ATC120917: Report of the Portfolio Committee on International Relations and Cooperation on the workshop on progress with processes towards regional integration, dated 29 August 2012
Report of the Portfolio
Committee on International Relations and Cooperation on the workshop on progress
with processes towards regional integration, dated 29 August 2012
The Portfolio Committee on International Relations and Cooperation held
a workshop on 29 February 2012 at the Townhouse Hotel,
Members in attendance were:
African National Congress
Mr HT Magama - Chairperson
Ms R Magau
Ms W Newhoudt-Druchen
Mr E Sulliman
Ms L Jacobus
Mr I Davidson
Mr B Eloff
Congress of the People
Mr S Ngonyama
Inkatha Freedom Party
Mr MA Mcwango
United Democratic Movement
Mr B Holomisa
Members of staff in attendance were Ms L Mosala, Content Adviser, Mr L
Sigwela, Committee Secretary and Mr D Madlala, Committee Researcher.
The experts invited to facilitate the workshop were the Director-General
of the Department of International Relations and Cooperation (the Department)
Ambassador JM Matjila, Mr Paul Kalenga, Trade Policy Adviser, from the Southern
African Development Community (SADC), Trudi Hartzenberg, Executive Director
from the Trade Law Centre for Southern Africa (TRALAC), as well as Professor
Gerhard Erasmus also from TRALAC.
2. Opening address
Ms L Jacobus MP welcomed all those in attendance. The Chairperson of the
Portfolio Committee on International Relations and Cooperation (the Committee),
Mr HT Magama MP, gave a political input and statement of objectives with a
background on the issue of regional integration as well as South Africas
history in engaging with Southern Africa.
3. Statement of objectives
by Mr HT Magama MP
The interest of the Committee was to establish the role Parliament could
play in the national effort to drive the regional integration agenda. It was of
interest to explore how deeper and wider integration could be achieved as an
essential ingredient for a future economic community. Taking on board the
citizenry of the region and preparing them for a greater global competition and
bargaining power, was regarded important. It was important to identify
bottlenecks hindering deeper integration agenda, and to explore whether there
was a common agenda in the Southern African Customs Union (SACU) and the
Southern African Development Community (SADC). The other pertinent issue was to
establish whether the member states thereto understood and expected the same political
outcome with regional integration.
he phenomenon of regional integration in Southern
Africa, just like the rest of
In the 1970s, an informal grouping of Frontline States (FLS) was created.
The paramount objectives were to combat apartheid
Consequently, from the FLS initiative, the Southern African Development
Coordination Conference (SADCC) was established in 1980 by nine states. In part,
it was a political response to
The mounting pressure on the apartheid regime, however, led to it
abandoning its policy of regional destabilisation at the end of the 1980s. From
1994, when Nelson Mandela became president of a post-apartheid
The transformation of SADCC from a Coordinating Conference to a
Development Community took place in August 1992 in
Southern African regionalism removed some trade barriers, allowing
greater movement of goods and capital across its borders. However, statistical
data reflect that there is very little trade amongst African states.
A question was posed as to what the
impediments could be to inter-state trade.
In reality, the earliest structure depicting regional integration is SACU,
which celebrated a hundred years of existence in 2010, marking its place as the
oldest customs union in the world. The structure of SACU had a facelift in 2002
to accommodate the refocusing of its mandate to fit into the modern-day requirements
of a union of its kind to serve its members as required.
SACU has had its fair share of successes in distributing collected
revenue amongst its membership. However, this continues to be a challenge to
ordinary South Africans. Voices have criticised this arrangement of transfers
of funding to neighbouring countries, irrespective of their development
The lessons learnt from the events around the handling of Economic
Partnership Agreements (EPAs) are huge. From that experience, it is difficult
to say the region was ready to competitively participate in multilateralism
from a regionalised standpoint. This would assist states to negotiate more effectively
for international market access and ward off marginalisation and unfair
competition in the global arena.
4. Presentation by
Ambassador JM Matjila
4.2 Developments of the Economic Regional Agenda: SACU
SACU remains the oldest customs union; however this has not been without
challenges. The SACU Agreement (2002) is not fully adhered to, which manifested
when negotiating with third parties (e.g. EPAs). Revenue declines from the SACU
revenue pool exposed an over-reliance on SACU receipts for national budget
revenue by member states and a lack of diversification. Low intra-regional
trade was prevalent. In addressing the challenges, SACU member states agreed on
five priorities, namely: (1) development of regional industrial policy, (2)
review of the revenue sharing formula, (3) development of SACU institutions, (4)
unified engagement of member states in international trade negotiations and (5)
4.3 Developments of the Economic Regional Agenda: SADC Free Trade Area
The launch of the SADC Free Trade Area (FTA) in 2008 provided an
enabling platform to advance higher levels of regional economic integration and
infrastructure development. The SADC Summit of August 2010 adopted a
comprehensive work programme with concrete actions and timelines aimed at
consolidating the SADC FTA as a priority. Within SADC a significant trade
integration progress has been recorded. In 2008, 85 per cent of goods were
traded duty free. By 2012, 99 per cent of goods traded would be duty free.
4.4 A SADC CUSTOMS UNION
The SADC Customs Union was not realised in 2010 as
SADC Summit, during its August 2010 meeting, reaffirmed its commitment
establish a SADC Customs Union and recognised the need to establish
between the processes to consolidate the SADC FTA, the
the Customs Union and the COMESA-EAC-SADC Tripartite FTA.
The HLEG met four times in 2011, and a report was submitted to the SADC
Senior Officials Task Force in November 2011. That report would form part of
deliberations at the Ministerial Task Force on Regional Integration and the SADC
Council of Ministers meeting which was then underway (in February 2012) in
4.5 Regional Indicative Strategic Development Plan (RISDP) review
The RISDP identified the establishment of specific milestones in support
of the regional economic integration agenda, namely a SADC Free Trade Area by
2008; a Customs Union by 2010 and a Monetary Union by 2016.
The Free Trade Area was launched in
A Monetary Union is not yet on the
The current focus is on consolidating
the Free Trade Area. In its meeting of
March 2011, the Council of
Ministers took a decision that member states undertake reviews of national
development policies to ensure alignment to the RISDP.
4.6 COMESA-EAC-SADC Tripartite Free Trade Area
The establishment of the COMESA-EAC-SADC Tripartite Free Trade Area
(FTA) arises from a decision by the Heads of State and Government at the
Inaugural Tripartite Summit in
The rationale for the creation of a Tripartite Free Trade Area is based
on the following issues:
It addresses issue of overlapping membership;
It forms a building block towards eventual African
economic integration as envisaged by the Abuja Treaty of the African Union;
It creates a better opportunity to expand market
access for South African products on the continent, while preserving South Africas
market space; and
However, it will also enable greater competition
with other strong economies in the regions such as
The Second Tripartite Summit officially launched the COMESA-EAC-SADC
Tripartite Free Trade Area (FTA). During the negotiations on 12 June 2011 in
Recent developments were that the Inaugural Meeting of the Tripartite
Trade Negotiation Forum (TTNF) was held in
Regional and continental infrastructure development is of intrinsic
importance to the realisation of
The championing by President Jacob Zuma of the North-South Corridor project
has provided important impetus to continental infrastructure development
projects. It will be mirrored in other corridor projects across various
countries and sub-regions throughout the continent.
The Director-General recommended that
Finalisation by SADC of the review of RISDP
priorities and time-frames.
Consolidation of SADC FTA for trade liberalisation
in East and
Promotion and strengthening institutional
cooperation between SADC and SACU (the notion of SACU as nucleus for regional
Prioritisation regional economic integration with
focus on market integration; infrastructure development; and industrial
The realisation of the grand FTA (Tripartite
There is a need to develop clear strategies of
engagement within various groupings and to ensure that they are in line with
5. Observations by members
of the Committee
In order to reach the goal towards regional integration within SADC, the
following observations need to be taken into account:
The role of Parliament with regard to regional integration
should be strengthened.
The Committee should organise a consultative
meeting or workshop with other SADC members of Parliament to discuss a unified
approach to regional integration.
Fears by member states around losing economic and
political sovereignty in regional integration must be addressed.
Lessons must be drawn from the current EU
experience of the economic meltdown and its impact on the
Climate change should be at the centre of regional
South African companies with branches in other
Perhaps at some stage in the future, a federal
High-quality products and the processing of goods are
matters that are often neglected but should be discussed.
Government bureaucrats should be committed to the
regional integration initiative.
Discussions should be initiated around domestic
policies and unequal development in the region.
There are signs of a decline of living standards in
the region. This should be adequately addressed.
6. Response by the
The role of parliaments in SADC on the regional
integration process is important.
Boosting intra-Africa trade is vitally important.
National interest issues require national debate
and the general public must be involved in the process, so is the case with the
regional integration issue.
Bigger countries are often the ones that have to foot
the bill for integration.
Parliament should guide both the Department and the
Department of Trade and Industry politically as the integration process
In the past this country had factories producing
certain materials, but now it imports these materials.
SACU member states need to do more with ICT and
The tax base has reduced in SADC countries like
The Official Development Assistance has also
declined due to the economic crisis in the northern hemisphere.
7. Challenges to achieving
regional integration in
Some of the identified main challenges to regional integration included
A lack, within SADC, of a parliamentary structure
with enforcement capacity.
SADC is still a cooperative rather than a
rules-based entity. The latter was regarded as the best mechanism for success.
Legal and political institutions must be in place.
The Secretariat of SADC is not a supra-national
body, and member states have to own the decisions of the institution and
SACU has opened its markets, which is a good
Some countries do not fulfil their trade
facilitation and liberalisation obligations as set out by the SADC collective:
Intra-SADC trade flows are still quite low.
Non-diversified range of goods and services
Vertical integration in production is still lacking.
Tariff barriers, non-tariff barriers, supply-side
constraints, inadequate trade and insufficient production-related
infrastructure need to be addressed.
In order to achieve a Customs Union, Common Market, Monetary Union and
eventually a Common Currency, the following must be taken into consideration:
A Common External Tariff must be adopted therefore
countries must surrender the tariff policies.
Other problems include: overlapping membership (spaghetti
bowl), economic imbalances, divergent trade policies and strategies, customs
revenue dependence, and varied tariff structures.
A customs union requires a Free Trade Area and a common
Achieving a common market by 2015 is a politically
difficult step considering that member states have to surrender sovereignty on
financial and immigration policies.
A monetary union and a single currency require a common
interest rate and fiscal policies.
7.1 Recommendations by the
presenter as to how
A rethought policy focusing perhaps on specific
issues such as infrastructure should be considered.
Member states should strive to reduce costs of
SADC should change its competitiveness agenda
(infrastructure and supply-side measures).
Member states should reinvent the SADCC spirit, a
rules-based approach to processes of the organisation.
COMESA-EAC-SADC Tripartite mechanism offers
opportunities through market integration, infrastructure, and industrial development.
8. Observations by the members
of the Committee
The Committee should encourage participation of
broader members of society, including civil society, in regional integration
Road shows should be undertaken in various
provinces to educate the public about what regional integration entails.
SADC Parliamentary Forum and Pan-African Parliament
should have discussions on integration matters.
The priorities of each country will have an impact
of the success of regional integration.
The Departments of International Relations and
Cooperation and of Trade and Industry should engage and allow the public to
debate integration issues.
The Committee should embark on a countrywide public
diplomacy campaign on the issues around regional integration. The road show
should clearly articulate how integration would benefit the people.
A debate is needed in the House and a supporting resolution
on regional integration processes should be passed.
Integration must move in a phased manner to allow
for the economic imbalances within the region to be addressed.
9. Presentation by Trudie
Hartzenberg: Trade Law Centre (TRALAC)
A customs union means a common customs territory with a Common External
Tariff (CET). This means there is a SACU tariff (not a South African tariff;
although as the regions powerful economy,
9.2 Recommendations by the
However, SACU has not been without its fair share of challenges. Implementation
of the provisions of the reviewed agreement (SACU 2002 Agreement which entered
into force in July 2000) is still a problem. SACU is in the process of
establishing a future strategy for engaging into a deeper integration agenda,
namely that of becoming an economic community. There is a need to address the broader
regional agenda of possible involvement in the Tripartite FTA process. SACU is faced
with an intra-regional crisis, especially in
9.3 Policy statements:
The Trade Policy and Strategy
introduced by the
Trade and Industry in May 2010. It is meant to support multilateralism and commitment
to the African integration agenda. South-South cooperation is to be enhanced
and supported to create jobs in the country. Industrial development is seen as
key to economic development and regional intra-trade activities.
The White Paper on
10. Comments by members of
South-South Cooperation is important and it should be the new focus for
11. Presentation by Professor
The role of Parliament in regional integration processes is of paramount
importance. Decisions relating to water, energy, climate change and trade are
negotiated regionally or multilaterally. It is no longer easy for states to
unilaterally develop policies without reference to the rules-based principles
and agendas applying to all.
Parliament should have full grasp of regional integration issues to be
able to disseminate and educate the citizenry. Technical capacity and
coordination amongst the portfolio committees on the process is very important.
Parliament has to speak in one voice and ask the right questions (such as
whether this is the right model for economies of the region). The private
sector should be involved in all stages of negotiations as they are the
constituency which will drive the regional integration agenda.
The importance of the role of Parliament in the regional integration
agenda has been made very clear. The experts were applauded for their
facilitative role in the workshop.
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