The South Africa-based Trade Law Centre (TRALAC) has published a Comment that reflects on the implications of the SADC experience of dispute settlement for the Dispute Settlement Mechanism that is to be established under the proposed Tripartite FTA (T-FTA) of COMESA, the EAC and SADC. The Comment raises a number of technical points with reference to Article 38 of the draft T-FTA Agreement and Article 4 of the T-FTA Annex 13 on dispute settlement, which commits member states in the first instance to cooperation and consultation in the resolution of disputes.
The Comment notes the need for automatic procedures for the establishment of dispute settlement panels and the importance of avoiding procedures which de facto grant the alleged violators power of veto over requests to establish a dispute settlement panel. It is argued that the current consensus principle, which has traditionally informed SADC decision-making processes (including the suspended SADC Tribunal), inevitably results in the establishment of such veto rights. The TRALAC analysis contrasts this with the WTO process whereby a Member State which is the subject of a complaint cannot prevent the establishment of a Panel.
It is maintained in the Comment that the implications of the current T-FTA draft provisions regarding notification of a pending dispute are unclear. It poses the question: Will the Member State which is the subject of a complaint have powers to block the establishment of a Panel? Currently the T-FTA Council, which is empowered to take decisions on the establishment of a dispute settlement panel, will include the participation of both the complaining member State and the State to which a complaint relates. It is argued that if T-FTA Council decisions have to be made on the basis of consensus, then disputes may in fact never be settled through adjudication.
The analysis calls for these procedural ambiguities to be clarified expeditiously, bearing in mind the unfortunate fate of the SADC Tribunal (see Agritrade article SADC FTA implementation shortcoming highlights scale of T-FTA challenge, 22 July 2013).