On April 2, 2019, The Gambia became the 22nd country to ratify the African Continental Free Trade Agreement (AfCFTA), which was the minimum threshold to approve the deal among the 55-member states of the African Union (AU). The AfCFTA aims to provide a single continental market for goods and services, as well as a customs union with free movement of capital and business travelers. Although the agreement will enter into force one week from tomorrow (on May 30, 2019), the negotiations for the Protocols and other important matters such as tariff schedules, rules of origin, and sector commitments are still being negotiated. However, once the treaty is fully in force, it is expected to cover a market of 1.2 billion people and combined gross domestic product of $2.5 trillion, which would make it the world’s largest free trade area since the creation of the World Trade Organization. This could be a game-changer for Africa. Indeed, the U.N. Economic Commission on Africa predicts that the AfCFTA could increase intra-African trade by as much as 52.3%, and that this percentage will double when tariff barriers are eliminated. The AfCFTA promises to provide substantial opportunities for industrialization, diversification, and high-skilled employment. And the AU’s larger goal is to utilize the AfCFTA to create a single common African market.
Yet there are a number of challenges that could thwart the effectiveness of this new treaty in promoting free trade and economic development. Corruption is one of those challenges. International indexes indicate that Sub-Saharan Africa is perceived as the most corrupt region in the world, with North Africa not much better. The current version of the treaty, however, does not address corruption directly. It should.
The current version of the AfCFTA addresses concerns about corruption in trade only obliquely and insufficiently. The current version of the treaty does include a section on transparency (Part IV), which mandates that “each state party shall promptly publish or make publicly available through accessible mediums its laws, regulations, procedures and administrative rulings of general application.” However, there is no mention of how to ensure that making laws publicly available is matched with fairness and integrity in how these laws are enforced. Another section of the treaty mandates that State Parties “shall take appropriate measures” to promulgate and sustain “enhanced efficiency of customs procedures, trade facilitation and transit,” but does not specifically reference curtailing customs corruption as one of those measures that would be “appropriate.” And although the agreement’s Protocol on Trade in Goods specifically mentions that “nothing in this Protocol shall be construed as preventing the adoption or enforcement of measures by any State Party that are necessary to protect public morals or to maintain public order,” there is no clear guideline on ensuring fair and honest enforcement. Likewise, though the current version of the AfCFTA’s Protocol on Trade in Services does mention “the prevention of deceptive and fraudulent practices,” this language appears in the context of what the State Parties have the power to do within their countries, not what the AfCFTA mandates that they do.
The AfCFTA ought to be updated, as soon as possible, to include measures that maintain integrity in customs and trade practices, and that hold the countries directly accountable, through the State Party representatives, for addressing this issue. This should be done in two ways.
- First, the AfCFTA should include a section dedicated to anticorruption, to help ensure that State Parties can operate and compete in foreign markets with greater confidence that they will receive fair treatment. Drawing from other treaties, such as the Trans-Pacific Partnership (TPP) and the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA), the AfCFTA should require countries to have measures prohibiting corruption, protecting whistleblowers, and requiring accession to the United Nations Convention against Corruption (UNCAC). A proposed text, which parallels the transparency provision already included in Part IV of the existing treaty, reads as follows:
Article 18: Statement of Principles
- Each State Party affirms its resolve to eliminate bribery and corruption in international trade and investment.
- Each State Party shall ratify or accede to the United Nations Convention against Corruption (UNCAC).
Article 19: Anticorruption Measures
- Each State Party shall adopt and maintain the necessary legislative or other measures to establish, as a criminal offense under its law, in matters affecting international trade or investment:
- the promise, offering or giving to a public official and the solicitation or acceptance by a public official, directly or indirectly, of an undue advantage, for the official or another person or entity, in order that the official act or refrain from acting in relation to the performance of or the exercise of his or her official duties;
- the promise, offering or giving to a foreign public official or an official of a public international organization, directly or indirectly, of an undue advantage, for the official or another person or entity, in order that the official act or refrain from acting in relation to the performance of or the exercise of his or her official duties, in order to obtain or retain business or other undue advantage in relation to the conduct of international business; and
- the aiding or abetting, or conspiracy in the commission of any of the offenses described in subparagraphs (a) through (c).
- Each State Party shall make the commission of an offense described in Paragraph 1 liable to sanctions that consider the gravity of that offense.
- Each State Party shall adopt or maintain measures, in accordance with its laws and regulations, regarding the maintenance of books and records, financial statement disclosures, and accounting and auditing standards, to prohibit the establishment of off-the-books accounts, the use of false documents, and the recording of non-existent expenditure.
- Each State Party shall endeavor to adopt or maintain appropriate measures to protect persons who, in good faith, report acts of bribery or corruption described in paragraph 1.
- Second, along with the proposed changes above, the AfCFTA should mandate a code of conduct, a system-wide conflict of interests check, and public complaint mechanisms. These measures should be applied directly to the existing provisions for the Council of Ministers (the group of trade ministers responsible for implementing the AfCFTA), the Committee of Senior Trade Officials (the secretaries who implement the decisions of the Council of Ministers and direct the Secretariat), the Secretariat, the Dispute Settlement Body (DSB), Panels, and the Appellate Body. Under the current version of the agreement, only the Panels have a mandatory code of conduct and stringent criteria related to selection, composition, procedures, and confidentiality. For the other positions, the agreement does not give any clear guidance on how their power can be checked and how to sanction them for corrupt conduct. Given the high risk of bribery with respect to all of these officials, the AfCFTA needs language that plainly describes the selection process, checks and balances, and sanctions these individuals would receive if they act corruptly. A proposed text is below:
Article 20: Promoting Integrity among Public Officials
- To fight corruption, each State Party shall promote integrity, honesty, and responsibility among its public officials. Each State Party, in accordance with the fundamental principles of its legal system, shall adopt or maintain:
- measures to provide adequate procedures for the selection and training of public officials;
- appropriate policies and procedures to identify and manage actual or potential conflicts of interest of public officials;
- measures that require senior and other appropriate public officials to make declarations to appropriate authorities regarding, among other things, their outside activities, employment, investments, assets and substantial gifts or benefits from which a conflict of interest may result with respect to their functions as public officials; and
- measures to facilitate reporting by public officials of acts of corruption to appropriate authorities.
- Each State Party shall endeavor to adopt or maintain codes or standards of conduct for the correct, honorable, and proper performance of public functions, and measures providing for disciplinary or other measures, if warranted, against public officials who violate the codes or standards established in accordance with this paragraph.
- Each State Party, to the extent consistent with the fundamental principles of its legal system, shall consider establishing procedures through which a public official accused of an offense described in Article 19.1 (Anticorruption Measures) may, where appropriate, be removed, suspended, or reassigned by the appropriate authority, bearing in mind respect for the principle of the presumption of innocence.
I acknowledge that convincing members of the AfCFTA that anticorruption measures are necessary may prove challenging—especially if it is to check their powers. But given the threat that unchecked corruption poses to AfCFTA’s great promise, it is crucial for the AU to take a second look at the AfCFTA agreement and to start developing ways to update the document by incorporating anticorruption measures such as those just presented.