Can Africa’s trade agreements handle regional integration?

On 31st May 2019, the Commission of the Economic Community of West African States (ECOWAS) launched its Regional Competition Authority – the ECOWAS Regional Competition Authority (ERCA). The ERCA was established to implement the Regional Competition Rules adopted by the ECOWAS Authority in 2008 to promote inter alia regional competition and regional integration.

While the ECOWAS Regional Competition Rules covers West African States, the Common Market for Eastern and Southern Africa (COMESA) also has competition rules that cover Eastern and Southern African countries. These regional blocs within Africa have somewhat coalesced into the drive leading to the African Continental Free Trade Area (AfCFTA). [Other recognised Regional Economic Communities under AfCFTA include the Arab Maghreb Union (UMA); the Community of Sahel-Saharan States (CEN-SAD); the East African Community (EAC); the Economic Community of Central African States (ECCAS); and the Southern African Development Community (SADC)]. As earlier discussed here on The IPKat, the goal of regional integration and its benefits continues to be at the forefront of the drive for AfCFTA. Indeed, one of the objectives of AfCFTA as stated in Article 3 is to “create a single market for goods, services, facilitated by movement of persons in order to deepen the economic integration of the African continent…”

Regional Katintegration?

The AfCFTA currently has Protocols on Trade in Goods, Trade in Services, Rules and Procedures on the Settlement of Disputes, while the Protocols on Investment, Intellectual Property Rights, Competition Policy, are currently under negotiation. These Protocols are interconnected: ratification of the AfCFTA means ratification of all the Protocols, once adopted by the General Assembly. See Article 8. The Protocol on IP, which is likely to attract significant interest for readers of this blog, has the potential to advance a continental approach to a balanced IP rights for Africa. See here and here. However, as this Africa Correspondent has opined here, the success of the Protocol on IP is hinged on various factors including the success of the Dispute Settlement Mechanisms established under Article 20 of AfCFTA. Also, as noted here, competition rules and polices may not only complement IP regimes but may also protect competition in IP-related markets.

It is no longer news that despite these moves (and aspirations) towards regional integration, the past few days have seen increased xenophobic attacks against Africans living in South Africa. See reports here and here. The attacks have been in various forms but for the purposes of the current discourse, the attacks have involved people looting third party business premises owned by other Africans, burning and destroying of African-owned business premises and properties. “Retaliatory” attacks have been carried out Nigeria and Zambia against South African owned businesses.

This is not the first time Africans and African businesses have been targeted and attacked in other African countries. Between 2015 and 2019 alone, there were several attacks against African non-South African immigrants (a mouthful there) and non-South African businesses (including Nigerians and Nigerian businesses) in South Africa and many lost their lives in the process. In this year (2019) as well, Nigerian businesses have complained of xenophobic treatment and deportation from their Ghanaian hosts. Several decades ago in  1983, Nigeria deported over 2 million West Africans (especially Ghanaians) accusing them of being illegal immigrants, being criminals and taking over local jobs etc.

In the circumstances, it seems that the goals of economic efficiency and regional integration may continue to elude Africa and regional trade in and within Africa. If the point of AfCFTA (and ECRA, COMESA and other regional economic communities) is to promote regional trade and integration, what will happen to businesses who leverage on such trade agreements to advance their businesses only to find themselves subject of xenophobic attacks? How can businesses take advantage of AfCFTA to trade in other African countries when they may not feel safe enough to succeed, enjoy their success and have African consumers enjoy the benefits of healthy competition?

With respect to the recent xenophobic attacks against Nigerians and Nigerian businesses in South Africa, Nigeria (and other African countries such as Rwanda, Congo and Malawi) have condemned the attacks and are rumoured to have boycotted the World Economic Forum for Africa meeting holding in Cape Town because of the latest xenophobic attacks. Nigeria has also recalled its ambassador to South Africa. South Africa has condemned the attacks and have promised to bring perpetrators to book, with several persons arrested.

For this Africa Correspondent, the pertinent question for regional trade and regional integration goals presently is: what is or should be the role of the African Member States. Is it only to negotiate and adopt trade agreements? Is it possible to formulate Africa’s Dispute Settlement Mechanisms to recognise and address the threat that xenophobia poses to regional integration and free trade? Should Dispute Settlement Mechanisms within the African context lie only in formal procedures and institution of actions interpreting rights and obligations under AfCFTA? When or under what circumstances may it be said that a dispute has arisen? Who would be beneficiaries of the outcome of such disputes? How should disputes be formulated? For instance, would the current xenophobic attacks targeted at Nigerian businesses in South Africa and the actions/inactions of the South African government amount to a “dispute”? Or, would such “dispute” be formulated and/or resolved outside the trade agreements and perhaps, within political statements/actions?

These are questions that would help determine whether or not Africa’s regional trade agreements would be effective. Beyond formulating the terms of trade agreements, African States must be prepared to do their part in providing an enabling environment for implementation and enforcement. That way, Africa can handle regional integration if when it comes.