Development Through Trade

Business Day, Johannesburg

Development Through Trade

OPINION

By Tsidiso Disenyana

3 November 2008

Institutional development is considered important in empowering the Southern African Customs Union’s (Sacu’s) secretariat to play a significant role in regional policy development and the associated policy-making structures.

This follows from the realisation that the previous 1969 agreement did not promote the notion of common policies and common institutions as central to achieving Sacu’s goals.

Consequently, the new Sacu agreement - concluded in 2002 and having entered into force in 2004 - calls for the establishment of eight institutions. These include the council of ministers, national bodies, customs union commission, secretariat, tribunal, tariff board, common negotiating mechanism as well as the technical liaison committees focusing on trade and industry, transport, agriculture and customs.

However, the current arrangement and interface between institutions does not reflect any "commonality" about them. Firstly, the implementation role of the customs union commission is somewhat misplaced. The fact that it is composed of officials from member states renders the commission a forum for articulating national interests rather than regional interests. Furthermore, because of chronic staff shortages the commission relies heavily on the overburdened technocrats from member states, who do not have ample time to promote regional interests. There is therefore the danger that dominant member states could seize this opportunity and exert their power in crucial policy decision making.

Secondly, it is still unclear within Sacu which institution is responsible to speak on behalf of the organisation and the collective. There is also no common structure to monitor and evaluate the implementation of commitments made by member states or monitoring implementation of binding decisions undertaken by other internal structures.

Furthermore, the inability of Sacu to portray common approaches to policy matters has been exposed, for example, in the failed trade negotiations with the US and during the economic partnership agreement negotiations with the European Union (EU).

To this day SA continues to perform the technical and supervisory roles of Sacu, and it will continue to do so provided the proposed institutions are operational.

Sacu could learn from the EU’s process of monitoring and evaluating implementation commitments. Among other activities, the EU process comprises ongoing monitoring and evaluation through utilisation of surveys, action plans and technical reports measured against objectives to be attained. More importantly, Sacu would need to tailor its monitoring and evaluating processes so that they reflect the organisation’s integration agenda, past, current and future commitments and internal capabilities.

Thirdly, the role of the secretariat is uncertain. The secretariat does not have clear demarcation of and responsibilities, ranging from undertaking records of trade negotiation sessions to compiling records of common revenue fund. Elsewhere it has been recommended that the secretariat be at the centre of coordination of functions and not to serve as a mere communication channel.

Lastly, while the establishment of the tribunal, national bodies and the tariff board is at an advanced stage, it is worrisome that the common negotiating mechanism does not yet exist. Yet it is an institution tasked with coordination and development of common trade negotiation positions vis-€-vis third parties.

It has been argued that one of the key obstacles to the speedy establishment of the common negotiating mechanism is member states’ struggle to strike a balance between nation states’ sovereignty vis-€-vis regional autonomy.

Sacu should look at the experience of the Caribbean Commission (Caricom) in designing its regional negotiating mechanism. Though it took Caricom no less than a decade to design the mechanism, it is purported to be effective when engaging external parties.

These challenges provide an explanation why Sacu is "institutionally bankrupt" and why it subsequently continues to struggle in engaging with external parties. The absence of some of the proposed institutions and lack of collegiality among the institutions undermines the institutional "commonality" aspirations of the 2002 Sacu agreement and thus renders the organisation powerless. Until the proposed institutions are established and become operational, the commitment towards achieving common institutions with associated common policies will be just a pipe dream.

Tsidiso Disenyana is deputy project head: development through trade at the South African Institute of International Affairs

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