The African Union's Self-Financing-Mechanism: A Critical Analysis in terms of the World Trade Organisation's Rules and Regulations

Abstract

The purpose of this paper is to critically analyse from a theoretical perspective the compatibility of the African Union's (AU's) self-financing mechanism (SFM) with the rules and regulations of the World Trade Organisation (WTO) Most-Favoured-Nation (MFN) principle, which forms an integral part of the anti-discrimination provisions. The AU consists of 55 African countries, most of them members of the WTO. The SFM agreed is in the form of a 0.2 per cent levy applied to all eligible goods imported from a non-AU member state into the territory of an AU member state. As most of the AU member states (AUMSs) are WTO members, they must adhere to all the rules and regulations of the WTO. It is against this backdrop that this paper analyses the AU SFM against the relevant WTO rules and regulations. Most importantly this paper will provide recommendations for the compatibility of the AUs SFM in terms of the existing WTO rules and principles, such as the operation of the Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries, more commonly referred to as the Enabling Clause, given the WTOs general classification of all African countries as developing or least developed countries. The need for the AU to be self-sustainable financially in order for it to achieve its goals and objectives has most recently been reinforced.by the economic repercussions of the COVID-19 pandemic both locally and internationally.