Accelerated action for the adoption of best practices in trade and investment for the benefit of China-Africa co-operation’s legal framework Ignatious Nzero LLB (UFH), LLM (UKZN), LLD CANDIDATE (UNI. PRETORIA) Paper presented at the 4TH Forum on China-Africa Co-operation (FOCAC) LAL FORUM, Victoria Falls, 18-20 November 2013.

Introduction Best practices : established principles underlying the multilateral trading and investment system Legal framework : enforceable standards Assumptions: mutual trade and investment enhance general standards of living Currently no comprehensive legal framework to foster China-Africa trade and investment co-operation Use the established principles to formulate China-Africa trade and investment legal framework

The multilateral trading system Principles of the WTO The WTO established by the WTO Agreement WTO custodian of the MTs WTO administer the MTs, legal instruments eg. WTO Agreement, DSU, GATT WTO Agreement Est. WTO – one-stop shop Mechanism to facilitate, administer Multilateral trading Agreements (MTAs)

Ctd… Provides forum for negotiation (key to the MTs) Emphasise the spirit of negotiation Reiterates the significance of trade (PREAMBLE) Provides mechanisms for reducing tariffs and other barriers to trade (trade liberalisation/ free trade) Decision making (inclusive) Treatment of developing and least developed nations as designated by the UN eg. irto commitments Based on contractual consesus

WTO Agreement and lessons for China-Africa Mutually beneficial trade Differential treatment based on countries’ levels of economic development A one-stop-shop Freedom to contract

The GATT Most important of the MTAs 1947 lays foundation for WTO-current 1994 annexed to the WTO Agreement (Annex.1A) Primarily- reduce tariffs and eliminate barriers to trade and discriminatory practices Promote free trade Confirms principles of the WTO eg. Treatment of developing countries Most Favoured Nation principles (MFN) – Art. 1 exception to the general non-discrimination principle Freedom of transit of trade commodities

Ctd… General exception to the non-discrimination principles Aim to balance free trade and other relevant interests Protect public morals Protect human, animals or plant life or health (environment) Conservation of exhaustible natural resources Protect domestic industries N/B conditions for application of the General Exceptions- not in a manner that unnecessarily hamper international trade eg. In an arbitrary or unjustified discrimination between countries where same conditions apply

Free v fair trade GATT exceptions illustrates the need to balance free trade and other interests relevant to trading nations The concept is relevant to China-Africa trade co-op. Free trade and dumping Dumping def in Art. VI of GATT ‘the Anti-dumping and countervailing duties clause’ Art. VI provides a built in mechanism aimed at combating dumping Contains conditions upon which duties can be levelled Question : how to adapt the measures to the China-Africa trade context?

Dispute settlement mechanism Disputes inevitable in trade Def. of dispute MTs- regulated by the DSU –central to WTO Founded on principle that Members willingly accept to be bound by the legal processes of the WTO Principles : primarily aim at settling trade disputes Consultation Inclusive Respect for the processes Due process and rules of natural justice

Ctd… Compliance, remedy and enforcement Parties feel bound by outcome as a result of the respect they have for the process Arbitration- thriving to secure a settlement Retaliation –last resort Status of developing countries Assistance – aimed at levelling the playing field No complaints against Flexible timeframes if dispute involves a developing country The Dispute Settlement mechanism and lessons for China-Africa Flexibility Equality ( a level playing field ) Rules of natural justice Culture of respect of the processes makes outcome acceptable

A legal framework for fostering China-Africa investment relations BIPPAs –provides a building block Aims at ensuring a predictable and stable investment environment conducive for investment Promotion and protection of cross-border investment Provides rights and obligations for both the investing and the host nation Within the China-Africa context to create IPPAs in individual countries–legally constitutes and empower them Capacitates IPPAs Provides clear rules and processes for investment promotion and protection Establish a one-stop- shop for investment promotion and protection between China and Africa

Fostering the China-Africa trade and investment co-operation: the legal framework A need for a one-stop-shop to promote trade and investment Legal rules to give impetus to the trade and investment promotion system Use the established principles of the MT&I s Adapt the MT&Is to suit China-Africa trade and investment needs Adopting and adapting the best standards for trade and investment and formulating an enforceable legal standard Will enhance trade and investment for the mutual benefit of China and Africa