Treaty establishing the African Economic Community (AEC) - Part 3

Table of Contents

Preamble
Chapter I Definitions
Chapter II Establishment, Principles Objectives, General Undertakings and Modalities
Chapter III Organs of the Community
Chapter IV Regional Economic Communities
Chapter V Customs Union and Liberalisation of Trade
Chapter VI Free Movement of Persons, Rights of Residence and Establishment
Chapter VII Money, Finance and Payments
Chapter VIII Food and Agriculture
Chapter IX Industry, Science, Technology, Survey, National Resources and Environment
Chapter X Transport, Communications and Tourism
Chapter XI Standardisation and Measurement Systems
Chapter XII Education, Training and Culture
Chapter XIII Human Resources, Social Affairs, Health and Population
Chapter XIV Co-operation in Other Matters
Chapter XV Special Provisions in respect of certain countries
Chapter XVI Solidarity, Development and Compensation Fund
Chapter XVII Financial Provisions
Chapter XVIII Settlement of Disputes
Chapter XIX Relations between the Community and Regional Economic Communities, Regional, Continental Organisations and Other Socio-Economic Organisations and Associations
Chapter XX Relations between the Community, Third States and International Organisations
Chapter XXI Relations between Member States, Third States, Regional and Sub-Regional Organisations and International Organisations
Chapter XXII Miscellaneous Provisions

Chapter V
Customs Union and Liberalisation of Trade

Article 29
Customs Union

Member States of each regional economic community agree to progressively establish among them during a transitional period specified in Article 6 of this Treaty, a Customs Union involving:

1. The elimination, among Members States of each regional economic community, of customs duties, quota restrictions, other restrictions or prohibitions and administrative trade barriers, as well as all other non-tariff barriers; and
   
   
2. The adoption by Member States of a common external customs tariff.

Article 30
Elimination of Customs Duties Among Member States of Regional Economic Communities

1. During the second stage, Member States of each regional economic community shall refrain from establishing among themselves any new customs duties and from increasing those that apply in their mutual trade relations.

2. During the third stage, Member States shall progressively reduce and eliminate finally among themselves, at the level of each regional economic community, customs duties in accordance with such programme and modalities as shall be determined by each regional economic community.

3. During each stage, the Assembly, on the recommendation of the Council, shall take the necessary measures with a view to co-ordinating and harmonising the activities of the regional economic communities relating to the elimination of customs duties among Member States.

Article 31
Elimination of Non-Tariff Barriers to Intra-Community Trade

1. At the level of each regional economic community and subject to the provisions of the Treaty, each Member State shall, upon the entry into force of this Treaty, progressively relax and ultimately remove quota restrictions, and all other non-tariff barriers and prohibitions which apply to exports to that State, of goods originating in the other Member States, at the latest, by the end of the third stage and in accordance with paragraph (2) of this Article. Except as otherwise provided or permitted by this Treaty, each Member State shall thereafter refrain from imposing any further restrictions or prohibitions on such goods.

2. Subject to the provisions of this Treaty, each regional economic community shall adopt a programme for the progressive relaxation and ultimate elimination, at the latest by the end of the third stage, of all quota restrictions and prohibitions and all other non-tariff barriers that apply in a Member State, to imports originating in the other Member States; it being understood that each regional economic community may subsequently decide that all quota restrictions, other restrictions and prohibitions be relaxed or removed within a shorter period than that prescribed in this paragraph.

3. The arrangements governing restrictions, prohibitions, quota restrictions, dumping subsidies and discriminatory practices shall be the subject of a Protocol concerning Non-Tariff Trade Barriers.

Article 32
Establishment of a Common External Customs Tariff

1. During the third stage, Member States shall, at the level of each regional economic community, agree to the gradual establishment of a common external customs tariff applicable to goods originating from third States and imported into Member States.

2. During the fourth stage, regional economic communities shall, in accordance with a programme drawn up by them, eliminate differences between their respective external customs tariffs.

3. During the fourth stage the Council shall propose to the Assembly the adoption, at Community level, of a common customs and statistical nomenclature for all Member States.

Article 33
System of Intra-Community Trade

1. At the end of the third stage, no Member State shall, at the level of each regional economic community, levy customs duties on goods originating in one Member State and imported into another Member State. The same prohibition shall apply to goods originating from third States which are in free circulation in Member States and are imported from one Member State into another.

2. The definition of the notion of products originating in Member States and the rules governing goods originating in a third States and which are in free circulation in Member States shall be governed by a Protocol concerning the Rules of Origin.

3. Goods originating from third States shall be considered to be in free circulation in a Member State if (i) the import formalities relating thereto have been complied with, (ii) customs duties have been paid thereon in that Member State, and (iii) they have not benefited from a partial or total exemption from such customs duties.

4. Member States undertake not to adopt legislation implying direct or indirect discrimination against identical or similar products originating from another Member State.

Article 34
Internal Taxes

1. During the third stage, Member States shall not levy, directly or indirectly on goods originating from Member State and imported into any Member State, internal taxes in excess of those levied on similar domestic products.

2. Member States, at the level of each regional economic community, shall progressively eliminate any internal taxes levied for the protection of domestic products. Whereby virtue of obligations assumed under a prior agreement signed by a Member State, that Member State is unable to comply with this Article, it shall notify the Council of this fact and shall not extend or renew such agreement when it expires.

Article 35
Exceptions and Safeguard Clauses

1. Notwithstanding the provisions of Articles 30 and 31 of this Treaty, any Member State, having made its intention known to the Secretariat of the Community which shall inform Member States thereof, may impose or continue to impose restrictions or prohibitions affecting:

1. The application of security laws and regulations;
   
   
2. The control of arms, ammunitions and other military items and equipment;
   
   
3. The protection of human, animal or plant health or life, or the protection of public morality;
   
   
4. Export of strategic minerals and precious stones;
   
   
5. The protection of national treasures of artistic or archaeological value or the protection of industrial, commercial and intellectual property;
   
   
6. The control of hazardous wastes, nuclear materials, radio-active products or any other material used in the development or exploitation of nuclear energy;
   
   
7. Protection of infant industries;
   
   
8. The control of strategic product; and
   
   
9. Goods imported from a third country to which a Member State applies total prohibition relating to country of origin.

2. The prohibitions or restrictions referred to in paragraph 1 of this Article shall in no case be used as a means of arbitrary discrimination or a disguised restriction on trade between Member States.

3. Where a Member State encounters balance-of-payments difficulties arising from the application of the provisions of this Chapter, that Member State may be allowed by the competent organ of the Community, provided that it has taken all appropriate reasonable steps to overcome the difficulties, to impose, for the sole purpose of overcoming such difficulties, quantitative or similar restrictions or prohibitions on goods originating in the other Member States for such period as shall be determined by the competent organ of the Community.

4. For the purpose of protecting an infant or strategic industry, a Member State may be allowed by the competent organ of the Community, provided it has taken all appropriate reasonable steps to protect such industry, to impose, for the sole purpose of protecting such industry, quantitative or similar restrictions or prohibitions, on similar goods originating in the other Member States for such period as shall be determined by the competent organ of the Community.

5. Where the imports of a particular product by a Member State from another Member State increase in a way that causes, or is likely to cause, serious damage to the economy of the importing states. The latter may be allowed by the competent organ of the Community to apply safeguard measures for a specified period.

6. The Council shall keep under regular review the operation of any quantitative or similar restrictions or prohibitions imposed pursuant to paragraphs 13, and 4 of this Article and shall take appropriate action in this connection. It shall submit, each year, to the Assembly, a report on the aforementioned matters.

Article 36
Dumping

1. Member States shall prohibit the practice of "dumping" within the Community.

2. For the purposes of this Article, "dumping" shall mean the transfer of goods originating from a Member State to another Member State for them to be sold:

1. At a price lower than the usual price offered for similar goods in the Member State from which those goods originate, due account being taken of the differences in conditions of sale, taxation, transport expenses and any other factor affecting the comparison of prices;
   
   
2. In conditions likely to prejudice the manufacture of similar goods in the Member State.

Article 37
Most Favoured Nation Treatment

1. Member States shall accord one another, in relation to intra-community trade, the most-favoured-nation treatment. In no case shall tariff concessions granted to a third State pursuant to an agreement with a Member State be more favourable than those applicable pursuant of this Treaty.

2. The text of the agreements referred to in paragraph 1 of this Article shall be forwarded by the Member States parties thereto, through the Secretary-General, to all the other Member States for their information.

3. No agreement between a Member State and a third State, under which tariff concessions are granted, shall be incompatible with the obligations arising out of this Treaty.

Article 38
Re-export of Goods and Intra-Community Transit Facilities

1. During the third stage, Member States shall facilitate the re-export of goods among them in accordance with the Protocol concerning the Re-export of Goods.

2. Member States shall grant one another freedom of transit through their territories to goods proceeding to or coming from another Member State in accordance with the Protocol concerning Intra-Community Transit and Transit Facilities and in accordance with the provisions of any Intra-Community Agreements to be concluded.

Article 39
Customs Co-operation and Administration

Member States shall, in accordance with the Protocol concerning Customs Co-operation, take all necessary measures for harmonising and standardising their customs regulations and procedures in such a manner as shall be appropriate for ensuring the effective implementation of the provisions of this Chapter and facilitating the movement of goods and services across their frontiers.

Article 40
Trade Documents and Procedures

For the purpose of facilitating intra-community trade in goods and services, Member States shall simplify and harmonize their trade documents and procedures in accordance with the Protocol the concerning Simplification and Harmonisation of Trade documents and Procedures.

Article 41
Diversion of Trade Arising from Barter or Compensatory Exchange Agreement

1. If, as a result of a barter or compensatory exchange agreement relating to a specific category of goods concluded between a Member State or a person of the said Member Sate, on the one hand, and a third State or person of the said third State, on the other, there is substantial diversion of trade in favour of goods imported under such agreement and to the detriment of similar goods of the same category imported from and manufactured in any other Member State, the Member State importing such goods shall take effective steps to correct the diversion.

2. In order to determine whether a diversion of trade has occurred in a specific category of goods within the meaning of this Article, consideration shall be given to all the relevant trade statistics and other data available on such category of goods for the six-month period preceding a complaint from an affected Member State concerning diversion of trade, and for an average of two comparable six-month periods during the twenty-four (24) months preceding the first importation of goods under the barter agreement or compensatory exchange agreement.

3. The Secretary-General shall refer the matter to the Council for consideration and submission to the Assembly for decision.

Article 42
Trade Promotion

1. In order to attain the objectives of the Community set out in sub-paragraph 2 (m) Article 4 of this Treaty, Member States agree to undertake the trade promotion activities stated below in the following areas:

1. Intra-Community Trade
   
   
   1. Promote the use of the Community's local materials, intermediate goods and inputs, as well as finished products originating within the Community;
      
      
   2. Adopt the "All-Africa Trade Fair of the OAU", as an instrument of the Community trade promotion;
      
      
   3. Participate in the periodic fairs organised under the auspices of the "All-Africa Trade Fair of the OAU", sectoral trade fairs, regional trade fairs and other trade promotion activities of the Community;
      
      
   4. Develop an intra-community trade information network, linking the computerised trade information systems of existing and future regional economic communities and individual Member States of the Community; and
      
      
   5. With the assistance of the Secretariat, study the supply and demand patterns in Member States and disseminate the findings thereon within the Community.
      
      
2. South-South Trade
   
   
   1. Promote the diversification of Africa's markets, and the marketing of Community products;
      
      
   2. Participate in extra-community trade fairs, in particular, within the context of South-South Co-operation; and
      
      
   3. Participate in extra-community trade and investment fora.
      
      
3. North-South Trade
   
   
   1. Promote better terms of trade for African commodities and improve market access for Community products;
   2. Participate as a group in international negotiations within the framework of GATT and UNCTAD and other trade-related negotiating fora.

2. The modalities of organising trade promotion activities and trade information systems of the Community shall be governed by a Protocol concerning Trade Promotion.

Chapter VI
Free Movement of Persons, Rights of Residence and Establishment

Article 43
General Provisions

1. Member States agree to adopt, individually, at bilateral or regional levels, the necessary measures, in order to achieve progressively the free movement of persons, and to ensure the enjoyment of the right of residence and the right of establishment by their nationals within the Community.

2. For this purpose, Member States agree to conclude a Protocol on the Free Movement of Persons, Right of Residence and Right of Establishment.

Chapter VII
Money, Finance and Payments

Article 44
Monetary, Financial and Payment Policies

1. In accordance with the relevant Protocols, Member States shall, within a time-table to be determined by the Assembly, harmonize their monetary, financial and payments policies, in order to boost intra-community trade in goods and services, to further the attainment of objectives of the Community and to enhance monetary and financial co-operation among Member States.

2. To this end, Member States shall:

1. Use their national currencies in the settlement of commercial and financial transactions in order to reduce the use of external currencies in such transactions;
   
   
2. Establish appropriate mechanisms for setting up multilateral payments systems;
   
   
3. Consult regularly among themselves on monetary and financial matters;
   
   
4. Promote the creation of national, regional and sub-regional money markets, through the co-ordinated establishment of stock exchanges and harmonising legal texts regulating existing stock exchanges with a view to making them more effective.
   
   
5. Cooperate in an effective manner in the fields of insurance and banking;
   
   
6. Further the liberalisation of payments and the elimination of payment restrictions, if any, among them and promote the integration of all existing payments and clearing mechanisms among the different regions into an African Clearing and Payments House; and
   
   
7. Establish an African Monetary Union through the harmonisation of regional monetary zones.

Article 45
Movement of Capital

1. Member States shall ensure the free movement of capital within the Community through the elimination of restrictions on the transfer of capital funds between Member States in accordance with a timetable to be determined by the Council.

2. The capital referred to in paragraph 1 of this Article is that of Member States or persons of Member States.

3. The Assembly, having regard to the development objectives of national, regional and continental plans, and upon the recommendation of the Commission and after the approval of the Council acting on the recommendation of the Commission, shall prescribe the conditions for the movement within the Community of the capital funds other than those referred to in paragraph (2) of this Article.

4. For the purpose of regulating the movement of capital between Member States and Third States, the Assembly, upon the approval of the Council, acting on the recommendation of the Commission, shall take steps aimed at co-ordinating progressively the national and regional exchange control policies.

Chapter VIII
Food and Agriculture

Article 46
Agricultural Development and Food Production

1. Member States shall cooperate in the development of agriculture, forestry, livestock and fisheries in order to:

1. Ensure food security;
   
   
2. Increase production and productivity in agriculture, livestock, fisheries and forestry, and improve conditions of work and generate employment opportunities in rural areas;
   
   
3. Enhance agricultural production through processing locally animal and plant products; and
   
   
4. Protect the prices of export commodities on the international market by means of establishing an African Commodity Exchange.

2. To this end, and in order to promote the integration of production structures, Member States shall cooperate in the following fields:

1. The production of agricultural inputs, fertilisers, pesticides, selected seeds, agricultural machinery and equipment and veterinary products;
2. The development of river and lake basins;
3. The development and protection of marine and fishery resources;
4. Plant and animal protection;
5. The harmonisation of agricultural development strategies and policies at regional and Community levels, in particular, in so far as they relate to production, trade and marketing of major agricultural products and inputs; and
6. The harmonisation of food security policies in order to ensure:

1. The reduction of losses in food production;
   
   
2. The strengthening of existing institutions for the management of natural calamities, agricultural diseases and pest control;
   
   
3. The conclusion of agreements on food security at the regional and continental levels;
   
   
4. The provision of food aid to Member States in the event of serious food shortage; and
   
   
5. The protection of regional and continental markets primarily for the benefit of African agricultural products.

Article 47
Protocol on Food and Agriculture

For purposes of this Chapter, Member States shall cooperate in accordance with the provisions of the Protocol on Food and Agriculture.

Chapter IX
Industry, Science, Technology, Energy, Natural Resources and Environment

Article 48
Industry

1. For the purpose of promoting industrial development of Member States and integrating their economies, Member States shall within the Community harmonize their industrialisation policies.

2. In this connection, Member States shall:

1. Strengthen the industrial base of the Community, in order to modernize the priority sectors and foster self-sustained and self-reliant development;
   
   
2. Promote joint industrial development projects at regional and Community levels, as well as the creation of African multinational enterprises in priority industrial sub-sectors likely to contribute to the development of agriculture, transport and communications, natural resources and energy.

Article 49
Industrial Development

In order to create a solid basis for industrialisation and promote collective self-reliance, Member States shall:

1. Ensure the development of the following basic industries essential for collective self-reliance and the modernisation of priority sectors of the economy:
   
   
   1. Food and agro-based industries;
      
      
   2. Building and construction industries;
      
      
   3. Metallurgical industries;
      
      
   4. Mechanical industries;
      
      
   5. Electrical and electronics industries;
      
      
   6. Chemical and petro-chemical industries;
      
      
   7. Forestry industries;
      
      
   8. Energy industries;
      
      
   9. Textile and leather industries;
      
      
   10. Transport and communications industries; and
       
       
   11. Biotechnology industries;
       
       
2. Ensure the promotion of small-scale industries with a view to enhancing the generation of employment opportunities in Member States;
   
   
3. Promote intermediate industries that have strong linkages to the economy in order to increase the local component of industrial output within the Community;
   
   
4. Prepare master plans at regional and Community levels for the establishment of African multinational industries particularly those whose construction cost and volumes of production exceed national financial and absorptive capacities;
   
   
5. Strengthen and establish, where they do not exist, specialised institutions for the financing of African multinational industrial projects;
   
   
6. Facilitate the establishment of African multinational enterprises and encourage and give financial and technical support to African entrepreneurs;
   
   
7. Promote the sale and consumption of strategic industrial products manufactured in Member States;
   
   
8. Promote technical co-operation and the exchange of experience in the field of industrial technology and implement technical training programmes among Member States;
   
   
9. Strengthen the existing multinational institutions, particularly, the African Regional Centre for Technology, the African Regional Centre for Design and Manufacture and the African Industrial Development Fund;
   
   
10. Establish a data and statistical information base to serve industrial development at the regional and continental levels;
    
    
11. Promote South-South and North-South co-operation for the attainment of industrialisation objectives in Africa;
    
    
12. Promote industrial specialisation in order to enhance the complementarity of African economies and expand the intra-Community trade base, due account being taken of national and regional resource endowments; and
    
    
13. Adopt common standards and appropriate quality control systems, which are crucial to industrial co-operation and integration.

Article 50
Protocol on Industry

For the purposes of Articles 48 and 49 of this Treaty, Member States agree to cooperate in accordance with the provisions of the Protocol on Industry.

Article 51
Science and Technology

1. Member States shall:

1. Strengthen scientific and technological capabilities in order to bring about the socio-economic transformation required to improve the quality of life of their population, particularly that of the rural populations;
   
   
2. Ensure the proper application of science and technology to the development of agriculture, transport and communications, industry, health and hygiene, energy, education and manpower and the conservation of the environment;
   
   
3. Reduce their dependence and promote their individual and collective technological self-reliance;
   
   
4. Cooperate in the development, acquisition and dissemination of appropriate technologies; and
   
   
5. Strengthen existing scientific research institutions and, where they do not exist, establish new institutions.

2. In the context of co-operation in this field, Member States shall:

1. Harmonize, at the Community level, their national policies on scientific and technological research with a view to facilitating their integration into the national economic and social development plans;
   
   
2. Coordinate their programmes in applied research, research for development and scientific and technological services;
   
   
3. Harmonize their national technological development plans by placing special emphasis on local technologies as well as their regulations on industrial property and transfer of technology;
   
   
4. Coordinate their positions on all scientific and technical questions forming the subject of international negotiations;
   
   
5. Carry out a permanent exchange of information and documentation and establish community data networks and data banks;
   
   
6. Develop joint programmes for training scientific and technological cadres, including the training and further training of skilled manpower;
   
   
7. Promote exchanges of researchers and specialists among Member States in order to make full use of the technical skills available within the Community; and
   
   
8. Revise the educational systems in order to better educational, scientific and technical training to the specific developmental needs of the African environment.

Article 52
Scientific Research and Technological Programmes

Member States shall take all necessary measures to prepare and implement joint scientific research and technological development programmes.

Article 53
Protocol on Science and Technology

For the purposes of Articles 51 and 52 of this Treaty, Member States agree to cooperate in accordance with the provisions of the Protocol on Science and Technology.

Article 54
Energy and Natural Resources

1. Member States shall coordinate and harmonize their policies and programmes in the field of energy and natural resources.

2. To this end, they shall:

1. Ensure the effective development of the continent's energy and natural resources;
   
   
2. Establish appropriate co-operation mechanisms with a view to ensuring a regular supply of hydrocarbons;
   
   
3. Promote the development of new and renewable energy in the framework of the policy of diversification of sources of energy;
   
   
4. Harmonize their national energy development plans;
   
   
5. Articulate a common energy policy, particularly, in the field of research, exploitation, production and distribution;
   
   
6. Establish an adequate mechanism of concerted action and co-ordination for the collective solution of the energy development problems within the Community, particularly, those relating to energy transmission, the shortage of skilled technicians and financial resources for the implementation of energy projects of Member States; and
   
   
7. Promote the continuous training of skilled manpower.

Article 55
Energy

1. Member States shall cooperate in the following fields:

1. Mineral and water resources;
   
2. Nuclear energy;
   
3. New and renewable energy.

2. They shall further:

1. Seek better knowledge and undertake an assessment of their natural resources potential;
   
   
2. Reduce progressively their dependence on transnational enterprises in the development of such resources, particularly through mastering exploration techniques; and
   
   
3. Improve methods of pricing and marketing raw materials.

Article 56
Natural Resources

In order to promote co-operation in the area of natural resources and energy, Member States shall:

1. Exchange information on the prospection, mapping, production and processing of mineral resources, as well as on the prospection, exploitation and distribution of water resources;
   
   
2. Coordinate their programmes for development and utilisation of mineral and water resources;
   
   
3. Promote vertical and horizontal inter-industrial relationships, which may be established among Member States in the course of developing such resources;
   
   
4. Coordinate their positions in all international negotiations on raw materials;
   
   
5. Develop a system of transfer of know-how and exchange of scientific, technical and economic data in remote sensing among Member States; and
   
   
6. Prepare and implement joint training and further training programmes for cadres in order to develop the human resources and the appropriate local technological capabilities required for the exploration, exploitation and processing of mineral and water resources.

Article 57
Protocol on Energy and Natural Resources

For the purposes of Articles 54, 55 and 56 of this Treaty, Member States shall cooperate in accordance with the provisions of the Protocol on Energy and Natural Resources.

Article 58
Environment

1. Member States undertake to promote a healthy environment. To this end, they shall adopt national, regional and continental policies, strategies and programmes and establish appropriate institutions for the protection and enhancement of the environment.

2. For the purposes of this paragraph 1 of this Article, Member States shall take the necessary measures to accelerate the reform and innovation process leading to ecologically rational, economically sound and socially acceptable development policies and programmes.

Article 59
Control of Hazardous Wastes

Member States undertake, individually and collectively, to take every appropriate step to ban the importation and dumping of hazardous wastes in their respective territories. They further undertake to cooperate in the transboundary movement, management and processing of such wastes produced in Africa.

Article 60
Protocol on the Environment

For the purposes of Articles 58 and 59 of this Treaty, Member States shall cooperate in accordance with the provisions of the Protocol on the Environment.

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