Disadvantages Of African Free Trade Agreement

A controversial topic in the AfCFTA negotiations, as in all negotiations on trade agreements, is the issue of investment conflicts. Many twenty-first century trade agreements contain investor-state dispute settlement (ISDS) provisions. ISDS allows private foreign investors to raise disputes against the states in which they invest when there is a threat to their investment or even a threat to the profitability of the investment. Several states around the world have begun to recognize the loss of sovereignty due to ISDS. Private investors, including TNCs, may challenge a state`s national laws in an international court if those laws pose a threat to the investor`s profit. The most common forum for such disputes is the International Centre for the Settlement of Investment Disputes (ICSID) The International Centre for Resolution of Investment Disputes (ICSID) is an arbitration mechanism of the World Bank to resolve disputes that may arise between states and foreign investors. It was created in 1965, when the Washington Agreement came into force this year. Contrary to some views that argue that the ICSID mechanism has been widely accepted in the American hemisphere, many States in the region are keeping their distance: Canada, Cuba, Mexico and the Dominican Republic are not parties to the Convention. In the case of Mexico, experts believe that this attitude is „wise and rebellious“. We should also recall that the following Caribbean States remain outside the jurisdiction of the ICTY: Antigua and Barbuda, Belize, Dominica (Commonwealth of) and Suriname.

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