William Mwanza, tralac Researcher, discusses the decision to create a second bloc of Regional Economic Communities (RECs) in Africa

At the 18th African Union (AU) Summit held in Addis Ababa, Ethiopia, in January, 2012, African Heads of State and Government adopted two decisions to take forward the regional integration process in Africa. The first was a ‘Decision on African integration’ (Assembly/AU/Dec.392(XVIII)), which invited the Economic Community of West African States (ECOWAS), the Economic Community of Central African States (ECCAS), the Community of Sahel-Saharan States (CEN-SAD), and the Arab Maghreb Union (AMU) to emulate the tripartite framework between the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC), and the Southern African Development Community (SADC), and create a “second pole of integration”. The second was a ‘Decision on boosting intra-African trade and fast tracking the Continental Free Trade Area [CFTA]’ (Assembly/AU/Dec.394(XVIII)), which endorsed the establishment of the CFTA, setting an indicative target date of 2017. These are seen as important steps in expediting the formation of the African Economic Community (AEC), which itself is provided for by the Abuja Treaty of 1990.

In line with these decisions, member States of ECOWAS, ECCAS, and CEN-SAD have commenced efforts towards the creation of this second bloc of integration. Earlier this year, the first consultation meeting on the initiative was held during the 6th session of the Conference of African Ministers responsible for Integration (COMAI VI) in Mauritius, from 15 to 19 April, 2013. An action plan was agreed upon at the conclusion of that meeting, which included inter alia that:

• A concept note would be developed, which would include the sectoral fields that the second bloc will focus on, namely “infrastructure, industrialisation, trade liberalisation, free movement [of factors of production] and peace and security”; the legal framework for the bloc (in the form of a Memorandum of Understanding); and designated tasks and respective timelines;

• A study tour would be organised to one of the Tripartite Implementation Units;

• A series of negotiation meetings amongst the four RECs would be held; and

• Statistical data on the identified sectors would be gathered and statistical capacity of the respective RECs would be strengthened.

Pursuant to this action plan, the first negotiation meeting for the creation of a second bloc of Regional Economic Communities (RECs) is scheduled to be held in Johannesburg, South Africa, from 7 to 8 December, 2013. As this process continues to gather speed there are a few issues that are pertinent to continental integration efforts that are worth highlighting.

Most importantly, the stepwise approach of creating the second bloc of RECs while drawing inspiration from the tripartite framework can be seen as beneficial albeit with the need for critical consideration on some fundamental issues in the process.

The benefits of this approach can mainly be seen in the areas of sectoral focus. The tripartite framework currently focuses on three important areas, namely market integration, infrastructural development and industrial development. This holistic approach has largely made its way into thinking towards creation of the second bloc, as is evident from the areas of focus envisaged at this point, with the only caveat being the need to also expand ‘trade liberalisation’ to ‘market integration’ so that non-tariff issues are also covered in the negotiations. What is also interesting to note is that not only has the second bloc adapted its focus areas to those of the tripartite framework, but it has also extended these to include peace and security and free movement [of factors of production]. These latter two areas suggest an approach that also focuses more on political aspects and prerequisites of effective integration (as in the case of peace and security); and the possibility of implementing features of “higher” levels of integration such as those of a common market without necessarily following a linear model of integration (as in the case of free movement of factors of production). They suggest a new model of integration that could also be pursued within the tripartite framework, and across the continent.

There are however some important issues that will need to be considered as the second bloc seeks to draw lessons from the tripartite framework in the specific focus areas. One crucial issue is on tariff liberalisation towards consolidation of its own free trade area (FTA). It will be noted that it was initially envisaged that the tripartite free trade area (TFTA) would comprise of a single ‘grand FTA’ among the 26 (now 27 with the inclusion of South Sudan) countries of COMESA, EAC and SADC. However, there has since been a fundamental shift in the approach to consolidation of the TFTA. The present position is that what has already been concluded, i.e. the acquis, in the respective RECs will remain intact, and countries will now only negotiate with partner countries with whom they do not currently trade on preferential terms.* This means that, for example, a country that is participating in both the COMESA and SADC FTAs will continue to do so, but in consolidating the TFTA, such a country will negotiate with countries that are not currently participating in these FTAs, and it is to the trade that will result from this process that the TFTA rules will apply. Indeed, instead of seeing the TFTA process create one single FTA in which it would be operating in, such a country would instead be trading within three different FTAs.

The current scenario in the tripartite framework is pertinent for a couple of reasons. Firstly, it would have to be considered whether such an approach would also be followed for the second bloc. According to the concept note that has been drafted for its creation, ECOWAS has made some progress in the consolidation of its FTA, while ECCAS has since launched its FTA but is facing significant challenges in its implementation. The approach of preserving the current acquis and concluding FTAs where they do not currently exist therefore seems difficult to implement in the context of the second bloc, and it would therefore make sense to bring the respective RECs together into a single FTA.

The second point that naturally flows from this is that of then merging the second bloc’s FTA to the TFTA. There have since been suggestions for the TFTA negotiations to revert to the initially intended approach of concluding a single FTA.* If the current trajectory of the TFTA is maintained, there would not be a single pole to which the second bloc would be merged, but rather a number of FTAs to which TFTA rules would apply, in addition to the COMESA and SADC FTAs and the EAC customs union. It is difficult to envisage how a single continental FTA would then be concluded in such a scenario. What makes the situation even more complicated is that overlapping membership is not only limited to countries within the tripartite framework and the envisaged second bloc respectively, but also exists across the two blocs. Indeed, there are some tripartite countries that participate in some of the second bloc’s RECs and would necessarily form part of that bloc’s FTA. For example, Angola, Burundi and the Democratic Republic of Congo (DRC) are members of ECCAS, and Comoros, Djibouti, Egypt, Eritrea, Kenya, Libya and Sudan are members of CEN-SAD. This being the case, consolidation of the second bloc’s FTA would mean the conclusion of an extra FTA for these countries, in addition to their arrangements under COMESA, EAC, SADC, or the TFTA, whichever is applicable to each. If the status quo of a restrictive interpretation of the acquis persists within the tripartite framework, the remaining countries of the TFTA area would then also have to negotiate with countries of the second bloc so as to form respective FTAs of their own. Such negotiations would of course not include the aforementioned countries with overlapping membership across the blocs, as FTAs with these would be concluded under the tripartite arrangement.

From the foregoing, it is clear that the two blocs may not be heading on a path towards smooth and effective convergence into a single continental FTA as things stand. The possibility of multiple FTAs being formed and then merged seems to be an option that is slowly being followed. Creation of the continental FTA in this way is however not a straightforward process at first glance, and may in fact entail a duplication of efforts at a later stage. The initial thoughts of concluding two FTAs that would be merged into one seem like a more viable option. It is hoped that as the second bloc embarks on its integration project, and as cross-referencing with the tripartite framework continues, much thought will also be given to the most effective way in which both blocs should pursue their respective integration agendas, so as to ensure that the continent-wide FTA is effectively concluded further down the line.

African Union. (2013). Background material (incl. Mauritius meeting outcome and concept note) for First Negotiation Meeting on the Second Bloc of RECs. [Online]. Available: http://ea.au.int/en/validation-meeting-and-second-bloc-negotiations

Erasmus, G. (2013). Redirecting the Tripartite FTA negotiations? [Online]. Available: http://www.tralac.org/files/2013/06/S13TB022013-Erasmus-Redirecting-the-Tripartite-FTA-negotiations-20130626-fin.pdf