Topics publications: African regional integration
Trade Briefs
SADC Simplified Trade Regime: Tracing developments and implementation progress
The central objectives of Southern African Development Community (SADC) include economic development and growth, poverty alleviation, enhancement of the standard and quality of life of the peoples of Southern Africa, as well as supporting the socially disadvantaged through regional integration. To achieve these goals, SADC Member States have adopted a comprehensive agenda with Protocols that cover a broad range of areas of cooperation and integration.
The Southern African Development Community’s (SADC) trade agenda plays an important role in supporting the achievement of SADC’s broader milestones of economic development and poverty eradication for all (small scale and informal cross-border traders included). This agenda focuses on the liberalisation of trade in goods and trade in services, and includes a simplified trade regime (STR) under the SADC Trade Facilitation Programme 2020-2030. When properly implemented, the STR presents a number of economic advantages and trade facilitation-related benefits: it provides accessible information on trade with other Member States of the SADC Free Trade Area (FTA), reduced clearance costs at the borders, elimination of delays in the clearing of products through the use of simplified certificates of origin and simplified customs documents, readily available assistance from the technical information desk officers, and dedicated lanes for immigration and customs clearance, among others.
Despite the scant official information available on the proposed SADC STR and lack of updates particularly in the public domain, this Trade Brief takes a look at some of the key developments and implementation progress of the STR by SADC.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Reports
The United States anti-dumping investigation against lemon juice from South Africa: what happened, and where to now?
On 30 December 2021, a California-based producer of lemon juice and other related products (Ventura Coastal LLC) petitioned the U.S. Department of Commerce and U.S. International Trade Commission (USITC), alleging that producers in South Africa and Brazil were selling lemon juice to U.S. importers at less than fair value (LTFV). The petition requested that punitive anti-dumping duties be levied on imports into the U.S. of such products sourced from (the named) businesses in South Africa and Brazil.
The preliminary investigation undertaken by U.S. authorities has not had a favourable outcome from the perspective of South African (and Brazilian) lemon juice exporters, since it was unable to find compelling evidence that would have resulted in a termination of the investigation. The petition to launch the investigation had earlier been found to be legally sufficient and representative of the local lemon juice industry. The U.S. Department of Commerce expects to complete its preliminary investigation and announce its findings by the end of July 2022. An adverse finding would, from that point onwards, compel U.S. importers to lodge cash deposits or guarantees equivalent to the preliminary dumping margin, pending the completion of the investigations, public hearings and briefs from interested parties.
The investigation will create a significant amount of uncertainty for producers, exporters and importers (and industrial consumers in the U.S.), and it can reasonably be expected that this uncertainty will already be having an impact. Businesses can ill afford a potential dumping margin of 100% or more, and importers may shy away from trade in subject goods or incorporate a defensive strategy into any contracting to minimise the potential impact of anti-dumping duties. The uncertainty and resulting financial and trade impact is unavoidable, irrespective of the merits of the case, especially since the preliminary investigation resulted in a continuation of the investigation against certain imports from both named countries.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Briefs
Entry into force of the SADC Protocol on Trade in Services: What Does it Mean for Road Transport in the region?
The road transport landscape in Southern African Development Community (SADC) is shaped by a combination of the SADC Protocol on Transport, Communications and Meteorology (SADC PTCM), bilateral road transport agreements, corridor-based memoranda of understanding (MoU) and respective member states’ road transport policies, regulations and technical standards. The SADC PTCM provides the regional road transport policy and regulatory framework, framework for facilitation of cross-border road transport, institutional arrangements, infrastructure development, integration and harmonisation, amongst others.
The entry into force of the SADC Protocol on Trade in Services in January 2022 could mark the beginning of a new era regarding improving intra-regional trade in services in the road transport sector. It is expected that the Protocol on Trade in services will provide impetus towards addressing challenges limiting intra-regional services trade in the road transport sector.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Reports
Gender Provisions in African Trade Agreements: What Commitments Are There For Reconciling Gender Equality and Trade?
The trade agreements concluded by African countries stand out in many respects in terms of addressing gender issues. Specific provisions on gender have been integrated in African trade agreements since 1983, the first being the Treaty Establishing the Economic Community of Central African States (ECCAS). Since then, most economic integration agreements have included gender provisions – with some having an entire chapter devoted to women’s economic rights. African states have also concluded several trade agreements with the European Union (EU) or the United Kingdom (UK) with explicit gender provisions. Building on this practice, 54 African states have agreed to place gender equality at the heart of the objective of the largest free trade area ever created – the African Continental Free Trade Area (AfCFTA), reinforcing the premise that African trade needs the full participation of women to succeed.
An empirical research based on 62 African trade agreements reveals 58 gender-related provisions in 23 different trade agreements concluded by at least one African state. The content of these provisions ranges from a mere mention of gender issues in areas of cooperation to mandatory measures to support women’s empowerment, with monitoring mechanisms ensuring their full implementation. From this assessment, one can infer that the commitments to reconcile gender equality and African trade differ from one African trade agreement to another.
This Trade Report examines the extent to which African states are committed to supporting women’s empowerment and promoting gender equality in trade agreements. Five levels of commitment are identified based on the location, the degree of precision, and the bindingness of the gender-related provisions included in trade agreements concluded by African states. This research concludes that about a third of the gender provisions reviewed indicate a relatively high degree of commitment to supporting women’s empowerment through trade liberalisation, and more often, state parties limit their commitment to cooperation without enforceability. This Trade Report also highlights a trend in which agreements of regional economic communities (RECs) tend to be more gender-responsive than agreements concluded with parties outside the African continent. In conclusion, it provides indicators to draft provisions aimed at effectively supporting women’s economic empowerment and ensure that women are not left behind in the trade liberalisation process in Africa.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Briefs
South Africa Trade Update 2021
South Africa’s latest trade policy formulation retains the clear connection between trade and industrial policy, noting that that trade policy instruments such as the import tariff are used selectively to support industrialisation objectives. South Africa is a member of the World Trade Organisation (WTO) at the multilateral level; however, regional integration is an integral part of South Africa’s trade strategy.
This trade update focuses on South Africa’s trading relationship with select regional zones, regional economic communities (RECs) and select countries. More specifically, the brief will focus on South Africa’s trade with Africa, the European Union (EU), the BRICS (Brazil, Russia, India, and China) countries, the United States (US) and the United Kingdom (UK). The review period is for the full year – 2021.
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Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Reports
African Economic Integration through the AfCFTA
Regional integration makes sense in and for Africa. Most African nations are developing countries with small domestic markets. Many are land locked. Growth through economic integration has been on the African agenda for decades but the expected results have not always materialised. Only about 16% of the goods produced in Africa are destined for African markets. Will this picture change under the African Continental Free Trade Area (AfCFTA)?
The AfCFTA has been launched with the expectation that it will boost intra-African trade and industrialisation. For this to happen there needs to be better trade governance and large-scale investments in infrastructural development and regional value chains. African Governments, the AfCFTA Secretariat and several development supporting agencies have announced ambitious plans to make this possible. This paper discusses a related aspect; the AfCFTA’s economic integration strategy in terms of which these initiatives must unfold.
Economic integration occurs when countries conclude treaties offering preferential access to each other’s markets. These arrangements are anchored in legal instruments which provide for trade related obligations to be implemented and for procedures to be followed by the member states. As integration deepens, further adjustments need to be made. The necessary institutions, additional obligations and governance measures must be added. Adherence to community law may follow.
With the arrival of the AfCFTA economic integration in Africa is potentially on a new track. This paper discusses the legal and institutional implications of this process and the consequences for the Regional Economic Communities (RECs). Those of them that have formed FTAs are also the building blocks of the AfCFTA. African integration is often inspired by ambitions to foster solidarity and establish continent-wide political structures. This generates a different momentum. The achievement of long-term political unity will not be discussed.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Briefs
Does the AfCFTA provide for a new Approach to Regional Integration in Africa?
Regional integration makes sense for Africa. Most African nations are developing countries with small domestic markets. Many are landlocked. Growth through economic integration has been on the African agenda for decades but the expected results have not always materialised. Only about 16% of the goods produced in Africa are destined for African markets. Will this picture change under the African Continental Free Trade Area (AfCFTA)?
The AfCFTA has been launched with the expectation that it will boost intra-African trade and industrialisation. For this to happen there needs to be better trade governance and large-scale investments in infrastructural development and regional value chains. This Trade Brief discusses the AfCFTA’s economic integration strategy in terms of which these initiatives must unfold.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Briefs
Trade Remedies and Safeguards: Important for States and Private Parties
Part 4 of the AfCFTA Protocol on Trade in Goods contains several provisions on trade remedies and safeguards. Article 17 states that the State Parties may apply anti-dumping and countervailing measures, guided by the provisions of Annex 9 on Trade Remedies and the applicable AfCFTA Guidelines, and “in accordance with relevant WTO Agreements”. Global Safeguard Measures are also permissible. Article 19 of the Protocol allows for Preferential Safeguards in respect of trade in goods under the AfCFTA.
The implementation of trade remedies and safeguards as part of the AfCFTA Protocol on Trade in Goods will have important trade governance consequences and benefits. It will enhance the rules-based administration of trade in goods under the AfCFTA and in other trade agreements to which African States belong, including the Regional Economic Communities (RECs) and the WTO.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Briefs
Will Trade Remedies be used as part of Trade Governance under the AfCFTA?
Very few African States are active users of trade remedies and safeguards as part of their trade governance and trade policy implementation. Only four African countries – Egypt, Morocco, South Africa, and Tunisia – have properly designed domestic trade remedy and safeguard arrangements and regularly use these measures to defend their domestic producers. They are also the more industrialised African countries; trade remedies are part of their trade governance toolkit. They use these measures primarily in the global trade context, not in respect of intra-African trade.
Does this mean that trade remedies and safeguards are not essential for countries in Africa with low levels of industrialisation? What will these countries do as they become more industrialised, which is one of the requirements for achieving the ambitions behind the African Continental Free Trade Area (AfCFTA) Agreement? And how will the State Parties protect sectors such as agriculture and services providers? How is trade policy made and executed in these countries?
This Trade Brief argues that trade remedies and safeguards are important trade governance tools for African States; for better domestic and regional integration policies and for achieving the goals of the AfCFTA Agreement.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Briefs
The AfCFTA Trade Remedy Regime can enhance rules-based Trade Governance
Since only a small number of African States are active users of trade remedies and safeguards, the implementation of the African Continental Free Trade Area (AfCFTA) Agreement’s trade remedies and safeguards regime, modelled on World Trade Organisation (WTO) principles and procedures, could bring about an important trade governance development. Should the AfCFTA State Parties become users of trade remedies and safeguards, disputes about how investigations are conducted, and the relevant measures are implemented, can be expected. This will involve domestic judicial review procedures as well as disputes between AfCFTA State Parties trading under AfCFTA preferences. The Dispute Settlement Mechanism of the AfCFTA Disputes has jurisdiction over disputes between the State Parties.
The AfCFTA’s provisions on trade remedies and safeguards appear in three instruments: the Protocol on Trade in Goods, Annex 9 to this Protocol (“Trade Remedies”) and the “Guidelines on Implementation of Trade Remedies”. These Guidelines must still be finalised.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.