Policy Development and Research
For SACU to develop as a viable regional economic entity, progressis needed in the intra-SACU policy development and harmonization.
The focus for SACU to start work on common policy development iscontained in Part Eight of the 2002 SACU Agreement, whichdeals with Common policies. Specific areas include industrial policiesand strategies (Article 38), agricultural policies (Article 39),competition policies, laws and regulations (Article 40), and policies and instruments to address unfair trade practices (Article 41).
It also included in areas under Part Five of the Agreement inthe harmonized technical regulations and product standards (Article28) and sanitary and phytosanitary measures (Article 30).
SACU Member States, in recognizing the importance of balanced industrial development of the Common Customs Area as an important objective for economic development and pursuant to this, agreed that common policies and strategies with respect to industrial development be developed. SACU has started work on the development of a common industrial policy. Member States have emphasized the urgent need for an industrial policy for SACU as it is an essential step towards the effective operation of the National Bodies and the Tariff Board. It will also be an important component in formulating tariff and trade policy, which has a bearing on revenue sharing arrangements.
The Member States have exchanged their existing policies in order to start a discourse on the meaning and scope of a SACU industrial policy framework and begin to identify its possible components. A SACU Task Team has been formed composing of the Member States contact persons to oversee the development of the industrial policy framework. The Secretariat has undertaken a policy audit review of the documentation submitted and is in the process of developing a discussion document taking all the industrial policy related documentation into account. The discussion document will take into consideration the status and scope of industrial policy development in SACU Member States and also to identify gaps and possible approaches to a ‘common understanding of industrial policy'.
In order to ensure ownership of the industrial policy development framework, Member States have submitted respective concept papers to define their levels of ambition in this regard.
Member States recognize the importance of the agricultural sector to their economies and agree to cooperate on agricultural policies in order to ensure the coordinated development of the agricultural sector within the Common Customs Area. This is explicitly set out in Article 39 of the 2002 SACU Agreement, dealing with agricultural policy development.
There will be an audit inventory among Member States in cooperation with the SACU Secretariat. This process will involve collating existing policies, policy processes, and sectoral competitiveness of Member States. This exercise will identify areas where policy harmonization already exists and where gaps in policies and potential policy conflicts occur. The audit will assist in developing a coordinated policy framework.
As part of drafting a coordinated policy framework on agriculture and to implement Article 39 of the 2002 SACU Agreement, prioritization will be considered for policies that are directly related to and facilitating production, processing, marketing and trade in agriculture products.
The process of considering competition issues within SACU is driven by the Article 40 and Article 41 of the 2002 SACU Agreement. Article 40 deals with competition policy and the requirement for Member States to all have competition policies as a pre-requisite for a SACU wide cooperation mechanism. The cooperation mechanism should also point out the process with respect to the enforcement of competition policies and regulations within SACU.
Article 41 requires that policies and instruments be developed to address unfair trade practices between Member States and for these to be annexed to the SACU Agreement. When the new SACU Agreement came into effect in 2004, the process of developing annexes to these articles started with an initiative by the Trade and Industry Liaison Committee work on the development of an Annex on Unfair Trade Practices as contained in Article 41.
Initially, in the absence of a Secretariat, the Government of the Kingdom of Lesotho agreed to coordinate the process. The United Nations Conference on Trade and Development (UNCTAD) funded the work and also provided resources in the form of intellectual expertise. As a first outcome, a study was undertaken and the findings were presented and discussed at workshops during 2004 to ensure a consultative process within Member States. The study investigated options for SACU, concentrating on the relevant Articles in the SACU Agreement and highlighted possibilities of how SACU could deal with unfair trade practices and related issues.
With the establishment and subsequent staffing of the Secretariat, the Trade and Industry Liaison Committee agreed that coordination of this work should shift to the Secretariat with the continued support of UNCTAD, work towards developing a draft Annex on Unfair Trade Practices and cooperating mechanisms on competition policy, competition law and regulations be undertaken.
The draft annexes to the 2002 SACU Agreement on unfair trade practices and cooperating mechanisms on competition policy, competition law and regulations are currently being finalized on in terms of Article 40 and Article 41.
In early 2007 the SACU Council of Ministers extended the Malawi, Mozambique, Tanzania, and Zambia (MMTZ) Market Access Arrangement.
SACU Textile and Clothing Sector
The development of the long-term strategy for the SACU textile and clothing sector has become a priority for the Council. The SACU Trade Ministers have reaffirmed the need for SACU to advance work in this area. Work has been commissioned to undertake research on all aspects relating to the development of a long-term strategy, including the cost-benefit analysis of the Textile and Clothing Industry Development Programme (TCIDP) and the options for a replacement scheme for the TCIDP.
Regional Integration is a subject of growing importance for the Southern African region as a whole, including the Southern African Customs Union (SACU) Organization. This topic has been on the agenda for Southern Africa for the past half century and the need for a collective effort remains an important ingredient towards deepening Regional Integration.
There are a number of areas and challenges that face the Regional Integration initiatives for Southern Africa These include:
- The establishment of Common Policies in a number of areas including, industrial, agriculture and competition policies.
- The Convergence of Trade related policies.
- Comprehensive economic surveillance and greater policy coordination.
- Transport and communication infrastructure.
- Strengthening the provision of regional public goods and commodities.
The debates about Regional Integration Arrangements in Southern Africa have intensified over the last two years. This has been mainly as a result of developments that have taken place within the Region and Globally.
Being the oldest functional Customs Union in the world. SACU has advanced its integration further than what is required in a Customs Union, it does not only have a Common External Tariff but currently four of its Members are cooperating in the Common Monetary Area (CMA), and it is currently engaged in activities to further integrate the economies of its Member States.
SACU has a legal framework to achieve deeper integration. To further deepen SACU's integration, the new SACU Agreement provides for the development of common industrial policy, and a policy of unfair trade practices. It also provides for cooperation in Agriculture Policies and Competition Policies. In addition it provides for a Common Negotiating Mechanism with respect to trade Negotiations with third parties.
To address the Challenge for deeper Regional Integration, the SACU Council of Ministers, which is the supreme decision making authority of SACU matters, has set up a Task Team consisting of SACU Senior Officials in Trade and Industry as well as Finance.
Several Studies have been commissioned in this area. The primary mandate of the SACU Task Team is to address issues of accelerating the implementation for the 2002 SACU Agreement and to advise Council on issues and Challenges for deeper Regional Integration.