Topics publications: Trade law and regulation
Trade Reports
Governance, trade and statehood in Africa
‘The main reason why Africa’s people are poor is because their leaders have made this choice.’ This is the opening sentence in a recent book about poverty in Africa and what to do about it. The author argues, in a nutshell, that only political and institutional reforms will unlock Africa’s potential in human and natural resources to bring about development, opportunities and hope.
This is not a new message. International institutions and commentators have been arguing for years that African nations have to reform their government institutions and policy procedures in order to be able to tackle poverty and under-development. Better trade governance is, for example, key to reaping the developmental benefits of trade liberalisation.
Many African voices have echoed the same message about better governance, mostly with the more urgent plea for democratic rule at home and respect for human rights. Why then is it not happening – or at least not on a sufficient scale?
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
An assessment of the Trade and Development Cooperation Agreement
The pdf Trade, Development and Cooperation Agreement (TDCA) (652 KB) between South Africa and the European Union (EU) is an important trade agreement for South Africa, as it enables preferential access to its largest market for many product lines. The Department of Trade and Industry (dti) reports that it was signed in October 1999 after five years of negotiations. It was provisionally but only partially applied from 1 January 2000 and fully entered into force on 1 May 2004, albeit with phasing periods.
The TDCA had several objectives that included strengthening dialogue between the parties, supporting South Africa in its economic and social transition process, promoting regional cooperation and the country’s economic integration in southern Africa and in the world economy, and expanding and liberalising trade in goods, services and capital between the parties. It is the trade objective that we concentrate upon in this paper, with an emphasis upon the agricultural trade.
In light of South Africa’s growing ties with the BRIC (Brazil, Russia, India and China) countries, it is crucial to look back and assess the TDCA against the prospects of an enhanced trading and economic relationship with the BRICs. This is especially so in the present policy environment where the Economic Partnership Agreements (EPAs) between the EU and African countries are being vigorously negotiated.
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
A Perspective on Common Industrial Policies for the Member States of the Southern African Customs Union
The Southern African Customs Union (SACU) is a customs union, as defined by having regional free trade behind a common external tariff (CET). This creates a common customs area covering the markets of Botswana, Lesotho, Namibia, South Africa and Swaziland (BLNS).
Contrary to the conventional model of a customs union, SACU is also an excise union. Furthermore, with the exception of Botswana, the member states are also organised in the Common Monetary Area (CMA) which effectively integrates Lesotho, Namibia and Swaziland into the South African money and capital market. In the model of linear regional integration, SACU would represent a good example of variable geometry.
This paper addresses the use of industrial policy as a means of encouraging the economic development of SACU member states, the smaller and economically lesser developed countries in particular. The topic is not only relevant because SACU is a customs union of developing but unequal economies but also because the SACU Agreement of 2002 specifically requires the Member States to develop common industrial policies. This makes a close consideration of the rationale and nature of SACU industrial policy a policy and legal imperative.
The way in which SACU currently operates and the challenges the customs union face in terms of designing and implementing an appropriate industrial policy are intimately linked to the unique nature of SACU and of its development since its establishment early in the twentieth century.
To explain this uniqueness the paper commences with a brief overview of the salient developments in the history of SACU with an emphasis on facets of industrial policy followed, in consecutive sections, by a discussion of industrial policy and development strategy in the common customs area.
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
A comprehensive regional industrial policy for SADC
At present, ongoing Southern African Development Community (SADC) initiatives are underway to construct a comprehensive Industrial Policy Framework for the region. The purpose of this paper is to highlight certain pertinent issues that ought to be brought into focus in the design and construction of this policy, and introduces a timeous reflection of the challenges and potential for more regionally integrated industrialisation strategies.
The paper begins by summarising some of the more recent approaches to the issue highlighted by the United Nations Industrial Development Organisation (UNIDO) and the United Nations Conference on Trade and Development Report (2011). This report emphasises the dramatically changed world environment of the 21st century which, in turn, has induced a shift in thinking on how to implement viable and sustainable industrialisation strategies and policies.
Secondly, the paper reflects on some of the newer theoretical approaches to regional industrialisation in light of these changes and their appropriateness to the issue in question. The paper concludes with a vision for a more integrated approach and a suggested institutional role that SADC and its relevant organs can play in this transformation strategy.
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
Another chapter in the SADC Tribunal saga: South African Court confirms the Tribunal’s Costs Order
During the final week of September 2012, the South African Supreme Court of Appeal handed down a judgment giving effect to aspects of an earlier ruling by the Southern African Development Community (SADC) Tribunal against Zimbabwe for violating certain SADC Treaty obligations. The obligations in question concerned the protection of basic human and democratic rights.
This matter came before the South African Supreme Court of Appeal because Zimbabwe had appealed against an earlier judgment against it by another local court. The latter had granted a writ of execution (requested by private applicants) authorising the sheriff for the district of Cape Town to attach immovable properties belonging to Zimbabwe and to sell them in execution of the Tribunal’s costs order against the government of Zimbabwe. The Zimbabwean appeal has now failed and unless it can convince the South African Constitutional Court to rule in its favour on the basis of a constitutional complaint, it will have exhausted all remedies available from the South African judiciary.
This adds another chapter to the saga around the SADC Tribunal in the aftermath of its rulings against Zimbabwe. The judgment explains a number of fundamental legal issues which are vital to the future of 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 Briefs
What role for national planning commissions in the promotion of deeper regional integration in SADC?
The Southern African Development Community (SADC) has set itself very ambitious regional integration goals. There is now general agreement that more realistic goals and a better understanding of the integration process, the legal obligations and the outcomes are required. Even with scaled-downed expectations the efforts of the members and SADC need to be improved quite dramatically in order to achieve the economic and political objectives of the organisation. And there should be a concerted effort to align the various national development plans in the pursuit of regional goals for the benefit of all.
What is the SADC formula for meeting its own goals and for monitoring the performance of member states? SADC lacks a clear approach or principle when it comes to the harmonisation of national efforts. The Secretariat cannot exercise the powers necessary to monitor and direct national activities. There is no mechanism to ensure compliance or remedy failures. Part of the solution lies in improving and strengthening SADC’s collective voice, if the necessary political will can be mustered. In the meantime the various domestic agencies responsible for national development plans should study the regional dimensions of their own schemes more thoroughly in order to align national efforts across borders and contribute to shared benefits.
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
Regional integration in SADC: retreating or forging ahead?
Regional economic integration remains a viable development strategy for Africa, a continent characterised by small economies and markets. Integration of these markets can facilitate efficiencies in production, investment and trade, thus enhancing development outcomes. The Southern African Development Community (SADC) has adopted a development integration approach which seeks to address production, infrastructure and efficiency barriers to growth and development. In the area of trade and economic liberalisation, the Regional Indicative Strategic Development Plan (RISDP) articulates the roadmap for SADC integration through the establishment of a free trade area (FTA) by 2008, a customs union in 2010, a common market in 2015, a monetary union in 2016, and an economic union with a single currency in 2018.
2012 marks two important milestones in SADC – the completion of member states' tariff phase-down schedules to reach a status of an effective free trade area and the current review of the RISDP. This paper provides a status of trade integration in SADC, highlighting achievements, challenges and constraints. Understanding constraints facing this process can provide insights as to whether the region should forge ahead with its approach to economic integration or retreat and evaluate the process with a view to define what could be its immediate priorities. The current review of the RISDP should provide an opportunity to appraise and inform the process moving forward, particularly the region's advancement towards its envisaged integration milestones.
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
tralac Policy Brief: Priorities for SADC’s regional economic integration agenda
This Policy Brief starts from the premise that regional economic integration makes sense for Africa; a continent characterised by small markets, small economies and small countries. The creation of an integrated economic space can facilitate efficiencies in production, investment and trade, thus enhancing development outcomes.
The 32nd Summit of Heads of State and Government of the Southern African Development Community (SADC) takes place against the backdrop of two important milestones in SADC’s regional economic integration agenda; namely the completion of Member States’ tariff phase down schedules to reach the status of an effective Free Trade Area (FTA) and the review of the Regional Indicative Strategic Development Plan (RISDP).
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Books
The Tripartite Free Trade Area – towards a new African integration paradigm?
This is tralac’s third book focusing on the Tripartite Free Trade Area (T-FTA). Following an economic assessment of the impact of T-FTA, with specific emphasis on agriculture and agri-business development opportunities in this region, as well as non-tariff barriers that limit intraregional trade and investment in the first book, the second book presented an analysis of the draft T-FTA Agreement and annexes that had been developed by technical experts prior to the launch of the negotiations. What emerges from the negotiations, which were officially launched at the second Tripartite Summit in June 2011, and which got underway early in 2012, may well be markedly different from these draft instruments.
This third book aims to encourage enquiry and new thinking about the African paradigm of regional integration, specifically about the nature, design and architecture of a T-FTA to address the region’s fundamental development challenges.
The T-FTA is anchored on three pillars, namely market integration, infrastructure development, and industrialisation. The explicit inclusion of the second and third pillars in addition to the traditional market integration pillar in the ambit of a free trade area provides the potential for the development of a deeper integration agenda that addresses not only impediments at the borders but more fundamentally the behind-the-border constraints on industrial development and competitiveness.
Commitment to establish a T-FTA that goes beyond the traditional trade-in-goods agenda to address the region’s infrastructure deficit and to enhance its industrial capacity requires new thinking about traditional market integration issues such as tariff liberalisation and rules of origin, which are among the agenda items of the first phase of the negotiations. The T-FTA can be a new generation African integration arrangement; these negotiations will be a test of how serious member states are about a developmental approach to regional integration.
This book was launched at the 2012 tralac Annual Conference, held on 19-20 April in Cape Town, South Africa.
© 2012 Trade Law Centre for Southern Africa and Swedish Embassy, Nairobi
Publication of this book was made possible by the support of the Trade Law Centre for Southern Africa (tralac) and the Swedish Embassy, Nairobi. 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 Briefs
The Regional Indicative Strategic Development Plan: SADC’s trade-led Integration Agenda
The Southern African Development Community (SADC) Secretariat conducted a desk review of the Regional Indicative Strategic Development Plan (RISDP) in 2011. This paper provides a brief review of the findings of this review and places this assessment in a broader regional perspective.
The RISDP was adopted by the Council of Ministers of the SADC in August 2003 as a blueprint for regional integration in SADC. Underpinned by SADC’s vision of a common future within a regional community, as well as its mission to promote sustainable and equitable economic growth and socioeconomic development through, among other things, deeper cooperation and integration, the RISDP sets the priorities, policies, and strategies for achieving the community’s long-term goal – the eradication of poverty in the region. The ultimate objective of the RISDP is therefore “to deepen the integration agenda of SADC with a view to accelerating poverty eradication and the attainment of other economic and non-economic development goals”.
The Desk Assessment revealed that remarkable progress has been made since the effective implementation of the RISDP began in 2005, demonstrating the continued need for such a strategic plan. However, limited resources and capacity constraints have hampered the ability of the SADC institutions and member states to effectively implement the RISDP programmes and deliver on all the targets and milestones set for the period.
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.