Dispute settlement at the World Trade Organisation (WTO) is in urgent need of reform. For nearly two decades, the USA had accused the Appellate Body of judicial overreach and action against the institution escalated under both the Obama and Trump administrations. In November 2022, the quasi-judicial system that has long been referred to as the ‘jewel in the crown’ of the WTO lost its appellate function as the term of its final Member, Dr Hong Zhao, expired. With the US refusal to reappoint members to the Appellate Body, the WTO’s dispute settlement system has been slowly asphyxiated. The WTO’s two-tier dispute settlement system was designed to ensure that Members had access to transparent, independent and timely decision-making.
August 19, 2019
One would be justified in thinking that AU member states have intentionally created a court which they consciously know they would hardly use given the inertia identified above. If the reforms that would extend standing to private parties are not undertaken, there is little guarantee that Member States will suddenly change their habits. Assuming for once that they trigger the mechanism, it is also very likely that, consistent with their practice for political solutions to legal problems, they would not proceed beyond the consultation and good offices stages provided in Articles 7 and 8 of the Dispute Settlement Protocol.
The AfCFTA-DSM will be nestled in a culture of African States that does no pursue formal settlement of trade disputes before judicial or quasi-judicial bodies. Given the dearth of core economic integration disputes before the African regional economic community courts; and, the failure of previous WTO-like DSM transplanted at the regional level, what potential if any, has the AfCFTA-DSM to chart a new course? Similarly, what can we garner about the culture of African States towards trade disputes?
The settlement of disputes under the AfCFTA will be governed by the Protocol on Rules and Procedures of the Settlement of Disputes which provides for the establishment of Dispute Settlement Body with authority to establish panels to receive and determine interstate trade disputes. Thus, individuals do not have direct access to the DSP. Therefore, this raises the question: Is this mechanism attractive and would states use it? It is premature to predict whether or not states will use it.
The AfCFTA is thus a positive development for Africa as it seeks to advance its own interests through intra-African trade. For a region of the world that contributes to only about 3% of global trade, increasing intra-African trade is a laudable project. For example, while intra-Asia and intra-Europe trade account for 59 per cent and 69 per cent of exports respectively, intra-African trade accounts for only 18 per cent of total exports. However, despite the modest successes at improving intra-African trade through the eight African Union-recognized regional trade agreements on the continent, there are genuine apprehensions regarding the viability of the proposed AfCFTA.