Topics publications: African regional integration
Trade Reports
Safeguards and trade remedies in the SADC and ESA Economic Partnership Agreements
This paper discusses the “Trade Defence Instruments” in the Economic Partnership Agreements (EPAs) currently being negotiated between the European Union (EU), on the one hand, and different configurations of ACP (African, Caribbean and Pacific) countries on the other. These “instruments” cover remedies against unfair trade practices (anti-dumping and countervailing measures) as well as safeguards. ACP concerns about infant industry protection, food security and agriculture are also on the agenda.
The use of “contingency measures” has increased generally, inter alia because of the global economic slump. These measures include anti-dumping and countervailing duties imposed by recipients of illegally subsidised exports, as well as safeguards, which are temporary protections that countries can offer to vulnerable domestic industries. The 2009 WTO World Trade Report notes that there are dangers involved in the use of such measures: “The core challenge in the design of these measures is to make them flexible enough to be useful, but not so flexible as to undermine the integrity of an agreement,” said WTO Director-General Pascal Lamy, when he spoke at the launch of the Report in July 2009. “The need for this balance has sometimes been a key issue in negotiations.”
Developing countries are particularly concerned about the availability of safeguards – as demonstrated by the final debates in the Doha Round of negotiations just before those talks broke down in July 2008. The immediate technical problem was the insistence by certain developing nations that a special agricultural safeguard had to be included. For the ACP nations there is an additional challenge: their preferential access to the EU markets came to an end in December 2007 when the WTO waiver for the Cotonou trade chapter expired. They now have to trade with the EU in terms of WTO compatible EPAs unless they decide to rely on the Generalised System of Preferences (GSP) or (for Least Developed Countries (LDCs)) the Everything but Arms (EBA) arrangement.
What do the proposed EPA texts provide for in terms of “trade defence” mechanisms and how should the applicable provisions be implemented? Do they cater for the needs of developing countries? Are they flexible enough? Do developing countries have the technical and institutional capacity to implement these measures? What domestic steps are required in order to invoke safeguards and other protective measures? Will they be given special technical assistance in order to develop the required capacity where it is lacking? How do the proposed EPA measures compare with WTO rules on safeguards and trade remedies?
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.
Books
Monitoring Regional Integration in Southern Africa Yearbook 2008
2008 has been an eventful year for the Southern Africa region. The Southern African Development Community (SADC) launched its Free Trade Area in August. In October at a Tripartite Summit, SADC, the East African Customs Union (EAC), the Common Market for East and Southern Africa (COMESA) announced their intention to create a Free Trade Area encompassing the member states of all three regional economic communities.
Meanwhile the Southern African Customs Union (SACU) has experienced growing internal dissent, largely as a result of two factors. The first is South Africa’s concerns about the revenue-sharing arrangement in terms of which South Africa is making transfers to the smaller member states. Second are the negotiations with the European Union (EU) to conclude an Economic Partnership Agreement (EPA). All SACU member states are included in the SADC EPA group that is negotiating with the EU. South Africa has not yet signed the Interim EPA and has intimated that if the other member states implement the interim agreement, it may withdraw from SACU. This is a credible threat particularly for countries like Lesotho which rely for more than 50 percent of government revenue on the SACU revenue pool, and have very few alternative sources of revenue to tap into.
At a political economy level the Zimbabwe situation is causing growing concern, and the political parties, even at the end of 2008, nowhere near an agreement on a way forward to govern the country. Very important regional issues came to the fore from the Zimbabwe catastrophe. Sustainable regional development is difficult to negotiate when even one member state is in crisis.
The global financial crisis has also impacted on the region in 2008 and more serious impact is still expected. The depth and extent of this crisis and the general economic slowdown (some are already speaking of recession) reflects not only on economic performance as employment, income and other indicators slide, but also in policy stance. Undeniably, countries in the region are becoming more protectionist and this can be expected to impact on the regional integration agenda and specifically on the implementation of the liberalisation agenda. There is also evidence of more reactive policy decisions, as contingency protection increases and policy generally becomes more inward looking. This is not necessarily in the interest of longer-term development.
The 2008 collection of papers reviews the developments in the Southern African region, hoping to stimulate debate about regional integration matters at a time when important decisions for the region’s longer-term future are being taken.
This book was launched on 30 March 2009 at The Aquarium, V&A Waterfront, Cape Town.
Download the pdf Foreword, Contents, Introduction and Authors’ Profiles (323 KB) .
© 2008 Trade Law Centre for Southern Africa, Konrad-Adenauer-Stiftung and Namibian Economic Policy Research Unit
Publication of this book was made possible by the support of the Trade Law Centre for Southern Africa (tralac), the Konrad Adenauer Foundation and the Namibian Economic Policy Research Unit (NEPRU).
Readers are encouraged to quote and reproduce the material contained in these books for educational, non-profit purposes, provided the source is acknowledged. Please contact us to obtain authorisation for reproducing this material.
Trade Reports
A SADC-EU Economic Partnership Agreement – current status and benchmarking of negotiations
At the end of 2007 the WTO waiver with respect to the Lomé/Cotonou-based non-reciprocal trade preferences for African Caribbean and Pacific Group (ACP) countries in the EU market for goods trade expired. The Economic Partnership Agreements (EPAs) that were supposed to replace the preferential regime, with one exception, did not materialise as comprehensive or full agreements. The exception is the Caribbean group, CARIFORUM. Seventeen African states initialled interim EPAs, that is, partial agreements on reciprocal trade in goods that would meet the requirements of General Agreement on Trade and Tariffs (GATT), Article XXIV, complemented by rendezvous clauses that provided for a continuation of negotiations toward full EPAs that would include elements such as trade in services, investment, competition and government procurement.
The SADC EPA group is embroiled in a particularly complicated outcome. South Africa was admitted at a relatively late stage as a full SADC negotiation participant; initially it had observer status. This, however, is an SADC minus group since it initially included only eight SADC member states, namely Botswana, Lesotho, Namibia, Swaziland (BLNS) and South Africa, all members of the Southern African Customs Union (SACU), and Angola, Mozambique and Tanzania. Towards the end of 2007, with the derogation of the WTO waiver approaching, Tanzania opted out of the SADC group and joined the East African Community (EAC) configuration, thus effectively reducing the SADC group to SACU plus Angola and Mozambique. Of the seven countries in the group, Botswana, Lesotho, Swaziland and Mozambique initialled an interim EPA (IEPA) on 23 November 2007, and Namibia with reservations on 12 December 2007. Angola did not submit an offer but has indicated that it will do so in 2008. As noted above, South Africa, the economically dominant member, did not initial the interim agreement and consequently will continue to trade under the TDCA.
This paper does not intend to explain this outcome and to identify the key players and events that brought about this unsatisfactory and incomplete outcome. Instead of indulging in a ‘blame game’ review, the situation is accepted and attention rather focused on, first, the questions of the legal status and consequences of the current situation and, second, the process of benchmarking that can be adopted in negotiating a full EPA. The latter part of the paper in effect summarises the more comprehensive report on benchmarking EPA negotiations that was prepared for the International Centre for Trade and Sustainable Development (ICTSD).
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
Southern Africa and the European Union: the TDCA and SADC EPA
Regional integration is not a new issue in the Southern African region with the Southern African Customs Union (SACU) dating back to 1910. It was only in 2002, however, that steps were taken to ensure that SACU members pursued a more coordinated trade policy approach with regard to third parties. A common external tariff did exist before the 2002 Agreement but the members of SACU had in reality been negotiating bilateral free trade arrangements with other countries with little regard to the concerns of their SACU partners.
One such example is the Trade, Development and Cooperation Agreement (TDCA) concluded between South Africa and the European Union in 1999. The remaining SACU members (Botswana, Lesotho, Namibia and Swaziland – the BLNS) are not party to the TDCA but in effect have been required to adhere to some of the provisions of the Agreement, especially with regards to the tariff concessions offered by South Africa. The BLNS are now themselves in the process of negotiating Economic Partnership Agreements (EPAs) with the European Union. These Agreements are aimed at replacing the preferential access regime set out in the Cotonou Partnership Agreement.
This paper explores the relationship between the members of SACU and the European Union. Background information is provided on SACU, the TDCA and the Southern African Development Community (SADC) EPA negotiations. The final two sections look at the areas of overlap between all these arrangements and specific ways that a convergence could be achieved between the provisions of the TDCA and the SADC EPA.
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.
Books
Monitoring Regional Integration in Southern Africa Yearbook 2007
2007 may perhaps turn out to mark a watershed for regional integration in the southern Africa region. Developments both intra- and extra-regionally have raised the regional integration debate to a new level. Within the region, the substantive focus has been on the achievement of the Southern African Development Community (SADC) customs union. And the Economic Partnership Agreement (EPA) negotiations have dominated the extra-regional agenda.
Southern Africa remains committed to the linear textbook model of regional integration. SADC adheres politically to an agenda that extends well beyond the target of achieving the free trade area that SADC member states are legally bound to in the SADC Trade Protocol. The Regional Indicative Strategic Development Plan of 2003 is not a legally binding agreement, but enjoys political legitimacy. This strategic plan plots an integration agenda that includes the target of a free trade area by 2008, a customs union by 2010, and further integration towards a common market, monetary union and political union.
At the Lusaka Summit in August 2007, the target date for the achievement of a free trade area was set for August 2008, buying some extra months to achieve intra-regional trade liberalisation which is at this stage lagging well behind target. The most important discussion on regional integration this year focused on the establishment of a customs union by 2010. A study commissioned by the SADC Secretariat examined specifically how a customs union could be implemented. It notably did not examine the rationale for the achievement of a customs union.
Dominating the extra-regional agenda have been the negotiations with the European Union to conclude Economic Partnership Agreements. All the member states of the Southern African Customs Union (SACU), Mozambique, Angola and Tanzania formed the SADC EPA configuration. Tanzania, very close to the eleventh hour of the negotiations to beat the expiry of the World Trade Organisation (WTO) waiver applicable to the trade chapter of the Cotonou Agreement, left this configuration to join its East African Customs Union (EAC) partners to conclude the signing of an EPA with the European Union. All other members of the SADC group except South Africa and Angola signed the EPA before the end of December 2007. Angola has indicated that it will accede to the EPA and South Africa has still to indicate what it will be doing.
The collection of papers in this volume examines in a multidisciplinary manner the complex processes and developments related to regional integration in Southern Africa in 2007. An important contribution is perhaps not the answers provided to important challenges currently being negotiated but the questions that aim to stimulate productive debate on the future of regional integration in southern Africa.
© 2007 Trade Law Centre for Southern Africa, Konrad-Adenauer-Stiftung and the Namibian Economic Policy Research Unit
Publication of this book was made possible by the support of the Trade Law Centre for Southern Africa (tralac), the Konrad Adenauer Foundation and the Namibian Economic Policy Research Unit (NEPRU). The views expressed by the authors are not necessarily the view of any of these institutions.
Readers are encouraged to quote and reproduce the material contained in these publications for educational, non-profit purposes, provided the source is acknowledged. Please contact us to obtain authorisation for reproducing this material.
Trade Reports
Benchmarking EPA negotiations between EU and SADC
This Working Paper starts by summarising the status of SADC-EU EPA negotiations and sketches the legal and institutional outline underlying these negotiations. Subsequent to this, a framework that explains the links between trade and development is presented. This provides the rationale for the selection of benchmarks that can be used in monitoring and assessing progress with the SADC-EU EPA negotiations and the subsequent implementation of an EPA. The premise of the study is that an EPA is not only a trade liberalisation exercise; the development of the ACP countries and their gradual and smooth insertion into the global economy are fundamental parts of the agreements to be concluded.
The SADC EPA group presents negotiators with particular challenges. South Africa has now been included in the configuration, which presents specific negotiating problems. Firstly, South Africa has a reciprocal trade agreement, the TDCA, with the EU in place, and secondly, adding South Africa to the SADC configuration has compounded the diversity of the group. Within the SADC group the economic inequality resembles that which exists between the EU and the SADC group.
The introduction of development into the EPA equation requires a sign posted roadmap of the progress made in the negotiation and implementation of the Agreement. These signposts can be seen as preconceived benchmarks that can guide negotiations and implementation and can serve as a means of monitoring progress. Benchmarking, as mechanism, is derived from the discipline of strategic management to evaluate the performance of firms against best practice outcomes, and can serve the useful purpose of evaluating EPA negotiations and implementation.
The study proposes a number of benchmarks that can be used. It must readily be admitted that it will be difficult to apply them to a negotiation process, which is dynamic and susceptible to short term changes. Nevertheless, an analytical framework is used to dissect economic development into components: the outcome of development, the supply side of economic growth, that is, the capacity to produce tradable products, the demand side, which considers the absorption of the larger output by demand, and finally, the policy spaces that governments have to implement national development policies. The premise adopted is that there is a close link between economic growth and poverty alleviation and that trade is an important element in the growth and development process. Growth, however, is seen as a necessary condition for poverty alleviation and can only succeed in bringing about a widespread improvement in the welfare of society if the quality of growth is such that the benefits of growth are distributed among the population at large.
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.
Books
Monitoring Regional Integration in Southern Africa Yearbook 2006
Regional Integration in general is considered as an important theoretical paradigm for and successful practical instrument of economic growth and development. Particularly in Southern Africa with its comparatively small economies, regional integration can play a crucial role in the pursuit of common strategic interests for the successful economic development of the involved countries.
Regional Integration, however, requires political will, the understanding of politicians of the necessity to pass relevant national legislation and the decision to implement respective strategies. The political discourse will naturally deliberate on the expectations for economic growth and the consequences of partly renouncing national sovereignty. The dynamics of such national discourses and the political will to regional integration are unpredictable with repercussions for the course of and striving for regional integration.
In addition, the discourse on regional integration is no end in itself, but a means to an end. In the centre of all attention on regional integration must be the human being, the living standards of people and their social cohesion. The subject, however, will not primarily be the citizen of a particular nation but the people of the whole region.
Hence regional integration emerges as a multilayered challenge for experts, politicians and finally to the people involved in a region. They must all be informed about the ongoing process, and must be involved in the deliberations and in the decision-making processes.
The European Union, now comprising 27 vastly different (not only economically) member states, is proof that the efforts of investing in regional integration pay dividends, economically, socially, and politically.
This book was launched on 26 February 2007. Read the speech by the Honourable Member of Parliament and Chair of the Portfolio Committee on Trade and Industry, Benedict Martins.
© 2006 Trade Law Centre, Konrad-Adenauer-Stiftung and the Namibian Economic Policy Research Unit
Publication of this book was made possible by the support of the Trade Law Centre for Southern Africa (tralac), the Konrad Adenauer Foundation and the Namibian Economic Policy Research Unit (NEPRU). The views expressed by the authors are not necessarily the view of any of these institutions.
Readers are encouraged to quote and reproduce the material contained in these books for educational, non-profit purposes, provided the source is acknowledged. Please contact us to obtain authorisation for reproducing this material.
Trade Reports
Initiation of WTO Trade Disputes by the private sector by SADC/COMESA countries
WTO dispute settlement is inter-governmental in nature since the rules and procedures apply to the settlement of disputes between Members concerning their rights and obligations under the provisions of the WTO Agreement. Only the Members of the WTO are party to the covered agreements and are the primary bearers of the rights and obligations in those agreements. Non-State actors cannot access the dispute settlement mechanism directly, and must go through Member States. In that sense, each WTO Member necessarily acts as a filter of disputes involving its traders and other parties.
However, it would be entirely wrong to consider that the position of individuals is of no relevance to the GATT/WTO legal matrix. Many of the benefits to Members, which are meant to flow as a result of the acceptance of various disciplines under the GATT/WTO, depend on the activity of individual economic operators in the national and global marketplaces. The purpose of many of these disciplines, indeed one of the primary objects of the GATT/WTO as a whole, is to produce certain market conditions which would allow this individual activity to flourish. So although the WTO dispute settlement system is inter-governmental in nature, it remains true that the real players are the individual operators.
This paper draws lessons from the practice in the EU, the US and Australia, and seeks to find ways in which SADC and COMESA countries could put in place effective national systems in terms of which their economic operators can petition their governments to institute dispute settlement proceedings on their behalf when necessary.
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.
Books
Monitoring Regional Integration in Southern Africa Yearbook 2005
Regional integration is generally accepted as an important step towards a wider global involvement. This is particularly true in Southern Africa, where we can find many countries with rather small economies. This has been realized very early: SACU, SADC and COMESA can be considered as vehicles for integration both economically and probably also politically. The European example has shown that integration can work, both economically and politically. Even if the countries participating have very different economic and political histories and backgrounds.
Today there are many studies and publications about regional integration, looking at various aspects of economic, social and political integration. The rationale of the “Monitoring Regional Integration Yearbook” is not so much to reflect the present status of integration, but rather to portray the development of the process of integration in the region. This process is complex and progress can only be demonstrated if there is an ongoing analysis available. The objective of the yearbook is to provide facts, opinions and suggestions and to analyse the progress.
This book, the fifth yearbook (for 2005), is based on the contributions to the 8th Workshop on Monitoring the Process of Regional Integration in SADC, held in Windhoek on 11-12 June 2005. The book has 12 chapters that address economic, political and institutional issues, and a conclusion drawing together the threads of the contributions.
The articles on the economic dimension of integration analyse foreign direct investment (FDI) in SADC, the rules of origin and regional integration, and report on the experiences of South African firms doing business in the region.
© 2005 Namibian Economic Policy Research Unit and the Konrad-Adenauer-Stiftung
Publication of this book was made possible by the support of the Namibian Economic Policy Research Unit (NEPRU) and the Konrad Adenauer Foundation. The views expressed by the authors are not necessarily the view of any of these institutions.
Readers are encouraged to quote and reproduce the material contained in these books for educational, non-profit purposes, provided the source is acknowledged. Please contact us to obtain authorisation for reproducing this material.