free Trade Area
(AfCFTA), is emerging as a promising framework for redesigning international economic law. As
this Article will argue, the AfCFTA presents a new normative approach to trade and development
that is positioned to rewrite the rules in a more inclusive and equitable way and, over time, possibly
affect global trade well beyond the African continent.
Historically, trade and development have been linked through the framework of Special
and Differential Treatment (S&D), which has been a central feature of the WTO and is
increasingly shaping regional trade agreements (RTAs) as well. Although the connection between
trade and development is more important than ever before, traditional S&D is not positioned to
deliver on broader priorities of social and economic development in the current international
climate. Fortunately, as this Article will argue, Africa’s approach under the new AfCFTA sets the
stage for a needed refresh of S&D. While the AfCFTA incorporates traditional aspects of S&D, it
also includes elements of a forward-looking, rules-based approach to further economic and social
development and advance the Sustainable Development Goals (SDGs). This new dimension of
S&D holds great potential for promoting integration through trade, representing the needs of a
diverse group of countries in the rulemaking process, and reshaping international economic law
more broadly to generate positive development outcomes.
This Article begins with an assessment of the AfCFTA as an alternative model for trade
and development law, evaluating the agreement in the historical and evolving context of S&D and
examining its role in shaping a new normative approach to S&D. The AfCFTA, we argue,
represents a shift from using S&D as a largely defensive trade approach to one that positions S&D
as an affirmative tool for achieving sustainable development through the design and
implementation of the rules of trade themselves, while still maintaining flexibility for countries
that need it. This new approach may finally replace the old trade paradigm of the haves and have
nots” with a system in which trade rules can be designed to benefit all.
Although the AfCFTA is still at an early stage and will have to overcome formidable
challenges, this Article provides an initial assessment of the AfCFTA’s proactive new model in the
context of the substantive areas of law identified as next-stage (Phase II) negotiating priorities:
intellectual property rights (IPR), investment, and competition law. The Article’s comparative
assessment draws upon the laws of African nations, African and international RTAs, and other
proposals for international legal reform.
2
Finally, the Article looks to the future, positing that the AfCFTA could be the best legal
instrument available to break the stalemate in international rulemaking, design new trade law
approaches to pressing issues like global health and food security, and close the loop between
trade rules and development goals, including the seventeen SDGs. As the AfCFTA is rolled out
and implemented, it could have a profound impact on trade and development law, reshaping the
rules for Africa and perhaps the world as well.
I. INTRODUCTION
A. Unique Nature of the AfCFTA
B. Regional Integration and the AfCFTA
C. AfCFTA and the Sustainable Development Goals
II. ROLE OF SPECIAL AND DIFFERENTIAL TREATMENT IN TRADE AGREEMENTS
A. Historical Approach to S&D
B. Criticisms of S&D
C. S&D in the AfCFTA
III. COMPARATIVE ASSESSMENT OF THE AFCFTA IN KEY ISSUE AREAS
A. Intellectual Property Rights
1. Relevant Aspects of African Regional IP Law
2. Traditional Knowledge and Genetic Resources in African National IP Law
3. Provisions on Traditional Knowledge and Genetic Resources in Other RTAs
B. Investment Law
1. Pan-African Investment Code
2. African Regional Investment Law
3. South Africa’s Investment Law
4. Investment Reform in Other RTAs
C. Competition Law
1. African Regional Competition Frameworks
2. African National Competition Legislation
3. Competition Provisions in Other RTAs
IV. CONCLUSION: TOWARD A NEW MODEL FOR TRADE AND SUSTAINABLE DEVELOPMENT
3
I. INTRODUCTION
While the new African continent-wide trade agreement signals a significant shift in the
international legal order, African continental integration is not a new proposition.
1
The 1991 Abuja
Treaty Establishing the African Economic Community (Abuja Treaty) and 2000 Constitutive Act
of the African Union established the legal basis for a pan-African trade pact, building upon the
Organisation of African Unity (OAU) established under the 1980 Lagos Plan of Action.
2
In 2012, following up on the 2000 Constitutive Act of the African Union, African nations
decided to fast-track a continental free trade agreement. The African Continental Free Trade Area
(AfCFTA) has since moved from a shared vision to an executed trade agreement among fifty-four
of the fifty-five African Union (AU) nations in record time.
3
The AfCFTA was signed in March
2018 and entered into force in May 2019.
4
As of September 2020, the AfCFTA had been ratified
by thirty countries, with more ratifications in process.
5
It establishes the world’s largest regional
trade agreement (RTA) in terms of geographic size and partner states, connecting 1.2 billion people
1
See Mwangi S. Kimenyi & Katrin Kuhlmann, African Union: Challenges and Prospects for Regional Integration
in Africa, 7 WHITEHEAD J. DIPL. & INTL REL. 7, 7 (2012).
2
Org. of African Unity [OAU], Lagos Plan of Action for the Economic Development of Africa 1980-2000, at 5,
https://www.resakss.org/sites/default/files/OAU%201980%20Lagos%20Plan%20of%20Action%20for%20the%20E
conomic%20Development%20of%20Africa.pdf; Treaty Establishing the African Economic Community, June 3,
1991, 30 I.L.M. 1241, 8, https://au.int/sites/default/files/treaties/37636-treaty-0016_-
_treaty_establishing_the_african_economic_community_e.pdf; Constitutive Act of the African Union, July 11,
2000, at 5, https://au.int/sites/default/files/pages/34873-file-constitutiveact_en.pdf.
3
JONATHAN D. MOYER, ABIGAIL KABANDULA, DAVID K. BOHL, TAYLOR HANNA, IBRAHIM MAYAKI &
MARTIN BWALYA, AFRICAN UNION DEVELOPMENT AGENCY (AUDA-NEPAD) & FREDERICK S. PARDEE CENTER
FOR INTERNATIONAL FUTURES, CONDITIONS FOR SUCCESS IN THE IMPLEMENTATION OF THE AFRICAN CONTINENTAL
FREE TRADE AGREEMENT 5 (2020).
4
The consolidated AfCFTA text was adopted and signed at the 10th Extraordinary Summit of the AU Assembly in
Kigali, Rwanda on March 21, 2018 by forty-four African Heads of State and Government and entered into force on
May 30, 2019 following ratification by twenty-four countries. As of publication, thirty countries had ratified.
5
See AFR. UNION COMMN & U.N. ECON. COMMN FOR AFR., AFRICAN CONTINENTAL FREE TRADE AREA: UPDATED
QUESTIONS AND ANSWERS 1 (Jan. 2020); see also TRADE LAW CENTER (TRALAC), “STATUS OF AFCFTA
RATIFICATION,” https://www.tralac.org/resources/infographic/13795-status-of-afcfta-ratification.html.
4
in a market estimated to total from U.S. $2.5 trillion to upwards of U.S. $4 trillion.
6
Building upon
existing African RTAs in the form of African regional economic communities (RECs), the
AfCFTA signals political will towards establishing a unified legal institution to advance economic
and social development through trade.
The AfCFTA reflects both Africa’s new model of what a trade agreement should look like
and aspects of the multilateral legal framework of the World Trade Organization (WTO). The
AfCFTA has a strong development focus, highlighting economic and social development and legal
harmonization among its objectives,
7
and incorporating aspects of the AU’s Agenda 2063, which
prioritizes inclusive social and economic development and links Africa’s growth and integration
to the Sustainable Development Goals (SDGs).
8
The AfCFTA follows a “framework agreement” model, with a core agreement forming a
foundation that will be built out through several phases of negotiation. Phase I of the negotiations
established the Protocols on Trade in Goods, Trade in Services, and Dispute Settlement, with
corresponding schedules of market access concessions and rules of origin (ROO).
9
The
agreement’s mechanism for dispute settlement, which is modeled largely on the WTO Appellate
Body, is contained in the Protocol on Rules and Procedures on the Settlement of Disputes (and
accompanying annexes).
10
The Agreement Establishing the AfCFTA also includes annexes on
6
See id.; see also Landry Signé, Africa’s Big New Free Trade Agreement, Explained, WASH. POST (Mar. 29, 2018),
https://www.washingtonpost.com/news/monkey-cage/wp/2018/03/29/the-countdown-to-the-african-continental-
free-trade-area-starts-now/?utm_term=.7ef4d48b47cc.
7
Agreement Establishing the African Continental Free Trade Area art. 3, Mar. 21, 2018, 58 I.L.M. 1028 [hereinafter
AfCFTA].
8
African Union Commission, Agenda 2063 Framework DocumentThe Africa We Want (2015),
https://au.int/en/agenda2063/overview.
9
TRALAC, THE AFRICAN CONTINENTAL FREE TRADE AREA: A TRALAC GUIDE 4 (6th ed. Nov. 2019),
https://www.tralac.org/documents/resources/booklets/3028-afcfta-a-tralac-guide-6th-edition-november-
2019/file.html.
10
Consultations shall be sought in the first instance, after which a dispute may be referred to the Dispute Settlement
Body (DSB) requesting establishment of a Dispute Settlement Panel. AfCFTA, Protocol on Rules and Procedures on
5
ROO, non-tariff barriers (NTBs), customs cooperation, trade facilitation, transit, trade remedies,
sanitary and phytosanitary measures (SPS), and technical barriers to trade (TBT), which track with
African and WTO law.
11
Phase I, which will liberalize trade in goods and services by ninety
percent,
12
was meant to become fully operational on July 1, 2020, although the current COVID-
19 crisis has delayed this timeline until early 2021.
13
Negotiations on Phase II issues are scheduled
to begin once Phase I is operational and will include Protocols on Intellectual Property Rights
(IPR), Competition Policy, and Investment.
14
A Phase III to develop a Protocol on E-Commerce
has also been formally approved by the AU Assembly.
15
A. Unique Nature of the AfCFTA
Several attributes make the AfCFTA unique and worthy of much closer study as the
agreement advances through its different phases. One is the timing of the AfCFTA, which has
generated significant political will at the same time that the WTO crisis, Brexit, and the U.S.-China
trade agreements are wreaking havoc on international trade law. If the AfCFTA is able to break
new ground in advancing a trade model focused on sustainable development, including in
the Settlement of Disputes, art. 6, Mar. 21, 2018, 58 I.L.M. 1028, 1067. The AfCFTA is not the African first mega-
regional body to model dispute settlement on the WTO Dispute Settlement Body; the Tripartite Free Trade
Agreement among COMESA, the EAC, and SADC also follows this model. See Olabisi D. Akinkugbe, Dispute
Settlement Under the African Continental Free Trade Area Agreement: A Preliminary Assessment, AFR. J. INTL &
COMP. L. (forthcoming 2020).
11
Compiled Annexes to the Agreement Establishing the African Continental Free Trade Area, TRALAC,
https://www.tralac.org/documents/resources/african-union/2163-compiled-annexes-to-the-afcfta-
agreement-legally-scrubbed-version-signed-16-may-2018/file.html (last visited Aug. 29, 2020).
12
The remaining ten percent will be divided among sensitive goods (seven percent), with a longer phase-in period,
and excluded goods (three percent). LANDRY SIGNE & COLETTE VAN DER VEN, KEYS TO SUCCESS FOR THE AFCFTA
NEGOTIATIONS, BROOKINGS INSTITUTION 5 (May 2019), https://www.brookings.edu/wp-
content/uploads/2019/05/Keys_to_success_for_AfCFTA.pdf; Developments in Competition Law in Africa, LEX
AFRICA (Aug. 22, 2008), https://www.lexafrica.com/2018/08/developments-in-competition-law-in-africa/.
13
Schedules of tariff concessions and commitments on services remain to be finalized (as do aspects of rules of
origin), in order to make Phase I operational.
14
AfCFTA, supra note 7, art. 4.
15
African Union, Decision on the African Continental Free Trade Area (AfCFTA) Doc. Assembly/AU/4 (XXXIII),
Assembly/AU/Dec. 751 (XXXIII).
6
complicated legal areas like IP and traditional knowledge, competition law, and investment, it
could propel international law forward at a critical time when avenues for multilateral negotiations
have stalled. It could also serve as a unifying force in response to the COVID-19 pandemic,
particularly if tariff and non-tariff barriers are dismantled within the continent to strengthen
regional trade.
16
Another unique feature of the AfCFTA is its design. The AfCFTA follows a relatively
distinctive model for RTAs, taking the form of a “progressive” or “incremental” trade agreement,
with commitments and negotiating rounds staged over time and tailored to the priorities and
capabilities of the negotiating parties.
17
It bears some similarity to the WTO Agreement on Trade
Facilitation (TFA),
18
which tailors commitments to countries’ needs and capacities and allows for
incremental implementation, and of course has much in common with existing African RTAs,
which incorporate flexibility and variable geometry into their structures.
19
The AfCFTA’s
structure allows for periodic review of the agreement, currently intended to take place every five
years, and the flexibility to negotiate additional instruments, which will then become an integral
16
See Ibrahim Assane Mayaki, How Africa’s Economies Can Hedge Against COVID-19, PROJECT SYNDICATE
(Mar. 27, 2020), https://www.project-syndicate.org/commentary/africa-trade-integration-hedge-against-covid19-by-
ibrahim-assane-mayaki-2020-03.
17
In addition to the WTO TFA, other trade agreements reflect a progressive approach. For example, the U.S.-
Morocco FTA adopted a progressive approach for the agricultural sector, due to its significance and growth
potential. For a summary of other development-focused aspects of RTAs, see Katrin Kuhlmann, Post-AGOA Trade
and Investment: Policy Recommendations for Deepening the U.S. Trade and Investment Relationship, Testimony
before the U.S. International Trade Commission, Washington, D.C., Jan. 28, 2016; NEW MKTS. LAB & HARVARD
LAW & INTL DEV. SOCY, HARVARD LAW SCHOOL TRADE INNOVATION INITIATIVE: SUMMARY OF FINDINGS ON
TRADE AND DEVELOPMENT IN FREE TRADE AGREEMENTS (2015), https://cb4fec8a-9641-471c-9042-
2712ac32ce3e.filesusr.com/ugd/7cb5a0_37610cba6cde4f02afb3d0cfa3ab7fb8.pdf.
18
Protocol Amending the Marrakesh Agreement Establishing the World Trade Organization, Feb. 22, 2017, WTO
Doc. WT/L/940. The WTO TFA Agreement, which allows countries to prioritize commitments in three categories
depending upon needs, capacity, and resources (Categories A, B, and C), “recognizes differences in countries’
regulatory systems and capabilities and both phases in reforms and links to aid funding.” KATRIN KUHLMANN,
CENTER FOR STRATEGIC & INTL STUDIES, THE HUMAN FACE OF TRADE AND FOOD SECURITY: LESSONS ON THE
ENABLING ENVIRONMENT FROM KENYA AND INDIA 37 (2017).
19
James Thuo Gathii, African Regional Trade Agreements as Flexible Legal Regimes, 35 N.C. J. INTL L. & COM.
REG. 572, 573 (2010).
7
part of the agreement.
20
This inherent flexibility should allow the AfCFTA to respond to new trade
opportunities and challenges as they arise, including the recent COVID-19 pandemic and broader
sustainable development considerations.
In its design, the AfCFTA also explicitly references sustainable development, calling to
mind language in the Preamble to the WTO.
21
The AfCFTA’s objectives include sustainable and
inclusive socio-economic, gender equality, and food security,
22
linking the AfCFTA with the
SDGs, in line with Agenda 2063.
A third unique feature of the AfCFTA is its scale. While it has features in common with
Africa’s existing RTAs, the AfCFTA aims to create a larger, unified trade bloc, with the potential
to boost both regional rule of law and Africa’s market prospects. With respect to the latter, although
intra-regional trade in Africa has been low in both absolute and comparative terms, economists
predict that the AfCFTA will boost regional trade by over fifty percent (around $34.6 billion).
23
The continental market will only be able to reach its potential, however, if the AfCFTA can
succeed in creating clear and reliable rules for the market that are effectively implemented.
20
AfCFTA, supra note 7, arts. 8 and 28.
21
The Preamble to the Marrakesh Agreement Establishing the World Trade Organization states, “Recognizing that
their relations in the field of trade and economic endeavor should be conducted with a view to raising standards of
living . . . and expanding the production of and trade in goods and services, while allowing for the optimal use of the
world's resources in accordance with the objective of sustainable development, seeking both to protect and preserve
the environment and to enhance the means for doing so in a manner consistent with their respective needs and
concerns at different levels of economic development.” Marrakesh Agreement Establishing the World Trade
Organization, Apr. 15, 1994, 1867 U.N.T.S. 154 [hereinafter Marrakesh Agreement].
22
AfCFTA, supra note 7, art. 3(e), (g).
23
Stephen Karingi & Simon Mevel, Deepening Regional Integration in Africa: A Computable General Equilibrium
Assessment of the Establishment of a Continental Free Trade Area followed by a Continental Customs Union 17
(selected paper for Presentation at the seventh African Economic Conference, Kigali, Rwanda, Oct. 30, 2012 Nov.
2, 2012)),
https://aec.afdb.org/sites/default/files/2019/12/04/deepening_regional_integration_in_africa_a_computable_general_
equilibrium_assessment_of_the_establishment_of_a_continental_free_trade_area_followed_by_a_continental_custo
ms_union.pdf. These gains will be important, given the number of smaller countries, many of which are landlocked,
with limited natural resources. See also Osmond Vitez, The Benefits of Free Trade for African Countries, HOUS.
CHRON. (Feb. 12, 2019), https://smallbusiness.chron.com/benefits-trade-developing-countries-3834.html.
8
B. Regional Integration and the AfCFTA
While innovative, the AfCFTA’s model will face some challenges. In contrast to other
regional integration movements, African regional integration has taken place through a series of
legal instruments that have been developed and implemented in a non-linear and overlapping
manner.
24
While the Abuja Treaty provided a framework for the RECs, it did not establish a
binding structure, which explains the differences in status and legal structure among the current
RECs.
25
The RECs also span differing legal systems (including common law, civil code, and
customary legal systems), further adding to the diversity and patchwork of rules.
Figure 1 below depicts the overlapping membership among the eight RECs officially
recognized by the AU.
26
24
See Gathii, supra note 19.
25
GERHARD ERASMUS, TRALAC, DOES THE AFCFTA ENABLE AFRICA TO SPEAK WITH ONE VOICE ON TRADE
ISSUES? 5, (March 2020), https://www.tralac.org/publications/article/14456-does-the-afcfta-enable-africa-to-speak-
with-one-voice-on-trade-issues.html.
26
The Arab Maghreb Union (AMU), the Common Market for Eastern and Southern Africa (COMESA), the
Community of Sahel-Saharan States (CEN-SAD), the East African Community (EAC), the Economic Community
of Central African States (ECCAS), the Economic Community of West African States (ECOWAS), the
Intergovernmental Authority on Development (IGAD), and the Southern African Development Community
(SADC).
9
Figure 1: Overlapping Membership in Existing African Regional Economic Communities
27
Among these, the Common Market for Eastern and Southern Africa (COMESA), East African
Community (EAC), Economic Community of West African States (ECOWAS), and Southern
African Development Community (SADC) are perhaps the most advanced in terms of economic
and legal integration.
28
In 2015, the Tripartite Free Trade Area (TFTA), which will feed into
broader integration under the AfCFTA, was launched to integrate COMESA, the EAC, and
SADC.
29
While this could reinforce the AfCFTA in some respects, it also adds another layer of
complexity to continental integration, since the TFTA is itself still being developed. Overlapping
membership among the RECs could also complicate the establishment of a common external
tariff
30
and might impact regulatory harmonization and implementation efforts to address NTBs.
31
Additionally, the lack of a traditional most-favored nation (MFN) clause could perpetuate a
fragmented system of regional rules and complicate integration under the AfCFTA.
32
The AfCFTA has taken on the formidable task of “resolv[ing] the challenges of multiple
and overlapping memberships and expedit[ing] the regional and continental integration
processes.”
33
It is not clear how this process will unfold, particularly since the RECs have already
27
See Brian Berkey, Shifting US-Africa Relations, WHARTON PUBLIC POLICY INITIATIVE (Aug. 4, 2019),
https://publicpolicy.wharton.upenn.edu/live/news/3084-shifting-us-africa-relations.
28
See Kimenyi & Kuhlmann, supra note 1, at 7; see also KATRIN KUHLMANN, SYNGENTA FOUNDATION FOR
SUSTAINABLE AGRICULTURE HARMONIZING REGIONAL SEED REGULATIONS IN SUB-SAHARAN AFRICA: A
COMPARATIVE ASSESSMENT (2015).
29
Andrew Brasington, Prospects of an African Continental Free Trade Area (CTFA) 5 (2017) (unpublished written
assignment) (on file with author).
30
Elina Fergin, Tangled up in a Spaghetti BowlTrade Effects of Overlapping Preferential Trade Agreements in
Africa 11 (2011) (unpublished Bachelor Thesis in Economics) (on file at the School of Economics and Management,
Lund University).
31
Thabane Nhlengethwa, The COMESA-EAC-SADC Tripartite Free Trade Area Negotiations 12 (Aug. 30, 2016)
(on file with the University of the Witwatersrand).
32
SIGNE & VAN DER VEN, supra note 12 (“While consistent with the principle of preserving the acquis, the lack of a
traditional MFN clause in the AfCFTA also risks the creation of a patchwork of rights and obligations that differ
across each of the State Parties.”).
33
AfCFTA, supra note 7, art. 3(h).
10
developed a considerable, and sometimes inconsistent, body of law. However, several of the
AfCFTA’s articles shed some light on this question. Article 5 of the AfCFTA provides that the
Free Trade Areas (FTAs) established under the RECs will be used “as building blocks for the
AfCFTA.”
34
Article 19 of the AfCFTA further articulates that the AfCFTA shall prevail in the
case of a conflict or inconsistency between it and a regional set of rules and enshrines the acquis
principle that higher levels of integration achieved through the RECs will be maintained.
35
While
Article 19 appears to indicate that existing legal structures under the RECs will be integrated into
the AfCFTA framework, the reference in the AfCFTA text to the acquis principle, which is also
noted in Article 5,
36
could highlight that the AfCFTA will not fully take on the task of reconciling
overlap (and legal differences) among the RECs.
37
Implementation of rules has also been a persistent challenge,
38
and, while not unique to the
AfCFTA (or Africa for that matter), this challenge will only intensify with the ambitious plans for
continental harmonization.
39
As has been the case with the RECs, changes in law that result from
34
Id. art. 5(b).
35
Id. art. 19.
36
Id. art. 5(f).
37
Trudi Hartzenberg, AfCFTA Negotiations After KigaliKeeping an Eye on the End Game, TRALAC (June 20,
2018), https://www.tralac.org/blog/article/13119-afcfta-negotiations-after-kigali-keeping-an-eye-on-the-end-
game.html (“[Preserving the acquis] means that overlapping membership in the RECs will not be addressed in the
AfCFTA even though one of the AfCFTA’s general objectives is to resolve this challenge.” The acquis principle
“first entered the African regional integration terminology” in the context of the Tripartite Free Trade Agreement
(TFTA) discussions.); SIGNE & VAN DER VEN, supra note 12.
38
There is often a considerable divide between the rules as written and the rules as applied. See, e.g., KATRIN
KUHLMANN, REFRAMING TRADE AND DEVELOPMENT: BUILDING MARKETS THROUGH LEGAL AND REGULATORY
REFORM (2015), http://e15initiative.org/publications/reframing-trade-and-development-building-markets-through-
legal-and-regulatory-reform/; see also Trudi Hartzenberg, Regional Integration in Africa (World Trade Org., Econ.
Research and Statistics Div., Working Paper No. ERSD-2011-14, 2011).
39
Legal implementation challenges are not unique to African countries and are a challenge to measure and track.
However, legal and implementation challenges can be assessed based on common dimensions. See Approach to
Legal and Regulatory Reform, NEW MARKETS LAB (2019), https://www.newmarketslab.org/about; KATRIN
KUHLMANN, THE AFRICA REGIONAL INTEGRATION INDEX (forthcoming) https://www.integrate-africa.org/ (a
forthcoming work which is a helpful tool for understanding infrastructure, trade, and other aspects of
implementation).
11
the AfCFTA will also have to be domesticated into national law in the partner states
40
and
implemented through a series of steps, and this process differs depending upon a country’s legal
structure.
41
C. AfCFTA and the Sustainable Development Goals
Another challenge for the AfCFTA will be establishing a comprehensive approach to
sustainable development. While the AfCFTA references sustainable development in its objectives
and specifically refers to some areas covered by the SDGs (such as gender equality and food
security),
42
full alignment with the seventeen SDGs and their 169 goals and 230 targets will require
addressing a number of additional areas of law beyond those slated for Phase II and III
negotiations. These include strategies to address food security, health (including rules on
medicines and medical equipment, which are increasingly important in light of the COVID-19
pandemic), and environment and climate change, along with binding rules on gender, labor, and
other aspects of human rights.
43
While a full assessment of these areas is beyond the scope of this
Article, some preliminary observations are included in Section IV.
Through the AfCFTA, the world’s largest regional trading bloc could now change the rules
from within, returning to the multilateral forum with a much stronger negotiating position. The
AfCFTA’s approach to its priority “rules” areas—IP, competition, and investment (and possibly
other issues at a later stage)is likely to build upon recent trends and existing legal models within
40
See, e.g., Laura Páez, A Continental Free Trade Area: Imperatives for Realizing a Pan-African Market, 50 J.
WORLD TRADE 533 (2016). It is, however, important to note that domestication practices vary among Common Law
and Civil Law jurisdictions, for example.
41
See KUHLMANN, supra note 28.
42
AfCFTA, supra note 7, art. 3.
43
Derived from Katrin Kuhlmann, Chantal Line Carpentier, Tara Francis, & Malou Le Graet, Trade Policy for a
Resilient, Inclusive, and Sustainable Development in A New International Economic Order (June 2020),
https://cb4fec8a-9641-471c-9042-
2712ac32ce3e.filesusr.com/ugd/095963_4460da2de0e746dd81ad32e003cd0bce.pdf.
12
the continent (see Section III) and intentionally reshape current international law. In doing so, the
AfCFTA could initiate a new, sustainable development approach to rulemaking through RTAs,
spurring a “WTO+” driven by the economic and social development considerations of many
instead of market dominance by the few, particularly if the less legally and economically advanced
nations in Africa have an equal voice in crafting emerging law. Over time, the rules-based
approach, and advances in international law, established through the AfCFTA could shape other
trade agreements as well as future rounds of multilateral negotiations.
This Article will assess the AfCFTA’s legal model through three interconnected lines of
analysis. It first evaluates the AfCFTA through the lens of S&D, drawing the conclusion that a
new normative approach stems from the AfCFTA’s design and scope that incorporates some
traditional elements of development-led trade but paves the way for a more progressive rules-based
approach to broader economic and social development.
44
The Article then assesses the substantive
issue areas slated for Phase II of the AfCFTA (IPR, investment, and competition law), highlighting
the new direction in international economic law that could emerge from the AfCFTA. The Article
concludes by exploring the possibility that the AfCFTA will evolve into a more comprehensive,
and hopefully more inclusive, model for trade and sustainable development over time.
II. ROLE OF SPECIAL AND DIFFERENTIAL TREATMENT IN TRADE AGREEMENTS
Trade and development scholars have traditionally approached the design of trade agreements,
and how rules are applied within these agreements, through S&D.
45
Simply put, S&D affords
“special rights” for developing countries,
46
as discussed below, and it has been part of the system
44
An earlier work by Katrin Kuhlmann called for such an approach to S&D. See KUHLMANN, supra note 38.
45
See Alexander Keck & Patrick Low, Special and Differential Treatment in the WTO: Why, When, and How?
(World Trade Org. Economic Research and Statistics Division, Working Paper No. ERSD-2004-03, 2004).
46
James Bacchus & Inu Manak, The Development Dimension: What to do About Differential Treatment in Trade,
CATO INSTITUTE (Apr. 13, 2020), https://doi.org/10.36009/PA.887; see also D.B. Magraw, Existing Legal Treatment
13
of international trade in some form since the middle of the last century. While traditional aspects
of S&D appear in the AfCFTA model, a new normative rules-based dimension of S&D appears to
arise from the AfCFTA as well. The subsections below examine the historical context of S&D,
summarize the criticisms that have been raised against its application, and present the new model
for S&D that stems from the AfCFTA’s design.
A. Historical Approaches to S&D
Historically,
47
S&D has afforded special trade treatment for developing economies and
least developed countries (LDCs) in particular,
48
usually in the form of non-reciprocal treatment,
special safeguards, longer transition periods to implement legal requirements, preferential trade
arrangements with developed markets, and aid for trade.
49
S&D, as generally accepted, is underpinned by several broad themes and phases, which
roughly track with the evolution of the international trade rules. One phase encompasses
differential treatment in the form of less than full reciprocity and trade preference programs (this
was the main approach to S&D during its early years under the General Agreement on Tariffs and
Trade (GATT) phase), which led to non-reciprocal trade arrangements like the trade preference
of Developing Countries: Differential, Contextual and Absolute Norms, 60 COLO. J. OF INTL ENVTL. L. AND POLY
69 (1989).
47
See Keck & Low, supra note 45.
48
There is no definition of “developing country” in the global trading system, and countries have instead self-
designated to receive S&D treatment, leading to some of the recent criticism against S&D. LDCs are defined based
on a three-part test that assesses per capital Gross National Income (GNI), human assets, and economic
vulnerability. LDC Identification Criteria and Indicators, UNITED NATIONS,
https://www.un.org/development/desa/dpad/least-developed-country-category/ldc-criteria.html.
49
The WTO Secretariat provides a useful categorization of S&D provisions based on a six-fold typology. WTO
Secretariat, Special and Differential Treatment Provisions in WTO Agreements and Decisions, WTO Doc.
WT/COMTD/W/239 (Oct. 12, 2018). ((1) Provisions Aimed at Increasing Trade Opportunities of Developing
Country Members, including trade preference programs; (2) Provisions to Safeguard the Interests of Developing
Country Members, including around 100 provisions related to development across disciplines and WTO agreements;
(3) Flexibility of Commitment, of Action, and Use of Policy Instruments; for example, GATT Article XVIII and
flexibilities under the WTO Agreement on Subsidies and Countervailing Measures (4) Transitional Time Periods;
(5) Technical Assistance; and (6) Provisions Relating to LDCs, with a note to Paragraph 2(d) of the Enabling
Clause); see also PAUWELYN, GUZMAN, AND HILLMAN, INTERNATIONAL TRADE LAW 74549 (3d ed.).
14
programs that unilaterally opened developed country markets to trade from emerging markets.
50
Another phase, which coincided with the Uruguay Round of trade negotiations and establishment
of the WTO, focuses on providing flexibility in implementing trade rules and safeguarding
developing country trade interests.
51
This approach resulted in longer transition periods and
exemptions from the rules in order to give developing countries some degree of flexibility and
even policy autonomy in integrating and implementing new economic rules.
52
The need for
flexibility grew in importance as multilateral rules became more comprehensive and negotiations
more reciprocal (and as the rules of trade became more complex and increasingly included
domestic, “behind the border” regulations across a range of substantive areas).
53
In addition to
flexibility in adherence to the rules, capacity building and technical assistance, or aid for trade,
became another staple of S&D. However, aid for trade has mainly been pursued on a “best-
endeavor” basis
54
(i.e., not as a result of binding law). Further, while S&D is not explicitly
50
These include the Generalized System of Preferences (GSP) program and duty-free quota-free (DFQF) for LDCs,
which must also be “generalized,” as well as region-specific programs like the African Growth and Opportunity Act,
which fall outside of the standard legal authority (Enabling Clause) for preference programs. See Appellate Body
Report, European CommunitiesConditions for the Granting of Tariff Preferences to Developing Countries, WTO
Doc. WT/DS246/AB/R (adopted Apr. 7, 2004), https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds246_e.htm.
While trade preference programs have played a distinct role in development, they have also been criticized for
excluding goods that are essential to developing country economies, thus leaving little room for economic
diversification. See, e.g., KUHLMANN, supra note 38.
51
Constantine Michalopoulos, The Role of Special and Differential Treatment for Developing Countries in GATT
and the World Trade Organization 20 (World Bank, Policy Research Working Paper No. 2388, 2000).
52
Id. at 18.
53
These include issues covered by Uruguay Round agreements, including agriculture, TBT, SPS, safeguards, trade-
related investment measures (TRIMS), IPR, and subsidies and countervailing measures. See Constantine
Michalopoulos, Trade Policy and Market Access Issues for Developing Countries (World Bank, Policy Research
Working Paper No. 2214, 1999); see also Secretariat of the U.N. Conference on Trade and Development,
International Trade Negotiations, Regional Integration and South-South Trade, Especially in Commodities
(Background Paper prepared for the Doha High-Level Forum on Trade and Investment, Background Paper No. 2,
Dec. 2004), https://www.g77.org/doha/Doha-BP02-International_Trade_Negotiations.pdf.
54
See Lily Sommer & Jamie MacLeod, How Important is Special and Differential Treatment for an Inclusive
AfCFTA?, in INCLUSIVE TRADE IN AFRICA: THE AFRICAN CONTINENTAL FREE TRADE AGREEMENT IN COMPARATIVE
PERSPECTIVE 71 (David Luke & Jamie MacLeod eds., Routledge 2019); see also Bernard Hoekman,
Operationalizing the Concept of Policy Space in the WTO: Beyond Special and Differential Treatment, 8 J. INTL
ECON. L. 405 (2005).
15
mentioned in the General Agreement on Trade in Services (GATS Agreement), an interesting case
has been made that the positive list approach in GATS represents another variation on S&D that
provides “built-in flexibility” to allow countries to determine which sectors should be liberalized
(or not) while also largely rendering insignificant the distinctions between developing countries
and LDCs that have characterized S&D throughout its history.
55
The WTO TFA, which recognizes
differences in countries’ regulatory systems and capabilities and allows countries to undertake and
prioritize commitments based on their specific needs, represented another significant development
in S&D (and multilateral rulemaking itself).
56
The request for policy autonomy has also been central to the S&D debate and involves
striking a balance between “core trade policy rules” and “policy space” for developing economies
to pursue policy and regulatory approaches that will best suit a country’s needs as economic
development advances.
57
Not surprisingly, policy autonomy continues to arise in the context of
RTAs and has already shaped the AfCFTA’s development.
58
Legally, S&D has also evolved over time. While the discussion on S&D dates back to the
middle of the last century, S&D was first legally enshrined in Part IV of the GATT in 1965 (Article
XXXVI:8 of Part IV notably contains the principle of non-reciprocity).
59
Unfortunately, Part IV
55
COLETTE VAN DER VEN, SPECIAL AND DIFFERENTIAL TREATMENT IN THE CONTEXT OF THE DIGITAL ERA (CUTS
International 2018).
56
The WTO Trade Facilitation Agreement allows countries to stage implementation based on their needs and
capabilities. Countries must notify their commitments under three categories: Category A (immediate
implementation), Category B (implementation following a transition period), and Category C (implementation
following a transition period with capacity building support). Protocol Amending the Marrakesh Agreement
Establishing the World Trade Organization, supra note 18, at 5.
57
See Hoekman, supra note 54; see also Alvaro Santos, Carving Out Policy Autonomy for Developing Countries in
the World Trade Organization: The Experience of Brazil and Mexico, 52 VA. J. INTL L. 551 (2012).
58
Costantinos Berhutesfa Costantinos, The African Continental Free Trade Area: Lessons from Other Free Trade
Agreements in Other Parts of the World, Navigating the Political and Economic Differences, Poor Infrastructure,
Stability, Synchronising AfCFTA with Other Continental Integration Schemes (AfCFTA interview transcript) at 2.
59
General Agreement on Tariffs and Trade, Oct. 30, 1947, 61 Stat. A-11, 55 U.N.T.S. 194 [hereinafter GATT]. See
also Bacchus & Manak, supra note 46.
16
of the GATT also consists largely of “best endeavor” language with no real legal force.
60
To
address this, elements of S&D were codified through the 1979 Decision on Differential and More
Favorable Treatment, Reciprocity and Fuller Participation of Developing Countries (Enabling
Clause).
61
The Enabling Clause elaborated on S&D, stating that it should “be designed and, if
necessary, modified, to respond positively to the development, financial, and trade needs of
developing countries.”
62
Yet, even though the Enabling Clause made important advances in S&D,
codifying non-reciprocity, establishing a permanent waiver for trade preference programs, and
establishing different rules for South-South trade agreements, S&D has remained largely non-
binding.
63
Other provisions, like Article XVIII of GATT 1994, which provides flexibility for
developing countries in addressing balance of payments problems or the promotion of infant
industries, were meant to address specific concerns, but they have proven to be challenging to
administer.
64
In addition to GATT Part IV, GATT Article XVIII, and the Enabling Clause, various
provisions on S&D are scattered throughout WTO Agreements, with 183 references overall.
65
As new rules also came about in agriculture, trade in services, and IPR, concern with
adopting and implementing a growing book of rules mounted, and many countries emphasized that
they had not been involved in the creation of the rules to begin with.
66
The Doha Development
60
See Pallavi Kishore, Special and Differential Treatment in the Multilateral Trading System, 13 CHI. J. INTL L.
363 (2020).
61
Differential and More Favourable Treatment Reciprocity and Fuller Participation of Developing Countries, ¶ 5,
L/4903 (Nov. 28, 1979), GATT B.I.S.D. (26th Supp.), at 20305 (1980) [hereinafter Enabling Clause].
62
Id. ¶ 3(c); see also Keck & Low, supra note 45.
63
See, e.g., Kishore, supra note 60.
64
General Agreement on Tariffs and Trade (GATT), Oct. 30, 1947, 55 U.N.T.S. 194, 258, as incorporated and
modified by General Agreement on Tariffs and Trade 1994, Marrakesh Agreement Establishing the World Trade
Organization, Apr. 15, 1994, Annex 1A, 1869 U.N.T.S. 154 [hereinafter GATT 1994].
65
World Trade Organization, Special and Differential Treatment Provisions in WTO Agreements and Decisions,
WTO Doc. WT/COMTD/W/239 (2018).
66
See Michalopoulos, supra note 51, at 7.
17
Round, launched in 2001,
67
was meant to address a number of concerns with S&D, some of which
are discussed in greater detail below, but the Round broke down in 2008 and has not been
successfully revived.
68
Proposals for S&D reform have remained on the table, and the G90
(developing countries and LDCs) recently pressed for reform in connection with the December
2017 Buenos Aires Ministerial.
69
S&D has also arisen in the broader context of WTO reform,
particularly with regard to the classification of developing countries,
70
which is discussed below.
B. Criticisms of S&D
Despite the evolution in S&D, it has been subject to a range of criticism, with some
stressing that S&D has not done enough to promote development through trade and others seeking
a more nuanced normative approach.
71
A number of governments and experts are also increasingly
pressing for reconsideration of what it means to be a developing country.
72
Developing economies have argued that S&D flexibilities have not been an effective
development tool,
73
resulting in part from the vague and hortatory nature of many S&D provisions
67
Paragraph 44 of the Doha Declaration states: “We reaffirm that provisions for special and differential treatment
are an integral part of the WTO Agreements. We note the concerns expressed regarding their operation in addressing
specific constraints faced by developing countries, particularly least-developed countries…We therefore agree that
all special and differential treatment provisions shall be reviewed with a view to strengthening them and making
them more precise, effective and operational . . .” World Trade Organization, Ministerial Declaration of 14
November 2001, WTO Doc. WT/MIN(01)/DEC/1, 41 I.L.M. 746 (2002) [hereinafter Doha Declaration]; see
Bacchus & Manak, supra note 46.
68
See David Kleinmann & Joe Guinan, The Doha Round: An Obituary, GLOBAL GOVERNANCE PROGRAMME, Jun.
2011, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1881069. Indeed, the failure to agree on review of and
improvements to S&D provisions contributed to the failure of the Doha Round. See Bacchus & Manak, supra note
46.
69
General Council for Trade Negotiations Committee, Draft G90 Ministerial Declaration: Special and Differential
Treatment, WTO Doc. JOB/GC/160 (Nov. 28, 2017).
70
EUROPEAN UNION, CONCEPT PAPER ON WTO MODERNISATION (2018). For a helpful discussion of these
developments and S&D in the context of digital trade, see VAN DER VEN, supra note 55.
71
See, e.g., Keck and Low, supra note 45; Hoekman, supra note 54; BERNARD HOEKMAN, RE-THINKING ECONOMIC
DEVELOPMENT IN THE WTO, (European Univ. Inst., Robert Schuman Ctr. for Advanced Studies Global Governance
Programme 2013); KUHLMANN, supra note 38.
72
See Bacchus & Manak, supra note 46.
73
Draft G90 Ministerial Declaration, supra note 69.
18
and the complexity of using S&D (for example, the procedural requirements of GATT Article
XVIII have proven to be difficult to navigate).
74
Others have highlighted that S&D has not
performed well because it has lacked strategy, evidence, and economic and welfare justification.
75
Weak institutional and implementation capacity, which tend to remain a challenge even with
extended time periods for compliance, have also been flagged as concerns.
76
Political and
economic ideology have underpinned application of S&D as well.
77
Another criticism has been the value of S&D, particularly as tariffs have decreased and
preferences margins eroded.
78
Although additional market access for emerging economies can
sometimes be negotiated through RTAs under these circumstances,
79
even if desirable, it is
important to note that RTAs can present challenges to effective application of S&D. For example,
while in some respects the EU’s Economic Partnership Agreements (EPAs), which were
negotiated to replace unilateral trade preferences, expand market access for developing economies
and highlight a more comprehensive approach to S&D, experts and scholars have also raised issues
74
See, e.g., Keck & Low, supra note 45; Sommer & MacLeod, supra note 54; VAN DER VEN, supra note 55.
75
S&D is often not based on cost-benefit analysis, which could help to more effectively assessand ultimately
addressdevelopment considerations. Hoekman, supra note 54, at 23; see also Keck and Low, supra note 45.
76
Michalopoulos, supra note 51, at 16.
77
See Katrin Kuhlmann, Post-AGOA Trade and Investment: Policy Recommendations for Deepening the U.S.
Trade and Investment Relationship, Testimony before the U.S. International Trade Commission (Jan. 28, 2016); see
also Bacchus & Manak, supra note 46.
78
Nicolas Imboden, Special and Differential Treatment: A New Approach May Be Required, BRIDGES AFR., Nov.
2017, at 21.
79
Michalopoulos, supra note 53, at 1.
19
with their impact.
80
South-south RTAs and mega-regional deals,
81
such as the AfCFTA, represent
a different aspect of this progression.
Another ongoing challenge to S&D and trade and development is the broad categorization
of “developing” countries, which raises questions of effectiveness and equity and has implications
for the scope of S&D treatment as well.
82
In particular, developing country self-designation has
recently received increased attention in the context of WTO reform.
83
Although varying arguments
and rationales exist regarding classification of developing countries,
84
differentiation in S&D now
appears to be the trend, which could enable S&D to operate based on more tailored development
needs rather than broad generalizations.
Finally, the normative basis of S&D also requires reassessment. In order for trade
agreements to function as tools for economic and social development,
85
the design of agreements
80
The EPA model applies S&D to liberalize trade in 80 percent of goods, while carving out 20 percent of trade as
“sensitive.” If not approached carefully, this can lock in the status quo and discourage further growth and
diversification. Patrick Messerlin, Economic Partnership Agreements: How to Rebound, in UPDATING ECONOMIC
PARTNERSHIP AGREEMENTS TO TODAYS GLOBAL CHALLENGES 22 (Emily Jones & Darlan F. Marti eds., German
Marshall Fund 2009). The EPAs have proven to be a challenging model for S&D and contain elements that
discourage, rather than encourage, regional trade and integration. Kimenyi & Kuhlmann, supra note 1, at 21.
81
Imboden, supra note 78, at 3.
82
Joost Pauwelyn, The End of Differential Treatment for Developing Countries? Lessons from the Trade and
Climate Regimes, 22 REV. EUR. COMMUNITY & INTL ENVTL. L. 29, 29 (2013) (“In practice, huge differences
between countries have existed and will continue to exist, be it in terms of land mass, population, gross domestic
product (GDP), GDP per capita, military capacity, natural resources, industrial production, private or public wealth,
environmental conditions, history, culture, etc.”).
83
The United States, in particular, has challenged self-designation of developing country status in the WTO and is
also reassessing the parameters for trade preference programs. See Communication from the United States, An
Undifferentiated WTO: Self-Declared Development Status Risks Institutional Irrelevance, WTO Doc.
WT/GC/W/757 (Jan. 16, 2019); The White House, Memorandum on Reforming Developing-Country Status in the
World Trade Organization (July 26, 2019); Bacchus & Manak, supra note 46.
84
Developed countries have advocated for a differentiated approach based on economic, trade, and institutional
dimensions, while developing countries have pressed for a “human-centered” approach, consistent with the work of
Amartya Sen. See AMARTYA SEN, DEVELOPMENT AS FREEDOM (Random House 1999). For an insightful review of
the differentiation debate, see Bacchus & Manak, supra note 46. In the African context, some have also argued that
too many distinctions among countries could further splinter S&D. See Sommer & MacLeod, supra note 54.
85
For a summary of other development-focused aspects of RTAs, see Katrin Kuhlmann, Post-AGOA Trade and
Investment: Policy Recommendations for Deepening the U.S. Trade and Investment Relationship, Testimony before
the U.S. International Trade Commission (Jan. 28, 2016). See also NEW MKTS. LAB & HARV. L. & INTL DEV.
SOCY, supra note 17.
20
and their provisions, effect on domestic law, and implementation of rules will need to be better
incorporated into S&D from the outset.
86
To date, with some exceptions, S&D approaches have
been more reactive than proactive.
87
However, not only could S&D help encourage buy-in for an
agreement’s obligations,
88
it could be used to give countries a hand in shaping the rules that they
will ultimately have to implement.
C. S&D in the AfCFTA
The AfCFTA incorporates S&D in several ways, building upon traditional S&D to create
the space for a new, progressive, rules-based approach to S&D. The Principles underpinning the
AfCFTA (Article 5) explicitly refer to “flexibility and special and differential treatment,”
89
even
though “reciprocity” will be recognized,
90
and S&D is included in a number of the AfCFTA’s
provisions, as discussed below. While the S&D provisions in the AfCFTA are relatively
comprehensive, partner states likely will continue to grapple with challenges inherent in S&D,
such as weak administration (provisions are currently not automatic, which may leave out
countries with less legal and institutional capacity), lack of clarity, and insufficient tools for
monitoring and sharing best practices.
91
Responding to one challenge with traditional S&D, the AfCFTA clearly represents more
of a “differentiated” or “customized” S&D model.
92
It is clear from the way the provisions are
86
KUHLMANN, supra note 38.
87
See, e.g., Hoekman, supra note 54; HOEKMAN, supra note 71; KUHLMANN, supra note 86; Bacchus & Manak,
supra note 46.
88
Sommer & MacLeod, supra note 54.
89
AfCFTA, supra note 7, art. 5(d).
90
Id. art. 5(i).
91
AfCFTA, Protocol on Trade in Goods, Mar. 21, 2018, 58 I.L.M. 1028, 1043 [hereinafter Protocol on Trade in
Goods]; see also Sommer & MacLeod, supra note 54, at 8183.
92
See Keck and Low, supra note 45; see also Pauwelyn, supra note 82.
21
crafted that they are driven by Africa’s particular economic, geographic, and even legal
circumstances, with S&D provided based on need. For example, the AfCFTA’s Protocol on Trade
in Goods recognizes different levels of development among the state parties and the need to
provide flexibilities, special and differential treatment, and technical assistance to state parties with
special needs.
93
The Preamble to the Protocol on Trade in Services also acknowledges particular
needs of “least developed, land locked, island states, and vulnerable economies in view of their
special economic situation and their development, trade, and financial needs.”
94
Article 6 of the
Protocol on Trade in Goods also supports a more nuanced and differentiated approach:
In conformity with the objective of the AfCFTA in ensuring
comprehensive and mutually beneficial trade in goods, State Parties
shall, provide flexibilities to other State Parties at different levels of
economic development or that have individual specificities as
recognised by other State Parties. These flexibilities shall include,
among others, special consideration and an additional transition
period in the implementation of this Agreement, on a case by case
basis (emphasis added).
95
Article 7 of the Protocol on Trade in Services further advances this approach to S&D by
noting that state parties should take into account challenges faced by other state parties and “grant
flexibilities such as transitional periods, on a case by case basis, to accommodate special economic
situations and development, trade and financial needs of the state parties.”
96
These provisions go
beyond the usual distinctions, which have been based primarily on economic measurements, and
93
The Preamble to the Protocol on Trade in Goods, Article 6 of the Protocol on Trade in Goods states: “In
conformity with the objective of the AfCFTA in ensuring comprehensive and mutually beneficial trade in goods,
State Parties shall, provide flexibilities to other State Parties at different levels of economic development or that
have individual specificities as recognised by other State Parties. These flexibilities shall include, among others,
special consideration and an additional transition period in the implementation of this Agreement, on a case by case
basis,” Protocol on Trade in Goods, supra note 91, art. 6.
94
AfCFTA, Protocol on Trade in Services, Mar. 21, 2018, 58 I.L.M. 1028, 1053 [hereinafter Protocol on Trade in
Services].
95
Protocol on Trade in Goods, supra note 91, art. 6.
96
Protocol on Trade in Services, supra note 94, art. 7.
22
allow for “differentiated opportunities” and “targeted supports” based on other factors, such as
level of industrialization, size of the agricultural sector, resource endowments, proximity to ports,
and conflict status.
97
Article 7 of the Protocol on Trade in Services also incorporates the need for “special
consideration” in (progressive) services liberalization to “promote critical sectors of growth, social
and sustainable economic development” as well as “special consideration” for technical assistance
and capacity building.
98
The AfCFTA includes other provisions related to S&D, including the
provisions in Article 15 that allow the Council of Ministers to waive obligations based on
“exceptional circumstances.”
99
Additional S&D flexibilities also exist in both the Protocol on
Trade in Goods and Protocol on Trade in Services.
100
While the AfCFTA’s S&D provisions do
not create an absolute legal right to S&D, they do establish the legal basis for a “case-by-case”
application of S&D.
101
The AfCFTA is also based on the principle of “variable geometry” (also referenced in the
AfCFTA’s Principles),
102
which allows for issues and agreements to be “broken into parts” and
97
Sommer & MacLeod, supra note 54.
98
Protocol on Trade in Services, supra note 94, art. 7.
99
AfCFTA, supra note 7, art. 15.
100
In the Protocol on Trade in Goods, these include Article 11 (modification of tariff concessions), Article 17 (trade
remedies), Article 24 (infant industries), Articles 26 (general exceptions), Article 27 (security exceptions), and
Article 28 (balance of payments difficulties), with Article 29 covering technical assistance and capacity building.
Protocol on Trade in Goods, supra note 91. In the Protocol on Trade in Services, they include Article 14 (balance of
payment difficulties), Article 15 (general exceptions), Article 16 (security exceptions), Article 23 (modification of
schedules and concessions), and Article 27 (technical assistance and capacity building). Protocol on Trade in
Services, supra note 94; see also Sommer & MacLeod, supra note 54, at 80.
101
Sommer & MacLeod, supra note 54, at 78. James Bacchus and Inu Manak argue for a case-by-case approach to
S&D at the multilateral level. See Bacchus & Manak, supra note 46.
102
AfCFTA, supra note 7, art. 5(c).
23
approached in stages,
103
further customizing the agreement’s design and impact.
104
Variable
geometry is evident in the AfCFTA’s approach as an incremental trade agreement, and aspects of
variable geometry can be seen in some of the AfCFTA’s provisions.
Overall, the AfCFTA’s structure, incorporation of variable geometry,
105
more tailored and
differentiated approach, and focus on incremental rulemaking based on African law developed
through the RECs as building blocks,
106
appear to signal a normative shift in S&D away from a
“defensive” approach towards a more “affirmative” approach to S&D
107
that allows for use of
substantive law to advance development.
108
This unique formula for S&D and incremental legal
change should be leveraged to shape new rules as they are developed and as regional provisions
are integrated. Further, because the AfCFTA incorporates sustainable development into the
agreement text, as discussed above, this paves the way for a broader development-focused
approach to design and implementation of the rules.
Ultimately, however, while this form of development-led rulemaking represents a more
proactive, rules-based approach to S&D, it still has its limitations. First, policy space will continue
to be an issue. RECs, as is true of WTO rules, allow for flexibility in domestic regulation, within
limits. In the AfCFTA, the framework rules should incorporate good practices from across the
continent, and countries will need to maintain the flexibility to tailor rules and regulations to
103
Hoekman, supra note 54; see also Katrin Kuhlmann, Post-AGOA Trade and Investment: Policy
Recommendations for Deepening the U.S. Trade and Investment Relationship, Testimony before the U.S.
International Trade Commission, Washington, D.C., January 28, 2016.
104
This approach to trade agreements can also be referred to as a “building block approach,” which can be
customized and advanced incrementally. Kuhlmann, supra note 103, at 2.
105
See HOEKMAN, supra note 71.
106
AfCFTA, supra note 7, art. 5.
107
Traditional S&D represents a “defensive” approach rather than a “positive or offensive” approach focused on
development priorities. HOEKMAN, supra note 71, at 3.
108
For a discussion on reframing S&D to focus on economic law and regulation, see KUHLMANN, supra note 38.
24
particular circumstances at the national (and sometimes even sub-national) levels.
109
As the
AfCFTA advances, it will also be important to ensure that rules are developed in a balanced,
inclusive way and that nations with less developed legal systems and weaker bargaining power are
not left out. Regulatory capacity will also remain a challenge and is not easy to address through
trade agreements or S&D approaches,
110
so a better understanding of comparative law, diverse
regulatory good practices, and practical solutions will be needed.
Ultimately, generating development through trade could depend upon adopting legal
frameworks that will improve countries’ ability to diversify trade, compete in export markets, and
strengthen domestic economic systems to the benefit of small entrepreneurs and larger investors
alike.
111
While the AfCFTA is still in its early stages, it could deliver on some of these goals as it
reshapes future law on the continent, and perhaps beyond.
112
Section III will examine the range of
rules in priority negotiating areas (IP, investment, and competition law) that could form the basis
for a development-focused rules-based approach.
III. COMPARATIVE ASSESSMENT OF THE AFCFTA IN KEY ISSUE AREAS
With the next round of the AfCFTA focused on a set of substantive rules, the new
normative model for S&D discussed in the previous section is likely to result in development-
focused changes in law in several key areas, namely IPR, investment, competition law, and,
109
See, e.g., Hoekman, supra note 71.
110
KUHLMANN, supra note 38.
111
KUHLMANN, supra note 38.
112
It is also possible that African leaders will continue to press for more nuanced approaches at the multilateral
level, although this will likely vary by issue and perhaps even economic and geographic differences. Past proposals
have focused on changes in the rules on agriculture and other issues, highlighting the differences of countries that
are net importers rather than net exporters. See World Trade Organization, Declaration of the 2nd Meeting of the
African Ministers of Trade (AMOT) of 13 December 2016, WTO Doc. WT/L/1004 (2016). The AfCFTA could
become a stepping stone to “deep integration where African countries are prepared to test their ability to participate
in multilateral negotiations.” Regis Yann Simo, The African Continental Free Trade Agreement in a Decaying
Multilateral Trading System: Questioning the Relevance of the Enabling Clause 5 (Nov. 30, 2019) (presented at the
International Economic Law (IEL) Collective Inaugural Conference, University of Warwick, November 2019).
25
perhaps on a longer timeframe, other issues. This section will include a brief comparative analysis
of African national and regional law, international law, and other relevant practices and approaches
within these substantive areas to highlight how the AfCFTA may prompt change in regional and
broader international law. This is in line with the comparative approach in the AfCFTA, which
highlights the consideration of best practices in the RECs, state parties, and International
Conventions binding upon the African Union.
113
Practically, regional integration and some degree
of harmonization of existing regional rules will have to be considered, keeping in mind the acquis
principle, as will implementation gaps and the reality that changes in continental law will
ultimately depend upon national law and domestication of harmonized rules. New rules made
under the AfCFTA should also balance the agreement’s objectives on industrial, economic, and
agricultural development with a degree of regulatory autonomy for state parties, allowing for
flexibility and differentiated regulatory approaches while establishing a system of rules that can
attract investment to a historically fragmented market of fifty-five nations.
In assessing what the rules could take into account, it is important to consider what they
should take into account, given the AfCFTA’s focus on sustainable development. The AfCFTA
presents both the opportunityand the challengeof developing new rules in a way that advances
economic and social development and balances the priorities of a diverse (and large) group of
countries, incorporating good practices from both small and large economies. This is a departure
from many historical approaches, but it would set a refreshing new precedent. The AfCFTA text
supports this view, calling for “consensus” in rulemaking and highlighting the importance of
building upon “best practices” among RECs, state parties, and international conventions.
114
In
113
AfCFTA, supra note 7, art. 5.
114
AfCFTA, supra note 7, art, 5(k)(l).
26
doing so, the AfCFTA should reflect “best practices” of a range of state parties, including nations
with more developed legal systems and smaller nations whose systems may not be as developed.
Based on additional research, some smaller economies’ rules and regulations contain important
flexibilities for smaller producers and informal actors that will be important to achieving broader
development goals.
115
Priority should be placed on identifying and preserving legal practices that
give rights to more vulnerable groups, such as small businesses, informal economic actors, and
farming communities, as the AfCFTA evolves.
A. Intellectual Property Rights
One of the main issues for AfCFTA Phase II is IPR, which has been frequently highlighted
in the context of both S&D and trade and development due to its impact on developing economies
and their citizens.
116
There are many aspects of an IP regime that could be included in the AfCFTA,
ranging from a tailored continental approach on traditional IP issues (copyright, trademarks,
patents) to coverage of issues that have largely fallen outside of trade rules, such as protection for
genetic resources and traditional knowledge.
117
The impact of more concentrated efforts on IP
rules could be far reaching, contributing to achievement of a number of SDGs, such as SDG 1 (No
Poverty), SDG 2 (Zero Hunger), SDG 3 (Good Health and Well-Being), SDG 8 (Decent Work and
115
See Katrin Kuhlmann & Bhramar Dey, Using Regulatory Flexibility s to Bridge Market Informality: A Global
Study on Building Inclusive Seed Systems, available at
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3668668; see also, Kuhlmann and Dey, Regulatory Flexibilities
Bridge Gaps Between Seed Systems, AGRILINKS (June 25, 2020), https://www.agrilinks.org/post/regulatory-
flexibilities-bridge-gaps-between-seed-systems.
116
See Daniel Gervais, Intellectual Property, Trade & Development: The State of Play, 74 FORDHAM L. REV. 505
(2005).
117
See Donald Harris, TRIPS After Fifteen Years: Success or Failure, as Measured by Compulsory Licensing, 18 J.
INTELL. PROP. L. 367, 371 (2011).
27
Economic Growth), SDG 9 (Industry, Innovation, and Infrastructure), and SDG 15 (Life on Land),
among others.
118
IP rules vary among African nations and within regional bodies,
119
calling for a nuanced
approach to S&D that combines both traditional flexibility in implementing rules once they are set
and a proactive approach to designing the rules themselves. Regional IP rules have been developed
within the RECs to a degree, with substantive IP discussions slated under the TFTA.
120
Harmonized rules have also been advanced through other institutional bodies including the African
Regional Intellectual Property Organization (ARIPO),
121
Organisation Africaine de la Propriété
Intellectuelle (OAPI),
122
which notably establishes a unitary IP system among Civil Code
countries,
123
and the Pan-African Intellectual Property Organization (PAIPO),
124
making the
AfCFTA’s focus timely. African countries that are members of the WTO have also incorporated
provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS
118
See Yeukai Mupangavanhu, The Protection of Intellectual Property Rights Within the Continental Free Trade
Area in Africa: Is a Balance of Innovation and Trade Possible?, 15 INTL J. BUS. ECON. & L. 4, 16 (2018); see also
Katrin Kuhlmann, U.S. Trade and Investment with Sub-Saharan Africa: Recent Trends and New Developments,
Testimony before the United States International Trade Commission (July 30, 2019).
119
See Y. Mupangavanhu, African Union Rising to the Need for Continental IP Protection? The Establishment of
the Pan-African Intellectual Property Organization, 59 J. AFR. L. 1, 12 (2015).
120
“In view of the imminence of these negotiations, however, it would be prudent to consolidate them [with
negotiations under the AfCFTA] to avoid duplication and proceed from a single undertaking approach.” United
Nations Econ. Comm’n for Afr., African Union, African Dev. Bank & United Nations Conference on Trade and
Dev., Assessing Regional Integration in Africa IX: Next Steps for the African Continental Free Trade Area 109
(2019).
121
Agreement on the Creation of the African Regional Intellectual Property Organization, Dec. 9, 1976,
https://www.wipo.int/edocs/lexdocs/treaties/en/ap001/trt_ap001_002en.pdf [hereinafter Lusaka Agreement].
122
Agreement Relating to the Creation of an African Intellectual Property Organization, Constituting a Revision of
the Agreement Relating to the Creation of an African and Malagasy Office of Industrial Property, Mar. 2, 1977,
https://www.wipo.int/edocs/lexdocs/treaties/en/oa002/trt_oa002.pdf [hereinafter Bangui Agreement].
123
See NEW MARKETS LAB, ECONOMIC IMPACT ASSESSMENT AND LEGAL REVIEW AND ANALYSIS OF THE EAST
AFRICAN COMMUNITY SEED AND FERTILIZER LEGISLATION (forthcoming 2020).
124
Statute of the Pan-African Intellectual Property Organization, Jan. 30, 2016, https://au.int/en/node/32549.
28
Agreement)
125
into domestic law and have used S&D under the TRIPS Agreement to differing
degrees.
126
One overarching issue that must be considered is how the AfCFTA partner states will
structure some form of continental IP law. A recent report by the United Nations Economic
Commission for Africa (UNECA), AU, African Development Bank, and the United Nations
Conference on Trade and Development (UNCTAD) notes three options, which reflect approaches
in current structures: (a) establishing regional cooperation in IP (e.g., the approach under the AU);
(b) creating a regional IP filing system (e.g., ARIPO’s regional trademark filing system, which
extends to its nineteen member states); and (c) developing one unified continental law or unifying
law on a regional basis (e.g., OAPI’s system).
127
A unified legal approach would be the most
challenging to achieve under the AfCFTA and would represent a departure from some existing
regional models, including ARIPO. While it could be beneficial to harmonize IP law, too rigid a
continental structure might leave less room for individual countries to regulate according to their
needs. The WTO TFA model, which contains differentiated and staggered commitments, could
also be instructive when considering the Protocol’s structure.
128
Africa’s existing law and broader proposals on IP
129
are illustrative of where the AfCFTA
might substantively press forward to reshape international law and re-balance the rights of different
125
TRIPS: Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, Marrakesh
Agreement Establishing the World Trade Organization, Annex 1C, 1869 U.N.T.S. 299, 33 I.L.M. 1197 (1994)
[hereinafter TRIPS Agreement].
126
See Gervais, supra note 116, at 533.
127
United Nations Econ. Comm’n for Afr. et al., supra note 120, at 107.
128
See SIGNE & VAN DER VEN, supra note 12, at 8.
129
While African nations have pressed for changes in IP law multilaterally, many of these proposals have failed to
gain sufficient traction in multilateral negotiations (which themselves have faced setbacks, including the stalled
Doha Development Round). See Council for Trade-Related Aspects of Intellectual Property Rights, Joint
Communication from the African Group: Taking Forward the Review of Article 27.3(b) of the TRIPS Agreement,
WTO Doc. IP/C/W/404 (June 26, 2003) [hereinafter Joint Communication].
29
stakeholders.
130
Based on legal trends in sub-Saharan Africa and other RTAs, the AfCFTA’s
Protocol on Intellectual Property Rights is likely to address the following issues:
131
1. Tailored Approach to Traditional IP Issues, which would include a number of forms of
IP, building upon international law but leveraging appropriate flexibilities to enable the
rules to work for the greater benefit as Africa’s markets develop.
132
For example, due to
the large informal sector in African economies, areas of IP that affect informal innovation
(and informal enterprises as they become more integrated in formal markets) could be
prioritized, such as trade secrets and confidential information.
133
The Protocol on
Intellectual Property Rights could also include a greater focus on other forms of IP
important to the continent’s development, such as a framework on geographic indications
(this could be done through a sui generis system or a system of certification and collection
marks),
134
that advances the AU’s Continental Strategy for Geographical Indications in
Africa 2018-2023.
135
It could also include a regional approach to IP exhaustion, which
could support regionally integrated markets.
136
2. Continental Approach on Plant Variety Protection (PVP), which balances the needs of
breeders with protection for traditional and farmers’ varieties in order to preserve
130
Efforts to include IP protection for access to medicines may be illustrative of how a change in law in this area
could be incorporated at the multilateral level. Bethel Uzoma Ihugba & Ikenna Stanley Onyesi, International
Intellectual Property Agreements as Agents of Sustainable Development of Developing Countries, 9 AFR. J. LEGAL
STUD. 1, 10 (2016).
131
See Doha Declaration, supra note 67; see also United Nations Econ. Comm’n for Afr. et al., supra note 120, at
103.
132
See, e.g., Ruth L. Okediji, Does Intellectual Property Need Human Rights?, 51 N.Y.U. J. INTL L. & POL. 1
(2018).
133
Mupangavanhu, supra note 118, at 18.
134
United Nations Econ. Comm’n for Afr. et al., supra note 120, at 129.
135
Afr. Union Dep’t Rural Econ. & Agric., Continental Strategy for Geographical Indications in Africa 2018–2023
(2019), https://au.int/sites/default/files/documents/36127-doc-au_gis_continental_strategy_enng_with-cover-1.pdf.
136
United Nations Econ. Comm’n for Afr. et al., supra note 120, at 129.
30
biodiversity and improve food security.
137
An approach in this area could incorporate
elements of international law, including the WTO TRIPS Agreement, International
Convention for the Protection of New Varieties of Plants (UPOV Convention),
138
and other
legal instruments discussed below, as well as African national law. It might also reference
relevant aspects of the OAU African Model Legislation for the Protection of the Rights of
Local Communities, Farmers, and Breeders, and for the Regulation of Access to Biological
Resources (OAU Model Law),
139
which, for example, recognizes communal intellectual
property rights based on customary law and traditional practices.
140
Flexibilities that
currently exist in African national law, such as provisions in some countries’ national laws
(Uganda and Burundi, for example) that provide for farmers’ rights alongside PVP, should
also be preserved.
141
3. Protection for Developing Countries’ Genetic Resources and Traditional Knowledge,
including through mandatory disclosure requirements, a strengthened system for patent
research, and traditional knowledge registries in order to recognize rightsholders of genetic
resources and traditional knowledge, prevent misappropriation by outside rightsholders,
137
See Bram De Jonge & Peter Munyi, A Differentiated Approach to Plant Variety Protection in Africa, 19 J.
WORLD INTELL. PROP. 28 (2016). While the WTO TRIPS Agreement contains a provision on sui generis protection
for plant varieties (TRIPS Agreement), traditional varieties and landraces are often not eligible for plant variety
protection, and local communities cannot hold rights in most countries. See NEW MARKETS LAB, LOCAL SEED
COLLECTION AND PROTECTION OF FARMER-DEVELOPED SEED VARIETIES: REGIONAL AND INTERNATIONAL
FRAMEWORKS (2018).
138
International Convention for the Protection of New Varieties of Plants, Dec. 2, 1961, 1861 U.N.T.S. 282 (revised
on 10 Nov. 10, 1972, Oct. 23, 1978, and Oct. 28, 1973).
139
Organization of African Unity, African Model Legislation for the Protection of the Rights of Communities,
Farmers, and Breeders, and Access to Biological Resources (2000).
140
Id. arts. 1, 17, 23.
141
These countries’ laws incorporate a farmer’s privilege flexibility that existed under UPOV 1978 but is not part of
UPOV 1991, although, based on UPOV 1991, it appears that this privilege could still be maintained if explicitly
established under national (and, by extension, regional or continental) law. See NEW MARKETS LAB, supra note 123.
31
and protect cultural rights and biodiversity.
142
A sui generis right to traditional knowledge,
as reflected in the OAU Model Law, could also be explored.
143
Rulemaking in this area
would address gaps in international law and reflect legal trends evident in some African
national and regional legal systems, as discussed below.
4. Incorporation of Measures on Public Health, including alignment with TRIPS Article
31 bis, which allows for flexible use of compulsory licenses to respond to public health
needs (this includes both use of compulsory licenses to produce generic medicines and
importation of generic pharmaceuticals by countries that do not have manufacturing
capability).
144
These measures could perhaps be expanded in light of the global COVID-
19 health crisis to include a broader range of medicines, vaccines, medical equipment, and
medical devices,
145
as well as better administration of available flexibilities.
5. A System for Effective Implementation and Enforcement that corresponds to national
and regional needs and capacities and incorporates S&D and targeted technical assistance.
Among these issues, protection for genetic resources and traditional knowledge is likely to
be highlighted as a priority in discussions on the AfCFTA Protocol on Intellectual Property Rights
and is the focus of the comparative discussion that follows.
146
The practice of “bioprospecting”
has received increasing scrutiny, particularly as research, development, and commercialization of
142
See Joint Communication, supra note 129.
143
Loretta Feris, Protecting Traditional Knowledge in Africa: Considering African Approaches, 4 AFR. HUM. RTS.
L.J. 242, 243 (2004).
144
TRIPS Agreement art. 31 bis; see also Harris, supra note 117, at 386.
145
See Jennifer A. Hillman, Six Proactive Steps in a Smart Trade Approach to Fight COVID-19, COUNCIL ON
FOREIGN REL. (Mar. 20, 2020), https://www.thinkglobalhealth.org/article/six-proactive-steps-smart-trade-approach-
fighting-covid-19.
146
Traditional knowledge is a living body of knowledge passed on from generation to generation within a
community. See WORLD INTELL. PROP. ORG. (WIPO), KEY QUESTIONS ON PATENT DISCLOSURE REQUIREMENTS FOR
GENETIC RESOURCES AND TRADITIONAL KNOWLEDGE (2017),
https://www.wipo.int/edocs/pubdocs/en/wipo_pub_1047_19.pdf.
32
biotechnology-based products have increased,
147
with allegations of “biopiracy” in cases in which
indigenous knowledge is patented for profit.
148
Under existing law, indigenous communities are
often not allowed to reap the full economic benefits of their traditional knowledge and practices.
149
While trade rules on traditional knowledge and genetic resources have been proposed at
the multilateral level, including through African proposals to the WTO that have highlighted the
importance of strengthening provisions for genetic resources and traditional knowledge in
international legal regimes and the TRIPS Agreement, these issues remain outside of the
multilateral system of rules.
150
Requests to address this gap have only intensified since the Doha
Round due to an increase in the use of genetic resources,
151
but they have not been successfully
operationalized. The AfCFTA is likely to become a platform for legal change in this area, building
upon domestic and international law both within and outside of the international trade space.
In the area of genetic resources and indigenous rights, related treaties (namely the
Convention on Biological Diversity,
152
Nagoya Protocol on Access to Genetic Resources and the
Fair and Equitable Sharing of Benefits arising from their Utilization to the Convention on
Biological Diversity (Nagoya Protocol),
153
and International Treaty on Plant Genetic Resources
for Food and Agriculture (ITPGRFA))
154
would provide a foundation for trade law and platform
147
See Grant E. Isaac & William A. Kerr, Bioprospecting or Biopiracy?: Intellectual Property and Traditional
Knowledge in Biotechnology Innovation, 7 J. INTELL. PROP. 35 (2004).
148
See, e.g., Kasim Musa Waziri & Awomolo O Folasade, Protection of Traditional Knowledge in Nigeria:
Breaking the Barriers, 29 J. OF L. POLY & GLOBALIZATION 176 (2014).
149
Id.
150
Doha Declaration, supra note 67, ¶ 19.
151
See ISAAC RUTENBERG, MARISELLA OUMA & PETER MUNYI, INTELLECTUAL PROPERTY IN KENYA (2019).
152
Convention on Biological Diversity, June 5, 1992, 1760 U.N.T.S. 79.
153
Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from
their Utilization to the Convention on Biological Diversity to the Convention on Biological Diversity, Oct. 29, 2010,
UNEP/CBD/COP/DEC/X/1.
154
International Treaty on Plant Genetic Resources for Food and Agriculture, Nov. 3, 2001, 2400 U.N.T.S. 303.
33
for consultation in developing more robust legal protection. The AfCFTA could address the gap
on trade rules to protect genetic resources and indigenous communities by integrating relevant
protections into the Protocol on Intellectual Property Rights, including through provisions such as
mandatory disclosure requirements, traditional knowledge registries, and a clear system for patent
research when indigenous knowledge and communities are involved. The AfCFTA is likely to go
beyond existing law in some cases, such as disclosure requirements for patent examination,
perhaps extending the TRIPS disclosure requirement to genetic resources and traditional
knowledge. If incorporated into the AfCFTA, an expanded disclosure requirement for traditional
knowledge would also need to be assimilated into national law and implemented in order to ensure
that traditional knowledge and genetic resources are protected. The AfCFTA could also define
affirmative IP rights for traditional knowledge and genetic resources, enhancing international law
in this area.
1. Relevant Aspects of African Regional IP Law
Existing African regional law provides insight into the direction that the AfCFTA Protocol
on Intellectual Property Rights might take. For example, the ARIPO Swakopmund Protocol
provides the foundation for ARIPO member states to enact laws for the protection of traditional
knowledge and traditional cultural expressions. It also ensures the protection of traditional
knowledge and cultural expressions based on access and benefit sharing.
155
The ARIPO Harare
Protocol on Patents and Industrial Designs requires a clear and complete disclosure of an invention,
155
Swakopmund Protocol on the Protection of Traditional Knowledge and Expressions of Folklore Within the
Framework of the African Regional Intellectual Property Organization, § 9, Aug. 9, 2010.
34
in terms that can be understood, before it can be carried out,
156
and similar disclosure requirements
could be applied to traditional knowledge and genetic resources.
Relevant measures exist at the REC level as well, although a number of these are in the
form of policies that do not have the same binding effect as regional law. COMESA has put in
place a Policy on Intellectual Property Rights and Cultural Industries and is developing guidelines
for national IP policies in this area.
157
The EAC has an IP policy on health-related flexibilities,
which is particularly noteworthy given the current global health situation.
158
SADC has also been
working on a regional IP framework, building on the 2017 Protocol for the Protection of New
Varieties of Plants (Plant Breeders’ Rights) in SADC.
159
2. Traditional Knowledge and Genetic Resources in African National IP Law
Several African nations include protection for traditional knowledge and genetic resources
in their IP regimes, which could indicate how the AfCFTA’s provisions may evolve in this area.
The Constitution of Kenya recognizes the role of science and indigenous technologies in the
country’s development,
160
and requires that the Kenyan state ensure sustainable exploitation,
management, and conservation of genetic resources and the environment; ensure equitable benefit
sharing, protection, and enhancement of biodiversity and IP in indigenous knowledge; and ensure
that environmental and natural resources benefit the people of Kenya.
161
Kenya’s Traditional
Knowledge Act of 2016 provides for the protection of traditional knowledge “that is generated,
156
Protocol on Patents and Industrial Designs Within the Framework of the African Regional Intellectual Property
Organization (ARIPO), § 3(10), Dec. 10, 1982 [hereinafter Harare Protocol on Patents and Industrial Designs].
157
See COMESA, COMESA POLICY ON INTELLECTUAL PROPERTY RIGHTS, http://www.ip-watch.org/weblog/wp-
content/uploads/2013/05/Comesa-IP-policy-May-2013.pdf (last visited Aug. 3, 2020).
158
See EAC SECRETARIAT, EAC REGIONAL INTELLECTUAL PROPERTY POLICY ON THE UTILISATION OF PUBLIC
HEALTH-RELATED WTO-TRIPS FLEXIBILITIES AND THE APPROXIMATION OF NATIONAL INTELLECTUAL PROPERTY
LEGISLATION (Feb. 2013), https://ipaccessmeds.southcentre.int/wp-content/uploads/2019/12/EACTRIPSPolicy.pdf.
159
United Nations Econ. Comm’n for Afr. et al., supra note 120, at 109.
160
CONSTITUTION art. 11(2) (2010) (Kenya).
161
Id. art. 69(1).
35
preserved and transmitted from one generation to another but within a community for economic,
ritual, narrative, or recreational purposes individually or collectively.”
162
Rights are granted to
holders of traditional knowledge to authorize exploitation of their traditional knowledge and to
prevent exploitation and use without consent.
163
Kenya’s 2016 Act provides for the development
of a registry of rights holders and their traditional knowledge to protect the rights of local
communities in case of a violation;
164
this could be a practice that is spread continent-wide through
the AfCFTA.
165
South Africa’s 2013 Intellectual Property Law also provides some protection for traditional
knowledge.
166
The 2013 amendment to the law (Amendment Act No. 28 of 2013) incorporated the
recognition of certain traditional and indigenous terms or expressions; however, there is no duty
to disclose relevant information to the South African Patent Office.
167
Other African nations, including Ethiopia, Djibouti, Tanzania, and Zambia, also include a
level of protection for traditional knowledge and genetic resources in their legal systems.
168
For
example, Ethiopia’s rules provide for access and benefit sharing of traditional knowledge and
162
The Protection of Traditional Knowledge and Cultural Expressions Act, No. 33, Part 2.6 (2016) KENYA
GAZETTE SUPPLEMENT No. 154.
163
Id. at 25.
164
Id. at 8.
165
The Kenya Industrial Property Institute (KIPI) also established a “Traditional Knowledge (TK) and Genetic
Resources (GR) Unit” within the patent division to address issues of intellectual property rights relating to
traditional knowledge associated with genetic resources (including access and benefit sharing and disclosure
requirements) for indigenous and local communities. Id. § 10.
166
See Intellectual Property Laws Amendment Act 28 of 2013 (S. Afr.).
167
See id.
168
Proclamation No. 482/2006 Access to Genetic Resources and Community Knowledge, and Community Rights
Proclamation (2006), FEDERAL NEGARIT GAZETA (Ethiopia); Law No. 50/AN/09/6th on the Protection of Industrial
Property (Djibouti); Traditional and Alternative Medicine Act, No. 23 (2002) (Tanzania); The Protection of
Traditional Knowledge, Genetic Resources and Expressions of Folklore Act, No. 16 (2016) (Zam.).
36
genetic resources,
169
as does Zambia’s law,
170
which extends to folklore as well. Djibouti’s law on
industrial property includes a disclosure requirement for inventions obtained from traditional
knowledge and genetic resources.
171
3. Provisions on Traditional Knowledge and Genetic Resources in Other RTAs
Other RTAs are beginning to incorporate similar issues, although law is not well developed
in this area, as noted above. For example, Article 18.16 of the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership (CPTPP) provides for the recognition of traditional
knowledge, quality patent examination for traditional knowledge, and cooperation by all parties
through their local agencies to enhance their understanding of traditional knowledge in relation to
genetic resources.
172
In the Andean region, Bolivia, Colombia, Ecuador, Peru, and Venezuela has
established protection for genetic resources and preservation of indigenous communities’ right to
determine how traditional knowledge will be used, including through disclosure requirements.
173
As this section highlights, the AfCFTA could be a driver for development-focused IP rules,
particularly in areas like traditional knowledge and genetic resources where current trade law falls
short. S&D flexibilities will continue to be important, particularly as countries develop law in new
areas, but it will be equally important that African nations and their stakeholders use the
rulemaking process to advance their rights, consistent with the AfCFTA’s approach to S&D.
169
Proclamation No. 482/2006 Access to Genetic Resources and Community Knowledge, and Community Rights
Proclamation (2006) at 3.18, FEDERAL NEGARIT GAZETA (Ethiopia).
170
The Protection of Traditional Knowledge, Genetic Resources and Expressions of Folklore Act, No. 16 (2016) at
3.20 (Zam§§
171
Law No. 50/AN/09/6th on the Protection of Industrial Property at art. 34 (Djibouti).
172
Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) art. 18.16, Mar. 8, 2018.
173
Andean Community, Decision No. 391 Establishing the Common Regime on Access to Genetic Resources ¶ 7,
Jul. 2, 1996, http://www.sice.oas.org/trade/JUNAC/decisiones/DEC391e.asp.
37
B. Investment Law
International investment law is also undergoing significant reform and, once again, the
AfCFTA could provide a legal basis to rewrite the rules in a way that better integrates the interests
of African nations, companies of all sizes, and communities. Investment rules relate to a number
of SDGs, including SDG 1 (No Poverty), 2 (Zero Hunger), SDG 3 (Good Health and Well Being),
SDG 8 (Decent Work and Economic Growth), 9 (Industry, Innovation and Infrastructure), and
SDG 13 (Climate Action), and others, which have a clear link with investment, although all of the
SDGs are relevant in the investment context.
174
While the AfCFTA’s Protocol on Investment is likely to cover only intra-African
investment, the overall investment policy landscape is insightful. Currently, the investment policy
landscape within Africa is fragmented and, in some cases shifting (such as South Africa’s recent
changes to its investment regime, discussed below). There are currently 854 bilateral investment
treaties (BITs) (514 in force), of which 169 are intra-African (forty-four in force).
175
While investment is regarded as critical to Africa’s growth,
176
investment agreements,
including the BITs, have recently been subject to criticism and targeted reform.
177
Several of the
overarching criticisms of investment regimes in general center around their failure to consider
Africa’s unique circumstances;
178
their lack of ability to preserve policy or regulatory space and
174
Kuhlmann, supra note 118, at 4.
175
United Nations Econ. Comm’n for Afr. et al., supra note 120, at 215.
176
See Albert H. De Wet & Renee Van Eyden, Capital Mobility in Sub-Saharan Africa: A Panel Data Approach,
73 S. AFR. J. ECON. 22 (2005).
177
See Nicolette Butler & Surya Subedi, The Future of International Investment Regulation: Towards a World
Investment Organization, 64 NETHERLANDS INTL L. REV. 43 (2017).
178
See Talkmore Chidede, The Right to Regulate in Africa’s International Investment Regime, 20 OR. R. INTL L.
437, 461 (2019).
38
the host state’s right to regulate;
179
rules and procedures that favor foreign investors over domestic
stakeholders;
180
inconsistency in arbitral jurisprudence under investor-state dispute settlement
(ISDS);
181
lack of transparency in the selection of independent arbitrators and application of due
process;
182
and failure to focus on areas that are central to development, such as infrastructure and
downstream activities.
183
Within Africa, national and regional initiatives, discussed below, have addressed some of
these issues. At the same time, global reform efforts are also underway. UNCTAD Investment
Policy Framework for Sustainable Development calls for a number of reforms, including, for
example, legal reform and investment in key SDG-related sectors, including basic infrastructure,
food security, climate change mitigation and adaptation, and health and education.
184
ISDS has been a particular area of focus for reforms,
185
as has the movement away from
fair and equitable treatment to a “right to regulate” model, as evidenced by recent changes to the
SADC Protocol on Finance and Investment and more broadly.
186
As this section will highlight, the
AfCFTA is likely to incorporate elements of national legal reforms (such as South Africa’s 2015
Protection of Investment Act
187
and abrogation of BITs), regional investment approaches, and pan-
179
African nations have been “rule takers” in investment treaties; while developed nations have entered into
investment treaties to protect investors, African nations have entered into these agreements to attract investment,
which have lacked “substantial provisions on the host state’s right to regulate.” Id. at 467.
180
See Simon Lester, Reforming the International Investment Law System, 30 MD. J. INTL L. 70 (2015).
181
Butler & Subedi, supra note 177, at 44.
182
Emily Osmanski, Investor-State Dispute Settlement: Is there a Better Alternative?, BROOK. J. INTL L. 639, 658
(2018).
183
See Alec R. Johnson, Rethinking Bilateral Investment Treaties In Sub-Saharan Africa, 59 EMORY L.J. 919, 921
(2010).
184
United Nations Conference on Trade and Development, Investment Policy Framework for Sustainable
Development, 123, U.N. Doc. UNCTAD/DIAE/PCB/2015/5 (2015).
185
Osmanski, supra note 182.
186
South African Development Community Protocol on Finance and Investment art. 14, Aug. 18, 2006(hereinafter
SADC Protocol on Finance and Investment); Chidede, supra note 178, at 452.
187
South Africa Protection of Investment, Act 22 of 2015 (S. Afr.).
39
African developments. With respect to the latter, the draft Pan African Investment Code (PAIC)
is emerging as a “unique legal instrument” due to its “Africa-specific” and development-led
model,
188
which could clearly establish important guidance for the AfCFTA’s Investment Protocol.
However, a decision was reached at the 2017 AfCFTA Negotiating Forum not to annex the PAIC
to the AfCFTA at this stage since it is not yet a binding agreement.
189
Based on legal trends in sub-Saharan Africa and other RTAs, the AfCFTA Protocol on
Investment is likely to address the following issues:
1. Tailored Dispute Resolution: ISDS may not be included in the AfCFTA and could be
replaced with state-to-state dispute resolution, which would be consistent with changes to
African regional and national law (for example, the SADC Protocol on Finance and
Investment and South Africa’s revised Investment Act discussed below). This would
represent a departure from exhaustion of local remedies before parties can proceed to
arbitration,
190
as it removes the right of an investor to bring claims against host states in
international tribunals.
191
It is also likely that alternative dispute resolution will be
integrated into the AfCFTA, as reflected in the PAIC and SADC Model BIT, perhaps with
a sharing of costs between the investor and the host state.
192
These approaches to dispute
188
Makane Moïse Mbengue & Stefanie Schacherer, The ‘Africanization’ of International Investment Law: The Pan-
African Investment Code and the Reform of the International Investment Regime, 18 J. WORLD INV. & TRADE 3,
414, 415 (2017).
189
United Nations Econ. Comm’n for Afr. et al., supra note 120, at 215.
190
See Martin Dietrich Brauch, Exhaustion of Local Remedies in International Investment Law (2017),
https://www.iisd.org/library/iisd-best-practices-series-exhaustion-local-remedies-international-investment-law.
191
U.N. CONFERENCE ON TRADE AND DEVELOPMENT, WORLD INVESTMENT REPORT 2017, at 110, U.N. Sales No.
E.17.II.D.3 (2017).
192
Jack J. Coe Jr., Settlement of Investor-State Disputes through MediationPreliminary Remarks on Processes,
Problems and Prospects, in ENFORCEMENT OF ARBITRAL AWARDS AGAINST SOVEREIGNS 74 (R. Doak Bishop ed.,
2009).
40
resolution and ISDS would also align with recent changes in other RTAs, as discussed
below.
2. Safeguarding the Right to Regulate: As recent changes in African regional law, such as
the SADC Protocol on Finance and Investment, highlight,
193
the right to regulate is likely
to be an issue in the AfCFTA Investment Protocol. While some African regional rules
include FET,
194
the right to regulate is gaining ground as a way to balance the rights of
foreign investors with the rights and needs of domestic stakeholders, including investors.
A related possible approach would be to include standard protection coupled with
exceptions that act as safeguards for the host state.
3. Establishment of an African Investment Institution: This proposal has been floated by
a number of institutions and could take a variety of forms, including even an African
Investment Court.
195
If an African Investment Court is established (UNCTAD’s 2015
“Investment Policy Framework for Sustainable Development” envisions replacing ad hoc
arbitral tribunals with a standing court with appointed or elected judges and an appeals
chamber), this would involve various legal considerations, such as the competence of the
court and consensus from states for its establishment.
196
4. Inclusion of Sustainable Development Provisions: Sustainable development provisions
could be included in the AfCFTA Protocol on Investment, which would be consistent with
the AfCFTA’s reference to sustainable development. In addition, given recent changes in
193
SADC Protocol on Finance and Investment, supra note 186, art. 6; see also Tinashe Kondo, A Comparison With
Analysis of the SADC FIP Before and After Its Amendment, 20 POTCHEFSTROOM ELEC. L.J. (2017).
194
For example, COMESA’s Investment Agreement maintains FET. Investment Agreement for the COMESA
Common Investment Area art. 14, May 23, 2007.
195
U.N. Conference on Trade and Development, Investment Policy Framework for Sustainable Development, 108,
U.N. Doc. UNCTAD/DIAE/PCB/2015/5 (2015).
196
See Bernasconi, N., “Rethinking Investment-Related Dispute Settlement,” International Institute for Sustainable
Development, 6 INV. TREATY NEWS 2 (May 2015).
41
African national law, such as South Africa’s move to abrogate its BITs and amend its
investment regime, as discussed below, BIT reform is likely to connect with the AfCFTA
discussions to a degree. Sustainable development may also be part of broader BIT reform
(the SADC Model Bilateral Investment Treaty Template, discussed below, makes this
link), and as BITs are reformed, transition and survival clauses could help ensure a smooth
shift to new provisions as old treaties are replaced.
5. Enactment of Special Provisions Extending Investment Protection to Small and
Medium-Sized Enterprises (SMEs): Integrating SME-focused provisions into the
AfCFTA’s Protocol on Investment would be in keeping with the agreement’s overall
development focus, and provisions could be designed to engage a broader range of
stakeholders.
In particular, the removal of ISDS and focus on the “right to regulate” will likely be important
issues for the AfCFTA, as discussions in the context of the PAIC,
197
the SADC Protocol on Finance
and Investment,
198
and individual country experiences highlight.
1. Pan-African Investment Code
AfCFTA officials have emphasized the influential role the PAIC will have in drafting the
AfCFTA’s Protocol on Investment,
199
although it has not been formally linked to the AfCFTA as
noted above. The PAIC text, which was finalized in late 2015 but is not yet in force, resulted from
efforts to focus on trade and investment for economic growth and sustainable development in
197
Mbengue & Schacherer, supra note 188, at 442.
198
SADC Protocol on Finance and Investment, supra note 186, art. 14; see also Tinashe Kondo, supra note 193.
199
INTERNATIONAL INSTITUTE FOR SUSTAINABLE DEVELOPMENT, SHIFTING INTERNATIONAL INVESTMENT LAW
TOWARD SUSTAINABLE DEVELOPMENT: STRATEGIES FOR RENEGOTIATION, REFORM AND DEFENCE 8 (2019),
https://www.iisd.org/events/12th-annual-forum-developing-country-investment-negotiators..
42
Africa,
200
and contains substantial changes in investment rules seen as important to Africa,
including incorporation of the right to regulate.
201
The PAIC provides for the introduction of
investment incentives and incorporates MFN and national treatment, with exceptions based on the
specific needs of member states,
202
reflecting the differentiated approach discussed in Section II.
The PAIC also provides for state-to-state dispute resolution through consultations,
negotiations, or mediation and, if all else fails, recourse to the African Court of Justice for a final
and binding decision.
203
States may still apply ISDS based on a governing agreement; however,
disputes should first go through some form of alternative dispute resolution (this may include
negotiation, consultation, and/or non-binding third party mediation or other mechanisms), with
arbitration as a last resort. Arbitration will be governed by the United Nations Commission on
International Trade Law (UNCITRAL) rules and is subject to the exhaustion of local remedies.
204
2. African Regional Investment Law
There is also a body of African regional law on investment, which likely will be integrated
into the AfCFTA Protocol on Investment based on AfCFTA Article 19, with national
domestication and implementation to follow over time. Among the regional investment regimes,
the SADC Protocol on Finance and Investment (SADC Protocol) would perhaps prompt the most
significant changes.
205
The SADC Protocol reflects common MFN and national treatment
200
African Union Comm’n, Econ. Aff. Dep’t, Draft Pan-African Investment Code (Dec. 2016),
https://au.int/sites/default/files/documents/32844-doc-draft_pan-african_investment_code_december_2016_en.pdf
[hereinafter Pan-African Investment Code].
201
Mbengue & Schacherer, supra note 188, at 439.
202
Including preferential treatment in market schemes to encourage specific investors; financial incentives in the
form of grants, loans and insurance at lower rates; and fiscal incentives, such as tax holidays and reduced tax rates.
Pan-African Investment Code, supra note 200, arts. 68, 10.
203
Pan-African Investment Code, supra note 200, art. 41.
204
Pan-African Investment Code, supra note 200, art. 41.
205
SADC Protocol on Finance and Investment, supra note 186.
43
protections
206
and prohibits expropriation or nationalization except for public purposes, following
due process of law and “subject to the payment of prompt, adequate, and effective
compensation.”
207
The SADC Protocol also incorporates S&D through preferential treatment for
LDCs in the form of non-reciprocity and cooperation and capacity building programs.
208
Perhaps one of the most notable features of the SADC Protocol is that it no longer includes
a provision on Fair and Equitable Treatment (FET), since SADC member states voted to delete
that aspect of the Protocol in August 2016.
209
This change reflects an expanded right to regulate
that affords greater policy space to SADC member states.
210
Generally, the right to regulate is not
absolute and can be limited under investment agreements.
211
Investment tribunals have interpreted
standard FET clauses to encompass a broad scope of states’ obligations in publicly sensitive areas
like renewable energy, waste management, public health issues, and access to water.
212
The SADC
Protocol is clear in its right to regulate and also sets limits on foreign investment in sensitive
sectors, which include restriction on foreign ownership in the extractives sector (such as mining
and oil and gas), transport and telecommunications, banking and insurance, and media.
213
In 2012, SADC also finalized a non-binding Model Bilateral Investment Treaty Template
to be used as guidance for SADC member state governments with regard to future investment
206
SADC Protocol on Finance and Investment, supra note 186, art. 6.
207
SADC Protocol on Finance and Investment, supra note 186, art. 5.
208
SADC Protocol on Finance and Investment, supra note 186, art. 20.
209
SADC Protocol on Finance and Investment, supra note 186, art. 20.
210
SADC Protocol on Finance and Investment, supra note 186, art. 14..
211
See YULIA LEVASHOVA, THE RIGHT OF STATES TO REGULATE IN INTERNATIONAL INVESTMENT LAW: THE
SEARCH FOR BALANCE BETWEEN PUBLIC INTEREST AND FAIR AND EQUITABLE TREATMENT 1, 4 (Kluwer Law
International, 2019).
212
See id. at 2.
213
SADC Protocol on Finance and Investment, supra note 186, art. 1.
44
treaty negotiations.
214
The Template explicitly recognizes the link between FDI and sustainable
development. The drafting committee of the SADC Model BIT opted out of including an ISDS
section, noting the trend among states and UNCTAD’s recommendations in this area.
215
The
SADC Model BIT recommends state-to-state dispute settlement, with preference given to
alternative dispute settlement mechanisms other than arbitration, including mediation through
recognized institutions (arbitration may be sought if a dispute cannot be settled if within a
prescribed (three-year) time period).
216
In addition, the SADC Model BIT Template promotes
exhaustion of local remedies, and an investor must demonstrate to a tribunal that there are no other
legal measures available to resolve the underlying claim.
217
COMESA also has an Investment Agreement, which recognizes the role of trade and
investment in sustainable growth and development. In contrast to the SADC Protocol, though, the
COMESA Investment Agreement does contain FET provisions.
218
COMESA’s Investment
Agreement also includes S&D, recognizing that member states are at different stages of
development and providing flexibility based on differing situations.
219
COMESA member states
are also required to afford national treatment,
220
with exceptions, to be assessed on a case-by-case
basis including the possible effect on third parties and local communities.
214
The SADC Model BIT Agreement was developed in July 2012 by representatives from Malawi, Mauritius,
Namibia, South Africa, and Zimbabwe. Southern African Development Community (SADC), Model Bilateral
Investment Treaty Template With Commentary, at 3, (2012).
215
U.N. Conference on Trade and Development, UNCTADs Reform Package for the International Investment
Regime, 47 (2018).
216
South African Development Community (SADC), Model Bilateral Investment Treaty Template with
Commentary, art. 28 (2012).
217
Id. art. 29.
218
Investment Agreement for the COMESA Common Investment Area, supra note 194.
219
Id. art. 14.3.
220
Id. art. 17.
45
3. South Africa’s Investment Law
In 2015, South Africa passed a new investment law, the South African Protection of
Investment Act (2015 Investment Act), which substantially overhauled the country’s investment
regime and which highlights sustainable development and economic growth.
221
Perhaps the most
significant change in South Africa’s 2015 Investment Act was the removal of ISDS, which
stemmed from a challenge by Italian investors to the country’s Black Economic Empowerment
(BEE) Act,
222
and the South African’s government’s assessment that the ISDS mechanism
protected economic interests of investors while ignoring essential domestic needs.
223
The 2015
Investment Act calls for mediation and arbitration supported by the South African Department of
Trade and Industry as recourse in the case of investment disputes,
224
although investors can also
use alternative dispute settlement mechanisms available in the Republic of South Africa through a
competent court, independent tribunal, or statutory body.
225
The South African government may
also consent to international investment arbitration between South Africa and the investor’s home
state subject to the exhaustion of local remedies.
226
This shows a clear preference for domestic
remedies to solve disputes between investors and host states, consistent with the emerging trend.
227
221
South African Protection of Investment, Act 22, 2015 (S.Afr.).
222
Piero Foresti, Laura de Carli v. Rep. of S. Afr., ICSID Case No. ARB(AF)/07/1, Award of the Tribunal, 64
(Aug. 4, 2010), .
223
Mmiselo Freedom Qumba, South Africa’s Move Away from International Investor-State Dispute: a
Breakthrough or Bad Omen for Investment in the Developing World?, 52 DE JURE L.J. 358, 360 (2019).
224
Protection of Investment Act, supra note 187, § 13.
225
Id. at § 13(5).
226
Id. at § 13(4).
227
In 2018, Tanzania, a SADC member state, carried out reforms designed to reduce exposure to international
investment arbitration claims, including the elimination of “international arbitration” from Public-Private
Partnership (PPP) Agreements. Ibrahim Amir, A Wind of Change! Tanzania’s Attitude Towards Foreign Investors
and International Arbitration, (December 28, 2018), http://arbitrationblog.kluwerarbitration.com/2018/12/28/a-
wind-of-change-tanzanias-attitude-towards-foreign-investors-and-international-arbitration/. Under amendment to
Tanzania’s PPP law (Section 22, Tanzania’s Public-Private Partnership Law, as amended, Act No. 9), foreign parties
to PPP Agreements can only seek recourse under Tanzanian local law.
46
While an exhaustive assessment of other countries’ investment laws was beyond the scope of this
paper, other African countries’ laws do reflect a preference for domestic remedies and alternative
forms of dispute resolution as well.
228
4. Investment Reform in Other RTAs
The Comprehensive Economic Trade Agreement (CETA) between Canada and Europe is
the first RTA to remove the traditional ISDS provision and replace it with a two-tiered tribunal
system with appellate review for the settlement of disputes.
229
The permanent first instance
investment tribunal is authorized to hear investment matters, excluding those of a purely
contractual nature or fraudulent or abusive claims,
230
and the appellate tribunal may review issues
of law and fact based on the Convention on the Settlement of Investment Disputes between States
and Nationals of Other States (ICSID Convention), such as manifest excess of powers.
231
This
change also came about in the face of criticism on ISDS, causing Canada and the EU to negotiate
an updated form of the agreement and remove ISDS.
232
Notably, the CETA also contains
provisions for parties who may not have the financial resources to institute a dispute, particularly
SMEs, and for claims with de minimis damage levels (in such circumstances, a case may be heard
by a third country member upon agreement by the disputing parties, with respondents to such a
case required to give “sympathetic consideration” to the request).
233
CETA contains common
228
See, e.g., Law on Investment, Law No. 3/93, art. 25 (Mozam.); Investment Code, Law No. 3/2011, art. 19
(Guinea-Bissau); Investment Code, Law 1/24, art. 17 (Burundi).
229
Elsa Sardinha, Towards a New Horizon in InvestorState Dispute Settlement? Reflections on the Investment
Tribunal System in the Comprehensive Economic Trade Agreement (CETA), 54 CAN. Y.B. INTL L. 311, 365 (2016).
230
See Comprehensive Economic and Trade Agreement, Can.E.U., art. 29.2, Oct. 30, 2016, 2017 O.J. (L11) 23.
231
Convention on the Settlement of Investment Disputes between States and Nationals of Other States art. 52(1)(b),
Mar. 18, 1965, 17 U.S.T. 1270, 575 U.N.T.S. 159.
232
Sardinha, supra note 229, at 314.
233
Comprehensive Economic and Trade Agreement, Can.E.U., supra note 230, arts. 8.27(9), 8.23(5).
47
precondition for parties to undertake consultations before proceeding to arbitration;
234
mediation,
although not mandatory like consultations, is recognized as an alternative form of dispute
settlement enabling parties to shift from a costly arbitral process.
235
The investment provisions in the newly signed United States-Mexico-Canada Agreement
(USMCA) signal a significant change in the ISDS landscape for North America.
236
Canada has
completely withdrawn from ISDS under the new treaty, which is a notable departure from earlier
practice under the North American Free Trade Agreement (NAFTA),
237
and has consented to ISDS
only for legacy investment claims that will expire three years after NAFTA’s termination.
238
Investors will have to resort to local remedies and use Canadian courts to settle their investment
claims under the USMCA.
239
Disputes between the United States and Mexico are subject to limited
ISDS for a subset of industries (petrochemicals, telecommunications, infrastructure, and power
generation)
240
dependent upon provisions in the annexes,
241
and claims are restricted to an “Annex
Party” (only the United States and Mexico under Annex 14-D, for example).
242
The USMCA does
234
Id. art. 8.22(1)(b).
235
Id. art. 8.20(1).
236
Agreement between the United States of America, the United Mexican States, and Canada (USMCA) Ch.14,
Can.Mex.U.S., Dec. 13, 2019. [hereinafter USMCA].
237
Chapter 14 of the USMCA replaces Chapter 11 of the NAFTA. Under NAFTA Chapter 11, investment
provisions applied to “investors of another Party” and “investment of investors of another Party” are subject to carve
outs.
238
USMCA, supra note 236, at Annex 14-C ¶ 3.
239
USMCA, supra note 236, at 14.2(4).
240
Ana Swanson & Jim Tankersley, Trump Just Signed the U.S.M.C.A.: Here’s What’s in the New NAFTA, N.Y.
TIMES (Jan. 29, 2020), https://www.nytimes.com/2020/01/29/business/economy/usmca-deal.html.
241
Claims can only be brought under transition provisions contained in Annex 14-C (Legacy Investment Claims
and Pending Claims), Annex 14-D (Mexico-United States Investment Disputes), and Annex 14-E (MexicoUnited
States Investment Disputes Related to Covered Government Contracts).
242
Martin J. Valasek, Alison G. FitzGerald & Jenna Anne de Jong, Major changes for investor-state dispute
settlement in new United States-Mexico-Canada Agreement, NORTON ROSE FULBRIGHT (Oct. 2018),
https://www.nortonrosefulbright.com/en/knowledge/publications/91d41adf/major-changes-for-investor-state-
dispute-settlement-in-new-united-states-mexico-canada-agreement.
48
recognize FET as interpreted under customary international law,
243
consistent with the general
practice of states,
244
and also recognizes the parties’ inherent right to regulate, resolving to preserve
the flexibility of the parties to set legislative and regulatory priorities and protect legitimate public
welfare objectives, such as health, safety, and environmental protection.
245
It is likely that the AfCFTA Protocol on Investment will be shaped by both African regional
trends in investment law as well as international developments in investment rules. Tailored S&D
provisions should also be incorporated into the AfCFTA Protocol on Investment, although, once
again, African nations and stakeholders should use development of the AfCFTA Protocol on
Investment to address their needs through the rulemaking process. While international investment
law will likely continue to be heavily debated, the AfCFTA could be a vehicle for further change
and a model for future trade agreements.
C. Competition Law
Although competition law has not received the same degree of international focus that IP
and investment law have, it is becoming more prominent in bilateral and free trade agreements.
246
The Agreement establishing the AfCFTA states that the members will “cooperate on
competition,”
247
which is the third of the three substantive issues included for negotiation of
Protocols in Phase II negotiations. It is not clear yet whether AfCFTA partner states will adopt
binding commitments under the Protocol on Competition Policy or simply agree to cooperate on
243
USMCA, supra note 236, art. 14.6(2).
244
Id. at Annex 14-A.
245
Id. at Preamble. Art. 14.16 further states, “Nothing in this [Investment] Chapter shall be construed to prevent a
Party from adopting, maintaining or enforcing any measure otherwise consistent with this Chapter that it considers
appropriate to ensure that investment activity in its territory is undertaken in a manner sensitive to environmental,
health, safety, or other regulatory objectives.”
246
See FRANCOIS-CHARLES LEPREVOTE, SVE FRISCH & BURCU CAN, E15 INITIATIVE, COMPETITION POLICY WITHIN
THE CONTEXT OF FREE TRADE AGREEMENTS (International Centre for Trade and Sustainable Development & World
Economic Forum 2015).
247
AfCFTA, supra note 7, art. 4(c).
49
certain aspects of competition law and policy.
248
There is currently quite a bit of divergence in
African legal and regulatory systems related to competition, which will necessitate application of
both traditional S&D and proactive rules-based S&D. According to a recent report by UNECA,
the AU, the African Development Bank (AfDB), and UNCTAD, as of 2019, out of fifty-four AU
countries surveyed, twenty-three had both a competition law and authority, ten had a law but no
authority, and seventeen had no competition law at all (and another four had legislation under
development).
249
Competition law will become more important as markets grow and become more
integrated, enhancing access to markets, finance, and technology for firms that can take advantage
of economies of scale.
250
However, other businesses, including SMEs, may find it more difficult
to benefit from trade harmonization and liberalization.
251
In order to ensure positive gains for large
firms and SMEs alike, African experts have stressed that competition policies and consumer
protection rules will be needed to complement existing laws.
252
An increased focus on competition
law, particularly if inclusive, will also help African nations achieve a number of the SDGs, such
as SDG 1 (No Poverty) and SDG 8 (Decent Work and Economic Growth), among several others.
248
Trudi Hartzenberg, Cooperation on Competition in the AfCFTA, TRADE L. CTR. (May 17, 2019),
https://www.tralac.org/blog/article/14078-cooperation-on-competition-in-the-afcfta.html.
249
United Nations Econ. Comm’n for Afr. et al., supra note 120, at xv; see also SIGNE & VAN DER VEN, supra note
12; Developments in Competition Law in Africa, LEX AFRICA (Aug. 22, 2018),
https://www.lexafrica.com/2018/08/developments-in-competition-law-in-africa/.
250
See Robert D. Anderson, William E. Kovacic, Anna Caroline Müller & Nadezhda Sporysheva, Competition
Policy, Trade and the Global Economy: Existing WTO Elements, Commitments in Regional Trade Agreements,
Current Challenges and Issues for Reflection(World Trade Organization Economic Research and Statistics Division,
Staff Working Paper No. ERSD-2018-12,Oct. 31, 2018),
https://www.wto.org/english/res_e/reser_e/ersd201812_e.pdf.
251
Mesut Saygili, Ralf Peters & Christian Knebel, African Continental Free Trade Area: Challenges and
Opportunities of Tariff Reductions, 7 U.N. Doc. UNCTAD/SER.RP/2017/Rev.1 (Feb. 2018),
http://unctad.org/en/PublicationsLibrary/ser-rp-2017d15_en.pdf.
252
Id.
50
Some countries and regions, the EU in particular, have been pressing to integrate
competition policy into international trade law for a number of years. Some time ago, a multilateral
agreement on competition was proposed to address the gap between regulation of state-to-state
practices at the WTO level and private anti-competitive practices
253
through a common legal
approach (the latter practices would fall under national law).
254
In 1996, this proposal became part
of the package of “Singapore Issues” at the WTO Singapore Ministerial Conference, where a WTO
Working Group on the Interaction between Trade and Competition Policy (WGTCP) was
established.
255
The WGTCP was to ensure that development considerations were central to
evaluation of anti-competitive practices and any other areas that need to be addressed under the
WTO framework.
256
Competition law, covering a range of issues and incorporating S&D
provisions, was also part of the agenda at the 2001 WTO Ministerial Conference in Doha;
257
however, the issue was officially dropped from the work program of the Doha Round due to
objections from developing countries, due in part to lack of capacity to implement changes in
253
Aditya Bhattacharjea, The Case for a Multilateral Agreement on Competition Policy: A Developing Country
Perspective, 9 J. INTL ECON. L. 293, 295 (2006).
254
MARC LEE & CHARLES MORAND, COMPETITION POLICY IN THE WTO AND FTAA: A TROJAN HORSE FOR
INTERNATIONAL TRADE NEGOTIATIONS? 14 (2003).
255
World Trade Organization, Ministerial Declaration of 18 December 1996, WTO Doc. WT/MIN(96)/DEC, 36
I.L.M. 218 (1996) at ¶ 20 [hereinafter Singapore Declaration].
256
Id.
257
Paragraph 25 of the Doha Ministerial Declaration stated that the WGTCP “will focus on the clarification of: core
principles, including transparency, non-discrimination and procedural fairness, and provisions on hardcore cartels;
modalities for voluntary cooperation; and support for progressive reinforcement of competition institutions in
developing countries through capacity building. Full account shall be taken of the needs of developing and least-
developed country participants and appropriate flexibility provided to address them.” Doha Declaration, supra note
67; World Trade Organization Working Group on the Interaction between Trade and Competition Policy, Report on
the meeting of 12 July 2002, WT/WGTCP/M/18, ¶44 (2002) (revealing that certain proposals for competition
policy were dropped such as export cartel exemptions which would bring their attention to domestic authorities
however countries like the United States did not see the legal basis for taking action against anticompetitive
practices that do not have domestic effects). The antidumping provision that sought to shield competitors preventing
abuse that is present in antidumping cases were shut down in a WTO Appellate Body Report. Appellate Body
Report, United States Antidumping Act of 1916, ¶133, WTO Doc. WT/DS136/AB/R &WT/DS162/AB/R (adopted
Sept. 26, 2000) (stating that antidumping claims can only be brought under Article VI of GATT and the Anti-
Dumping Agreement.)
51
competition law, insufficient support from the United States,
258
and concerns with difficulties
countries could face harmonizing existing national regimes into a single standard.
259
The inclusion of competition in AfCFTA Phase II is notable, and based on legal trends in
sub-Saharan Africa and other RTAs, the AfCFTA’s Protocol on Competition Policy is likely to
address the following issues:
1. Tailored Approach to Key Competition Law Issues: These might include regulation of
cartels, merger control, abuse of dominance, and anti-competitive agreements, tailored to
Africa’s particular circumstances.
260
2. Incorporation of Consumer Protection Provisions: Consumer protection is reflected in
the rules of several African RECs (i.e., COMESA, EAC, and SADC) as well as recent
RTAs like the USMCA and CPTPP, as discussed below. Due to the unique focus of
competition law and consumer protection, consumer protection should be approached
separately from other competition issues, such as through a separate law.
261
In addition,
given the increasing importance of digital trade, consumer protection should also extend to
the digital space.
262
This should also be explicitly provided for in the AfCFTA Protocol on
Competition Policy and subsequent work on e-commerce in Phase III.
263
3. Coordination Among Competition Authorities: African competition authorities exist at
the national and regional levels, with exceptions as noted, and these authorities are
258
See, e.g., Bhattacharjea, supra note 253, at 294.
259
Gary Clyde Hufbauer & Jisun Kim, International Competition Policy and the WTO, PETERSON INST. INTL
ECON. L. (Apr. 11, 2008).
260
United Nations Econ. Comm’n for Afr. et al., supra note 120, at 259.
261
Id. at 168.
262
As a relevant benchmark, the CPTPP and USMCA contain consumer protection provisions for the digital
economy. CPTPP, supra note 172, art. 14.4; USMCA, supra note 236, art. 19.7.
263
See CENTER FOR INTERNATIONAL PRIVATE ENTERPRISE AND NEW MARKETS LAB, DIGITAL ECONOMY ENABLING
ENVIRONMENT GUIDE: KEY AREAS OF DIALOGUE FOR BUSINESS AND POLICYMAKERS (2018).
52
increasingly evaluating mergers and prohibited practices.
264
Some of Africa’s current
regional blocs, such as COMESA, ECOWAS, and CEMAC, have established regional
competition authorities, but institutional gaps persist at the regional and national levels.
Provisions in the USMCA and CPTPP that require the establishment of national
competition authorities and coordination in competition law matters could also provide a
reference point for closing the gap in national law while also establishing greater
coordination on competition law.
265
Similar to IPR, different approaches could be pursued,
including a pan-African competition institution (which may be difficult in the near term),
competition cooperation, and/or a pan-African institution following integration through
cooperation.
266
4. Provisions Tailored to SMEs: As is true with other measures, the Protocol on Competition
Policy should recognize special circumstances of SMEs and other entities, including the
informal sector. Provisions could include a de minimis standard that would exempt SMEs
from the enforcement of domestic anticompetition agencies, reducing the regulatory
burden on smaller businesses and focusing actions on larger companies that would be most
likely to dominate the market.
267
5. Focus on Key Sectors Such as Agriculture: Agriculture could be a particular focus given
the importance of the sector to food security and, as UNCTAD has noted, the challenges
264
BAKER MCKENZIE, AN OVERVIEW OF COMPETITION AND ANTI-TRUST REGULATIONS IN AFRICA (Aug. 2019).
265
USMCA, supra note 236, art. 21.1; CPTPP, supra note 172, art. 16.1.
266
United Nations Econ. Comm’n for Afr. et al., supra note 120, at 200.
267
Bhattacharjea, supra note 253, at 317.
53
posed by more dominant larger firms that are able to exercise their buying power to affect
prices and other market conditions.
268
6. Flexible Provisions for Enactment and Implementation of Competition Rules at the
National Level: Flexibility in competition rules would align with the differentiated
approach to S&D discussed in Section III and would give countries time to make changes
to national rules depending upon the status of their current legal regime. UNECA, the AU,
the AfDB, and UNCTAD have advocated for a five-year transition period,
269
although, as
experience with WTO disciplines has shown, legal changes and implementation of rules
can sometimes take a number of years, so a longer transition period could perhaps be
considered from the outset to reflect the amount of time it can take to put in place and
implement new laws.
270
7. Differentiation in S&D: In the area of competition law, countries are at noticeably
different stages, necessitating a differentiated approach to S&D in line with the AfCFTA’s
provisions as discussed in Section II.
271
A differentiated approach could enable countries
to meet obligations gradually as they build capacity,
272
and it would also allow for tailored
S&D regarding flexibility and capacity building support.
273
268
Shyam Khemani, Applications of Competition Law: Exemptions and Exceptions 2829, U.N. Doc.
UNCTAD/DITC/CLP/Misc.25 (United Nations Conference on Trade and Development 2002).
269
United Nations Econ. Comm’n for Afr. et al., supra note 120, at 78.
270
For example, the S&D transition periods under the WTO TRIPS Agreement have been extended, in some cases
several times, to account for a longer time period needed for implementation. See Gervais, supra note 116, at 509.
271
See, e.g., Global Forum on Competition, OECD CCNM/GF/COMP(2001)2/REV1 (Oct. 15, 2001),
https://www.oecd.org/competition/globalforum/GlobalForum-October2001.pdf.
272
See Hunter Nottage, Trade and Competition in the WTO: Pondering the Applicability of Special and Differential
Treatment, J. INTL ECON. L., Mar. 2003, at 2347.
273
For example, UNCTAD offers capacity building and technical assistance support on competition law and policy
based on the United Nations Set of Multilaterally Agreed Equitable Principles and Rules for the Control of
Restrictive Business Practices, adopted by General Assembly Resolution 35/63 of December 5, 1980. See U.N.
Conference on Trade and Development, Capacity Building and Technical Assistance on Competition Law and
Policy, United Nations, TD/B/C.I/CLP/43 (April 26, 2017) at 2.
54
8. Provisions on Remedies and Resolution of Disputes: These could be needed to both
address violators and provide redress to injured parties (including consumers). In order to
establish a system that is manageable given differences in national law and enforcement,
civil penalties may be preferable to criminal penalties.
274
9. Technical Assistance and Capacity Building to Bridge Gaps in Knowledge and
Resources: This will be required in order to allow countries to build systems for
competition law and participate in a regional or continental competition framework.
275
1. African Regional Competition Frameworks
Africa has a number of regional competition regulators, including authorities in WAEMU
and CEMAC, the East African Competition Authority (EACA), and the COMESA Competition
Commission.
276
Cooperation among these authorities is recognized through various Memoranda
of Understanding (MOUs).
277
Recently, the COMESA Competition Commission adopted new Guidelines on Market
Definition, Restrictive Business Practices and Abuse of Dominance aimed to provide clarity on
interpretation of the COMESA Competition Regulations and Rules of 2013 (2013 COMESA
Competition Regulations), as well as predictability for the COMESA Competition Commission.
The COMESA Competition Commission was initially concentrated on merger review and has
recently started investigation of restrictive practices.
278
It also provides training to national
competition authorities.
279
COMESA’s 2013 Competition Regulations prohibit cartels and any
274
United Nations Econ. Comm’n for Afr. et al., supra note 120, at 164.
275
Doha Declaration, supra note 67, at 5.
276
BAKER MCKENZIE, supra note 264, at 2.
277
Pieter Steyn, African Competition Law Developments in 2018 and the Outlook for 2019, LEX AFRICA, (Feb. 12,
2019).
278
Hartzenberg, supra note 248.
279
Id.
55
concerted practice that distort trade
280
or competition in the regional market.
281
The COMESA
Competition Regulations also prohibit the abuse of dominant position where an undertaking
“occupies such a position of economic strength as will enable it to operate in the market without
effective constraints from its competitors or potential competitors.”
282
The EAC enacted a regional Competition Act in 2006, which prohibits unfair business
practices, price fixing, and other anti-competitive behavior.
283
Violations of the EAC Competition
Act include the abuse of dominant position, exclusion of competitors from the market, and directly
or indirectly imposing unfairly high or low purchasing prices.
284
The Scope of the EAC
Competition Act also extends to mergers and acquisitions and includes a notification requirement
upon conclusion of a merger or acquisition,
285
which may not be permitted if it leads to a dominant
position in the market which would have the effect of lessening competition. The East African
Community Competition Authority (EACCA) is established under the EAC Competition Act and
has jurisdiction over competition matters, consumer welfare, state subsidies, and public
procurement, as well as, to an extent, merger reviews.
286
ECOWAS has had competition rules in place since 2008, and, in May 2019, the ECOWAS
Regional Competition Authority (ERCA) was established for their implementation.
287
ERCA
280
COMESA Treaty art. 55(1), Nov. 5, 1983, https://www.comesa.int/wp-content/uploads/2020/07/Comesa-
Treaty.pdf.
281
COMESA Treaty art. 55(1)(b); see also ELEANOR FOX AND MOR BAKHOUM, MAKING MARKETS WORK FOR
AFRICA: MARKETS, DEVELOPMENT, AND COMPETITION LAW IN SUB-SAHARAN AFRICA (2019).
282
Common Market for Eastern and Southern Africa (COMESA), Competition Regulations, art. 17(1)(a), (Nov. 20,
2012) https://www.comesacompetition.org/wp-content/uploads/2014/04/2012_Gazette_Vol_17_Annex_12-
COMESA-Competition-Regulations-as-at-December-2004.pdf.
283
The East African Community, East African Competition Act § 5, Nov. 13, 2006.
284
Id. ¶ 8.
285
Id. ¶ 11.
286
Id. ¶ 44.
287
Prince Ifeanyi Nwankwo, Mergers and Acquisitions under ECOWAS Competition Law, HARV. AFR. POLY J.,
(2019).
56
regulates mergers that have trade distorting effects and result in the abuse of dominant market
position,
288
protects consumer welfare, and promotes economic efficiency by prohibiting
anticompetitive behavior that affects trade among ECOWAS States.
289
SADC has also been developing a regional competition regime, which is slated for
adoption in 2020.
290
Once established, it would regulate unfair business practices and promote
competition, pursuant to the 2009 SADC Declaration on Regional Cooperation in Competition and
Consumer Policies.
These differing regional competition regimes do call into question how a mechanism for
harmonization could be designed, and a pan-African authority could take different forms as noted
above. This will likely be one of the areas of focus of the AfCFTA Protocol on Competition
Policy.
291
2. African National Competition Legislation
An exhaustive review of African competition law is not possible in this Article, but several
practices are worth noting. Kenya has a competition authority and quite comprehensive
Competition Act, for example, which forbids the use of restrictive trade practices and any other
competition distorting practices,
292
prevents agreements that could limit competition in Kenya
(including agreements to fix selling or purchase prices),
293
and protects against abuse of dominant
position in the Kenyan market (including abuse of intellectual property rights).
294
Notably,
288
Economic Community of West African States, Supplementary Act A/SA.1/06/08 Adopting Community
Competition Rules and The Modalities of Their Application Within Ecowas, Dec. 19, 2008, art. 7.
289
Id. art. 3.
290
Hartzenberg, supra note 248.
291
United Nations Econ. Comm’n for Afr. et al., supra note 120, at 200.
292
The Competition Act (Act No. 12/2010) (Kenya), Part III.
293
Id. ¶ 21.
294
Id.
57
consumer protection is also enshrined in Kenya’s Competition Act, provided that goods meet
relevant standards, such as product safety standards.
295
The laws of Botswana and Namibia are also notable. Botswana’s Competition Law, which
was enacted in 2009 and amended in 2018, includes provisions for price fixing, mergers, bid
rigging, decreased market competition, and abuse of dominant position,
296
and public interest
factors may be taken into consideration, such as the effect on the welfare of consumers, SMEs,
and employment.
297
Namibia’s Competition Law, which was enacted in 2003, prohibits distortive
agreements, except to the extent that they would benefit small firms or historically disadvantaged
groups.
298
3. Competition Provisions in Other RTAs
Competition provisions in other RTAs could also be instructive for the AfCFTA and
adapted to the unique circumstances of the African continent. The USMCA, for example, requires
that member states enact national legislation and establish national enforcement authorities to
encourage competition and prohibit anticompetitive behavior (each party is also required to enact
consumer protection laws to prohibit fraudulent and deceptive commercial activities), while also
calling for cooperation among parties and their competition law authorities in order to deliver
effective enforcement and collaboration in consumer protection policies.
299
The parties to the
295
Id. ¶ 55.
296
Competition Act (Act No. 17/2009) (Bots.).
297
Id. ¶ 52.
298
Competition Act (Act No.2/2003) (Namib.), Part 3.28(3)(b).
299
USMCA, supra note 236, art. 21. The USMCA also includes transparency provisions, and parties are required to
share information about national competition law enforcement policies and practices as well as exemptions and
immunities.
58
USMCA may request consultations to address any issues that arise in relation to competition law
and policy.
300
The CPTPP also includes a chapter on competition policy that requires parties to establish
competition authorities and enact national competition laws to prohibit anticompetitive business
behavior.
301
Like the USMCA, the CPTPP calls for cooperation among the parties’ competition
authorities to ensure effective enforcement
302
and emphasizes the importance of consumer
protection through national legislation addressing deceptive and fraudulent commercial practices
that cause, or threaten to cause, harm to consumers.
303
As the AfCFTA Protocol on Competition Policy is considered, traditional S&D approaches
will be necessary given the variation in rules and practices in this area and countries’ needs for
flexibilities in developing and implementing competition law regimes. However, a proactive,
rules-based approach to S&D will also be critical, and the AfCFTA Protocol on Competition
Policy could be a driving force for developing competition law to benefit African nations and
stakeholders. Good practices from the AfCFTA’s partner states, including those in countries like
Botswana and Namibia referenced above, should be catalogued and incorporated. Because the
AfCFTA has prioritized this area of law, it is possible that the AfCFTA will not only drive change
in competition law within Africa, but it might help put this issue back on the international agenda,
perhaps in a more development-centered way, as well.
300
USMCA, supra note 236, art. 21.6.
301
CPTPP, supra note 172, art. 16.1.
302
Id. art. 16.4.
303
Id. art. 16.6.
59
IV. CONCLUSION: TOWARD A NEW MODEL FOR TRADE AND SUSTAINABLE DEVELOPMENT
As the AfCFTA is rolled out and implemented, it could have a profound impact on
international law, reshaping economic and trade rules for Africa and beyond. Given its size, scope,
and approach, the AfCFTA holds the potential to break new ground in different areas of substantive
law and close the loop between trade rules and the SDGs.
304
However, even though the AfCFTA
holds great promise, it still must contend with challenges, such as differences in countries’ legal
capacities, the need for inclusive rulemaking at the continental level, and the already complicated
legal landscape of the RECs.
While confronting these issues will continue to require trade and development flexibility,
consistent with traditional S&D, the AfCFTA does not stop there. It moves beyond past models to
take a more forward-looking view of the role that law will play in shaping opportunities for the
continent and AfCFTA partner states. The shift from “reactive” S&D, which has mainly carved
out exceptions to the rules, to “proactive” S&D, focused on design and application of the rules
themselves, can be seen in the AfCFTA’s structure and text.
305
Importantly, this shift signals that
the AfCFTA will establish a new normative basis for promoting trade and development through
the rules themselves, marking a significant departure from past approaches and putting Africa in
the driver’s seat as trade and investment law continues to evolve internationally.
Deeper negotiation of the rules-based issues highlighted in this paper is yet to come, and,
while this article sheds some light on the legal practices and trends that are likely to shape the
AfCFTA’s forthcoming phases, ultimately law in these areas will be determined by national and
regional policy priorities and regulatory practices. As trade negotiations in other parts of the world
304
See Kuhlmann, Carpentier, Francis, & Le Graet, supra note 43.
305
AfCFTA, supra note 7, art. 19.
60
have highlighted, it would be beneficial to make this process as participatory, inclusive, and
balanced as possible.
306
Also, as the limited comparative assessment included in this Article
highlights, good practices can and should come from a range of legal systems and practices, and
these should also be catalogued and considered to a greater degree.
The process of changing law through the AfCFTA will not be without its challenges. First,
the parties to the AfCFTA will have to determine how to create continental law out of a set of
sometimes fragmented regional legal agreements. The AfCFTA text specifically refers to the FTAs
created by the RECs as building blocks for the AfCFTA,
307
so it is clear that the existing system
will provide a foundation for the new agreement. While the RECs have made significant progress
over the past several years, their challenges with fragmentation and incomplete implementation
have also been well documented.
308
The AfCFTA can build upon these lessons learned, as well as
the experiences of other global regional trading blocs where relevant, as it pursues deeper
integration. Implementation issues will also intensify due to the number of countries involved and
diversity in legal systems. While these challenges can be overcome, doing so will require a better
understanding of the comparative legal landscape assessed in this Article along with a deeper
understanding of how trade agreements, and the substantive law they generate, can be effectively
implemented in practice.
Finally, the AfCFTA, while perhaps the most promising trade and sustainable development
model to date, does not yet address all areas of law important to trade and sustainable development.
For some issues, like gender, that are mentioned in the AfCFTA’s principles, the AfCFTA may
have to chart a new path forward, since real progress in changing the rules will require much more
306
See Kuhlmann, Carpentier, Francis, & Le Graet, supra note 43.
307
AfCFTA, supra note 7, art. 5(b).
308
See Iwa Salami, Legal and Institutional Challenges of Economic Integration in Africa, 17 EUR. L.J. 667 (2011).
61
than just affirmations of support. Incorporating gender equality through the rules, consistent with
the AfCFTA’s objective and SDG 5 (Gender Equality),
309
would be a notable innovation. The
approach to gender in the Canada-Chile, Chile-Uruguay, and Canada-Israel Free Trade
Agreements provides some insight, but a more comprehensive approach on trade and gender would
be beneficial and could be adapted to an African context.
310
Labor and work could also be more
fully integrated,
311
in line with SDG 8 (Decent Work & Economic Growth), taking note of relevant
recent developments, including the USMCA, as appropriate.
312
Further focus in other areas would also help the AfCFTA deliver on its goal of sustainable
development. As the global COVID-19 pandemic has highlighted, a more robust approach on trade
and public health in line with SGD 3 (Good Health and Well Being) is now critical. The AfCFTA’s
“building block” approach to continental integration could leverage regional value chains in order
to connect net exporting areas with net importing countries and ensure delivery of needed
medicines and supplies. This would depend, however, upon addressing rules in a number of areas,
including market access, export restrictions, IP, and regulation of medicines and medical
equipment. Some elements of such a strategy could be addressed through Phase II negotiations,
such as IP as discussed in Section III. However, consistent with the approach to development-led
rulemaking discussed in this Article, African nations and RECs could also take the lead in driving
new rules to respond to the COVID-19 global health crisis.
309
AfCFTA, supra note 7, art. 3(e).
310
See, e.g., Sama Al Mutair, Dora Konomi, & Lisa Page, Trade & Gender: Exploring International Practices That
Promote Women’s Economic Empowerment, TRADELAB (May 17, 2018), https://www.tradelab.org/single-
post/2018/05/17/Trade-and-Gender-1.
311
See, e.g., U.N. Economic Commission for Africa & Friedrich Ebert Stifting, The Continental Free Trade Area
(CFTA) in AfricaA Human Rights Perspective (Jul. 2017), https://repository.uneca.org/handle/10855/24089.
312
Alvaro Santos, The New Frontier for Labor in Trade Agreements, in WORLD TRADE AND INVESTMENT LAW
REIMAGINED: A PROGRESSIVE AGENDA FOR AN INCLUSIVE GLOBALIZATION 6 (Alvaro Santos, Chantal Thomas &
David Trubek eds., 2019).
62
On a related note, a comprehensive, continental approach to food security, aligned with the
Comprehensive Africa Agriculture Development Programme (CAADP), would also help deal with
ongoing food insecurity and market shocks, including the pandemic and recent locust infestation,
in order to further deliver on SDG 2 (Zero Hunger). It will be important that the rules on food
security go beyond market access and food safety standards to address other issues related to food
insecurity, such as farmers’ needs (including rules affecting access to agricultural inputs,
313
agricultural finance,
314
and agricultural logistics), regulatory aspects of cross-border agricultural
trade corridors (although some of these issues are reflected in the Annexes to the AfCFTA),
315
biodiversity, competition law and policy, land acquisition in investments, agricultural export bans,
and a balance between rules and policy space.
316
While it is notable that some issues related to
food security, such as genetic resources and competition law, could be also addressed through
Phase II rules-based negotiations, this cannot take the place of a full food security strategy, which
will require looking beyond standards and market access to address other issues in an inter-
connected market where some countries are net food producers and others net food consumers.
Issues related to environmental sustainability and climate change are also not a focus in the
current AfCFTA text, although the AfCFTA does affirm partner states’ right to regulate in this
area.
317
Future negotiating rounds could incorporate rules in line with SDG 13 (Climate Action),
313
This area of law is included in a number of existing RTAs, including COMESA, ECOWAS, and SADC, with
legislation at an advanced stage in the EAC as well; however, the approaches across these RECs do differ
somewhat, even though common legal elements exist. See, e.g., KUHLMANN, supra note 28.
314
Edward Katende & Katrin Kuhlmann, Building a Regulatory Environment for Agricultural Finance, (June
2019) (paper presented to Uganda Banker’s Association), https://cb4fec8a-9641-471c-9042-
2712ac32ce3e.filesusr.com/ugd/095963_a0e1d52d6040405c86334e2bfd8084dc.pdf.
315
Katrin Kuhlmann, Africa’s Development Corridors: Pathways to Food Security, Regional Economic
Diversification, and Sustainable Growth, in FILLING IN THE GAPS: CRITICAL LINKAGES IN PROMOTING AFRICAN
FOOD SECURITY 10 (2012).
316
See KUHLMANN, supra note 18.
317
AfCFTA, supra note 7, at Preamble.
63
including those to address barriers to trade in environmental goods and services,
318
phase out fossil
fuel subsidies, and institute voluntary eco-labeling programs, taking into account S&D
319
and
perhaps drawing upon the Agreement on Climate Change, Trade, and Sustainability (ACCTS)
which is planned for signature in 2020.
320
The AfCFTA could also consider provisions to
incorporate the circular economy, in support of SDG 12 (Responsible Consumption and
Production) and 13 (Climate Action), and address overfishing, in line with multilateral initiatives,
given the importance of SDG 12, 13, and 14 (Life Below Water). In addition, the AfCFTA could
further align with the SDGs by building an African tailored and designed approach to rule of law,
anti-corruption (which does appear in the USMCA), and institutional governance in connection
with SDG16 (Peace, Justice, and Strong Institutions).
321
Finally, given the importance of electronic commerce and cross-border services,
322
it is
promising that the AfCFTA will address digital economy and e-commerce issues as is planned for
Phase III.
323
The development benefits of digital transformation are significant and include
creating jobs, encouraging entrepreneurship, integrating women into the workforce, and improving
318
Environmental goods and services, according to a common definition developed in the 1990s by the
Organization for Economic Co-operation and Development (OECD) and Eurostat (the EU’s statistical agency),
encompass goods and services to measure, prevent, limit, minimize or correct environmental damages to water, air,
and soil as well as problems related to waste, noise and eco-systems. Examples include products related to clean
energy generation, such wind turbines, and services to monitor cities’ water supplies or support solar projects.
319
Environmental agreements also contain some elements of S&D, although, similar to trade agreements, the trend
is towards a more differentiated approach and less than full reciprocity. See Pauwelyn, supra note 82.
320
Ronald P. Steenbilk & Susanne Droege, Time to ACCTS? Five Countries Announce New Initiative on Trade and
Climate Change, INTL INST. FOR SUSTAINABLE DEV. (Sept. 25, 2019), https://www.iisd.org/blog/time-accts-five-
countries-announce-new-initiative-trade-and-climate-change.
321
Kuhlmann, Carpentier, Francis & Le Graet, supra note 43.
322
The World Bank has predicted significant gains for Africa through digital connectivity, with a global per capita
growth rate of 1.5 per year and reduction in poverty by 0.7 percent per year. World Bank, Digital Economy for
Africa Initiative: Every African Individual Business and Government to be Digitally Enabled by 2030 4, (June 24,
2019), http://pubdocs.worldbank.org/en/312571561424182864/062519-digital-economy-from-africa-initiative-Tim-
Kelly.pdf.
323
Ashley Hope, AfCFTA and Digital Trade Today, TRALAC (Working Paper No. T20WP01, 2020), at 6,
https://www.tralac.org/news/article/14400.
64
access to finance and food.
324
Building the enabling environment for digital trade would help
African governments achieve several SDGs through a technology focused lens,
325
especially SDG
1 (No Poverty), SDG 5 (Gender Equality), SDG 9 (Industry, Innovation and Infrastructure), and
SDG 10 (Reduced Inequality), among others.
326
Regulation in this area could include creating a
common framework for core regulatory areas in the digital economy, namely consumer protection,
data protection, cyber security, and electronic transactions (which are becoming increasingly
important, as the 2020 COVID-19 global health crisis has highlighted).
327
Although not all African
countries currently have regulation in these areas, different approaches to digital regulation are
already appearing throughout Africa, ranging from umbrella laws that cover all or most core
regulatory areas in the digital space to separate laws for different aspects of digital regulation.
328
Some regional rules exist as well, such as the ECOWAS harmonized regulation of data protection,
which provides for an “adequate level of protection for privacy, freedom and the fundamental
rights of individuals.”
329
As the discussion on IP, investment, and consumer protection highlighted,
the AfCFTA might have to consider the best approach to a continental rules-based framework that
can also strike a balance with domestic regulatory autonomy.
330
Digital inclusion could also be a
324
Kuhlmann, supra note 118, at 3.
325
CENTER FOR INTERNATIONAL PRIVATE ENTERPRISE AND NEW MARKETS LAB, DIGITAL ECONOMY ENABLING
ENVIRONMENT GUIDE: KEY AREAS OF DIALOGUE FOR BUSINESS AND POLICYMAKERS 8 (2018).
326
Kuhlmann, supra note 118, at 4.
327
CENTER FOR INTERNATIONAL PRIVATE ENTERPRISE AND NEW MARKETS LAB, DIGITAL ECONOMY ENABLING
ENVIRONMENT GUIDE: KEY AREAS OF DIALOGUE FOR BUSINESS AND POLICYMAKERS 9 (2018).
328
For example, countries such as South Africa and Ghana have one overarching act covering consumer protection,
cybercrime, and electronic transactions, while data protection and privacy are regulated separately. Kenya has a
different approach, whereby one act covers electronic transactions and cybercrimes and another covers data
protection and privacy. Nigeria, Ethiopia, and Cote D’Ivoire, in contrast, have four separate legal instruments
regulating the four separate areas. While, a single law can sometimes facilitate more efficient implementation,
separate laws can also allow for greater flexibility. Kuhlmann, supra note 118, at 5.
329
Economic Community of West African States, Supplementary Act A/SA.1/01/10 on Personal Data Protection
within ECOWAS (Feb. 16, 2010), art. 36(1), http://www.statewatch.org/news/2013/mar/ecowas-dp-act.pdf.
330
For an additional resource on the status of African digital regulation, see Data Protection Africa, ALT
ADVISORY, www.dataprotection.africa (last visited on June 30, 2020).
65
specific focus, as highlighted by the recent Digital Economy Partnership Agreement signed by
Chile, New Zealand, and Singapore which references indigenous communities, women, rural
populations, and low socio-economic groups.
331
Although the AfCFTA is still in its early stages, and more research on its design and
impacts will be needed, it is a promising starting point for a new trade and investment model that
could upend outdated trade models and enable all countries to benefit as Africa’s market expands.
Reflecting, and increasingly influencing, the broader legal and development trends highlighted in
this Article, the AfCFTA is shifting the dialogue toward sustainable development and providing a
much-needed channel for broader legal change in a global trade regime in need of new paths
forward.
331
Digital Economy Partnership Agreement, Singapore, Chile, and New Zealand, June 12, 2020.
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Protecting Traditional Knowledge in Africa: Considering African Approaches, 4 (2) African Human Rts
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Loretta Feris, Protecting Traditional Knowledge in Africa: Considering African Approaches, 4 (2) African Human Rts. J. 242, at (2004).
Exhaustion of Local Remedies in International Investment Law
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See Martin Dietrich Brauch, Exhaustion of Local Remedies in International Investment Law (2017), https://www.iisd.org/library/iisd-best-practices-series-exhaustion-local-remedies-international-investment-law.