States, Member States, State Parties, Non-State Parties, and Third Parties: What do these terms mean in the context of the AfCFTA?
We are often asked to clarify certain terms in the text of the African Continental Free Trade Area (AfCFTA) Agreement.[1] The word “State” appears in different settings in the legal instruments of the AfCFTA. In this Newsletter, we discuss the meaning of this term, and of some related ones, within the contexts in which they are used. We also describe how the AfCFTA Agreement has come into existence. We start by explaining basic features of international agreements as inter-state legal instruments.
International agreements and governance[2]
States need legal instruments to facilitate and regulate their interaction with each other. In the absence of an international legislature, international agreements (treaties) are the instruments used for establishing the required legal arrangements and institutions. International trade is an obvious example of an area where international agreements are necessary.
Every state possesses capacity to conclude treaties.[3] International agreements are also used to establish international organisations and to define the powers which they (or their organs) may exercise.[4] An international agreement must, of course, be in force for its provisions to be binding. They will be binding for those states which have become parties to the particular agreement in terms of the applicable entry into force provision.
States are sovereign.[5] This means a state has exclusive jurisdiction over its own territory, enjoys sovereign equality, and cannot be bound by treaties unless it has given its consent. How sovereignty is exercised within a state is a different matter; in modern democracies, the constitution is usually the supreme law of the land.
International agreements are typically negotiated, adopted, signed, and ratified in order to become binding on those states that have decided to become parties to them. According to the Vienna Convention on the Law of Treaties (VCLT), “ratification”, “acceptance”, “approval” and “accession” mean in each case the international act so named whereby a state establishes on the international plane its consent to be bound by a treaty.[6] Accession is the act whereby a state becomes a party to an agreement which has already entered into force. Bilateral agreements are easier to conclude; they often enter into force once signed by both parties.
The text of an international agreement must explain how and when it will enter into force. In the case of the AfCFTA Agreement, that answer is provided in Article 23 of the Agreement establishing the AfCFTA: This Agreement and the Protocols on Trade in Goods, Trade in Services, and Protocol on Rules and Procedures on the Settlement of Disputes shall enter into force thirty [30] days after the deposit of the twenty second [22nd] instrument of ratification.
What is the AfCFTA and where does it stand?
The AfCFTA is an initiative and a flagship project of the African Union (AU). Technically, it consists of a continent-wide trade and economic integration arrangement based on an International Agreement to which certain Protocols, Annexes and Appendices have been added. Together, they form one single legal instrument called the AfCFTA Agreement. They allow the AfCFTA to function as a member-driven Free Trade Area (FTA) for trade in goods and in services. The Phase I AfCFTA Protocols cover trade in goods, trade in services, and dispute settlement. Phase II Protocols have subsequently been adopted, on investment,[7] competition policy, and intellectual property rights[8].
The AfCFTA Agreement entered into force on 30 May 2019, before all the negotiations were completed. Officially, AfCFTA trading (on the basis of legally implementable and reciprocal tariff schedules with agreed rules of origin) began on 1 January 2021.[9] However, actual trade under AfCFTA rules has not yet happened. Some State Parties have not yet submitted their schedules of tariff concessions, and the rules of origin for certain textile and clothing products, and for automotive products (Annex 2 to the Protocol on Trade in Goods), must still be agreed.[10]
The Protocol on Trade in Services also has some outstanding issues. Some State Parties have not yet submitted their schedules of specific commitments for the 5 priority services sectors, or they have not yet been verified as compliant with the negotiation modalities. This work is expected to be completed by the end of 2023. Once the schedules of commitments have been adopted by the AU Assembly, they have to be gazetted in accordance with the Ministerial Directive on the Implementation of the Schedules of Specific Commitments. Frameworks for regulatory cooperation are also on the agenda. So far, the work programme has focused on regulatory frameworks for financial and communication services.
The Guided Trade Initiative (GTI) was launched on 7 October 2022 and involves a small number of AfCFTA State Parties and a limited number of products. It seeks to allow commercially meaningful AfCFTA-based trading, while testing the operational, institutional, legal and trade policy environment under the AfCFTA. A Phase 2, which is expected to include 29 State Parties and to cover more than the 96 Phase 1 products, is planned to be launched before the end of 2023. A GTI for services is also expected to begin soon.
The AfCFTA as a legal pact
Article I of the Agreement establishing the AfCFTA contains the following important definition: “Agreement” means [in the legal instruments of the AfCFTA] this Agreement Establishing the African Continental Free Trade Area and its Protocols, Annexes and Appendices which shall form an integral part thereof. (Emphasis added.)
One should distinguish between the different legal instruments of the AfCFTA Agreement. The first is “this Agreement Establishing the African Continental Free Trade Area”. The others are the AfCFTA Protocols, which have their own Annexes and Appendices. (For Annex 9 to the Protocol on Trade in Goods there are also Guidelines on Implementation of Trade Remedies.) The Protocols are detailed and have their own definition clauses.
The architecture of the AfCFTA as a collection of legal instruments looks as follows:
