Mauritius And The AfCFTA: The Digital Trade Protocol Part II

This article is the final of two analysing the AfCFTA Protocol on Digital Trade (hereafter referred to as the Protocol) and its implications for trade between Mauritius and Africa. As highlighted in Part I,¹ the Protocol aims to advance the African Continental Free Trade Agreement's (AfCFTA) objectives by establishing harmonised rules, common principles and standards that facilitate and promote digital trade to foster sustainable and inclusive socio-economic growth and drive the Continent's digital economy. This second article focuses on those provisions of the Protocol related to Business and Consumer Trust, Digital Trade Inclusion, Emerging Technologies and Innovation, Institutional Arrangements and Transparency and provides a comprehensive overview of how these provisions will shape and promote digital trade across the African continent.

Business and Consumer Trust

As a mechanism to protect the business' know-how and reinforce the national business environment, Article 24(1) of the Protocol stipulates that AfCFTA Contracting Parties cannot require a physical or juridical person from another AfCFTA Party to provide or grant access to their software's source code as a condition for importing, distributing, selling or using that software or any products containing that software within their territory. There is an exception to the above general rule, in which regulatory bodies or judicial authorities in a State Party may require, subject to the relevant safeguards to avoid unauthorised disclosure to third parties, access to source code of software or algorithm for investigations, inspections, examinations, audits, enforcement actions, judicial proceedings or when required for legitimate public interest reasons. Article 24(1) does not apply to voluntary transfer or provision of access to the source code such as in the case of open-source coding or through a commercial contract.

The Protocol also requires all AfCFTA Parties to adopt and/or maintain measures that ensure cybersecurity and combat cybercrime within their territory. These measures, as highlighted in the Protocol's Article 25(1), shall take into account regional, continental, and international standards. Furthermore, AfCFTA Contracting Parties have committed to strengthening their national cybersecurity environment, requiring enterprises within their territories to use best practices for identifying and protecting against cybersecurity risks, as well as detecting, responding to and recovering from cybersecurity incidents.

AfCFTA Parties have also taken steps to protect access to internet. Article 26 of the Protocol stipulates that Member States have to take steps to ensure that consumers within their territories are able to:

1. access and use applications and internet services of their choice, subject to reasonable, transparent, and non-discriminatory network management;
2. connect any devices they choose to the internet, as long as these devices do not harm the network;
3. access information about the network management practices used by internet service providers in the Member States.

In an effort to protect their citizens from unlawful practices, the AfCFTA Contracting Parties agreed to adopt national measures to enhance online consumer protection. Specifically, Article 27 of the Protocol requires AfCFTA Contracting Parties to adopt and/or maintain consumer protection laws or regulations to prevent misleading, fraudulent, and deceptive commercial practices that harm or could harm consumers in digital trade. This includes:

1. making false claims about the material qualities, prices, suitability for purpose, quantity, or origin of goods or services;
2. advertising goods or services without intending to supply them;
3. failing to deliver products or services after consumers have paid;
4. charging consumers' accounts without authorisation.

Furthermore, to the extent possible, digital trade consumers are to be provided with protection equivalent to that provided for other types of trade under the Member State's laws or regulations, - i.e. consumers of digital content, digital products, digitally delivered services, etc. are to have the same guarantees regarding the safety of such products as they have in physically delivered goods and services. As such, AfCFTA Contracting Parties must also ensure that digital trade consumers are provided with the right to return and refund, including the right to return unsafe, defective, or unsuitable products and the right to request for a full refund or replacement of the products within a reasonable timeframe. Contracting Parties must also collaborate on consumer protection in digital trade, including enforcing consumer protection laws through national agencies or other relevant bodies and by exchanging consumer complaints and enforcement information. Additionally, Contracting Parties are required to work together to create effective cross-border redress mechanisms for consumers engaged in digital trade.

The Protocol also requires that Contracting Parties adopt or maintain measures to regulate unsolicited commercial electronic communications (spam) that:

1. require recipients' consent to receive such communications;
2. ensure suppliers of unsolicited communications provide recipients the ability to periodically review permissions and opt out of receiving further messages;
3. minimise unsolicited electronic communications.

Contracting Parties are required to offer legal recourse against suppliers who do not comply with these measures.

Regarding online safety and security, Contracting Parties agreed to promote a safe and secure environment that promotes digital trade. In this context, a future Annex on Online Safety and Security will be developed.

Digital Trade Inclusion

The promotion and inclusion of women, youth, indigenous peoples, rural and local communities, persons with disabilities, and other underrepresented groups in digital trade is one of the objectives of the Protocol. Specific measures agreed to by the AfCFTA Contracting Parties in the Protocol's Article 30 include:

1. promotion of access to information and communications technologies;
2. enhancement of cross-border connectivity and interoperability;
3. provision of internet that is accessible, affordable, safe, and reliable;
4. sharing of experiences and best practices, including exchanging experts, regarding digital inclusion;
5. identification and elimination of barriers to accessing digital trade opportunities;
6. sharing of methods and procedures for developing datasets and analysing participation in digital trade;
7. engagement in regional and multilateral forums to promote digital inclusion; and
8. enhancing digital skills, digital literacy, and access to online business tools.

In addition, Article 31 of the Protocol further mandates that AfCFTA Contracting Parties must encourage and support the participation of Micro, Small and Medium-Sized Enterprises (MSMEs) in digital trade through measures such as:

1. exchanging information and best practices to enhance MSMEs' capabilities and participation in digital trade;
2. encouraging MSMEs' participation in online platforms and other mechanisms that facilitate connections with regional and international suppliers, buyers, and other business partners;
3. promoting the granting of credit, loans or grants or preferential financing for MSMEs in digital trade;
4. providing assistance to MSMEs for the adoption, adaptation and use of technologies and;
5. facilitating MSMEs' access to logistics and supply chain facilities to engage in digital trade among others.

Article 32 also stipulates that Contracting Parties must promote:

1. policy, legal and institutional frameworks that support digital innovation and entrepreneurship;
2. the setting up of national and regional digital innovation and entrepreneurship hubs;
3. access to finance and other funding mechanisms for digital innovators and enterprises;
4. public and private sector partnerships and collaboration to support digital innovation and entrepreneurship.

With regard to digital skills development, Article 33 requires Contracting Parties to:

1. support the integration and advancement of digital skills policies within their national development frameworks;
2. support the establishment of national and regional centres dedicated to digital skills development;
3. promote diversity and inclusivity in digital skills development initiatives and policies, including through programs specifically for MSMEs and start-ups;
4. encourage multi-stakeholder partnerships in the development of digital skills.

Emerging Technologies and Innovation

AfCFTA Contracting Parties, recognising the importance of supporting the adoption and regulation of emerging and advanced technologies, in accordance with their legitimate public policy interests and important security concerns, agreed, whenever relevant, to establish the appropriate governance structures to preserve the ethical, trusted, safe and responsible use of emerging and advanced technologies (see Article 34 of the Protocol). In this regard, Contracting Parties will develop a future Annex on Emerging and Advanced Technologies.

Regarding Financial Technology, Article 35 mandates that Contracting Parties shall:

1. foster strong collaboration between their Financial Technology enterprises and industry agencies, following their respective laws and regulations;
2. encourage their Financial Technology enterprises to leverage resources and support available in other Member States' territories to pursue new business prospects;
3. work together to enrich opportunities for African Financial Technology enterprises;
4. champion the advancement of Financial Technology solutions for business and financial sectors;
5. adopt relevant regional, continental, and international standards for Financial Technology.

A future Annex on Financial Technology will also be developed by Contracting Parties.

Article 36 on Information and Communication Technology (ICT) stipulates that Contracting Parties shall:

1. remove tariffs and non-tariff barriers to trade in ICT goods as per the Protocol on Trade in Goods;
2. foster the liberalisation of trade in ICT services as stipulated in the Protocol on Trade in Services;
3. promote and facilitate investments in the ICT sector and facilitate the cross-border transfer of technology, skills, and expertise as per the Protocol on Investment;
4. advocate for the establishment of a regulatory framework concerning competition in the ICT sector in line with the Protocol on Competition Policy; and
5. promote innovation within the ICT industry in accordance with the Protocol on Intellectual Property Rights.

Institutional Arrangements

With the objective to govern, monitor and facilitate the enactment and advance the goals of the Protocol, AfCFTA Contracting Parties formed the Committee on Digital Trade. The Committee will consist of designated representatives from Contracting Parties. With the endorsement of the Council of Ministers, the Committee may establish sub-committees and working groups as necessary for its effective functioning.

Transparency

To reduce the business uncertainty surrounding trade in digital and digitally-enabled goods and services, Article 38 requires Contracting Parties to expeditiously publish or make publicly available, including through electronic means, its laws, regulations, policies, procedures, trade documents, internal fees, charges, taxes, and administrative rulings applicable to digital trade or related matters covered by the Protocol. Furthermore, AfCFTA Contracting Parties must also promptly publish or make publicly available, including through electronic means, any international, regional, or bilateral agreements it has signed concerning digital trade or related matters covered by the DTP.

Regarding Open Government Information, Article 39 stipulates that AfCFTA Contracting Parties must, to the extent possible, ensure that government information is published or made accessible in a machine-readable format that allows for searching, retrieval, use, reuse, redistribution, and is regularly updated.

Article 40 on Notification mandates that an AfCFTA Contracting Party promptly inform other AfCFTA Contracting Parties, through the AfCFTA Secretariat, of any international, regional, or bilateral agreements relevant to digital trade with other State Parties, as well as any new laws, regulations, amendments, or measures that pertain to or impact the implementation of the DTP.

AfCFTA Contracting Parties are also required to promptly reply, through the AfCFTA Secretariat, to any requests from another Contracting Party for specific information regarding new laws, regulations, amendments, or measures that pertain to or affect the operation of the Protocol. The Secretariat has the responsibility of disseminating to the relevant Contracting Parties any notifications, requests or information provided under Article 40. It is specified that any notification or information provided pursuant to Article 40 is without prejudice as to whether a State Party's law, regulation, amendment, or measure is consistent with the DTP.

Additionally, Contracting Parties are required to inform the Secretariat of their National Focal Points on Digital Trade. It is also specified that the Committee on Digital Trade, with assistance from the AfCFTA Secretariat, will develop the procedures for notification.

Any disputes regarding the interpretation or application of the Protocol shall be resolved according to the Protocol on Rules and Procedures on the Settlement of Disputes. For detailed information on the Protocol on Rules and Procedures on the Settlement of Disputes, the following articles can be consulted: (i) Mauritius and the AfCFTA Part 3: Dispute Settlement and (ii) Mauritius and the AfCFTA Part 4: The Appeals Process in Dispute Settlement.

The Protocol on Digital Trade addresses various aspects that are crucial for fostering trust, amidst global transformation in digital services, particularly with the advent of emerging technologies such as artificial intelligence and blockchain. Regulatory and commercial interoperability between the different African markets is a welcome development for businesses as it leads to increased market access whilst also reducing transaction and compliance costs. It is crucial for Mauritian businesses to strategically position themselves to fully leverage the advantages offered by the DTP. By aligning with the new standards and integrating with the African digital economy, Mauritian companies can enhance their competitiveness and drive innovation in the region.

International Economics Consulting Ltd (IEC) is an independent consultancy firm working with national and international development partners, governments, and the private sector to create value and promote sustainable growth and development. With extensive experience in trade policy, research, and negotiations, IEC can support governments and businesses deal with unfair trade practices and unforeseen consequences of free trade by providing analytical expertise and support.

Footnote

1. Baker, P., Quiles, P. & Bheenick, S. (2024). Mauritius and the AfCFTA: The Digital Trade Protocol Part I. Mondaq. June 4. Available from: https://www.mondaq.com/international-trade--investment/1465142/mauritius-and-the-afcfta-the-digital-trade-protocol-part-i

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.