Parliamentary Question: dfa: Increase of regional economic intergration



Mr LS Ngonyama (COPE) to ask the Minister of International Relations and Cooperation:
(1)Whether her department has registered any notable progress in achieving the cooperation of neighbouring governments to optimally increase regional economic integration; if not, why not; if so,

(a) what is the nature and extent of the progress and (b) what are the further relevant details?
(2)Whether the Minister has any further plans in place to take the process further in the quickest possible time; if not, why not; if so, what are the relevant details?

Yes, progress has been achieved. (a) The global financial and economic crisis and the difficulties around the issue of the European Union interim Economic Partnership Agreements (i-EPAs) with SACU and SADC member states have underscored the need for countries in the Southern Africa region to work in close partnership in promoting higher levels of intra-Africa and inter-regional trade as a key driver for enhanced regional economic growth and development.

Consequently, the need to accelerate the pace of regional economic integration has become an immediate priority for South Africa and other countries in the Southern African region.

As such, the regional economic integration agenda is now a standard discussion item in the context of South Africa’s engagement with SADC countries at both Summit and Ministerial levels, as well as in the conduct of its bilateral relations through mechanisms such as Joint Commissions, chaired by the President of the Republic of South Africa or the Minister of International Relations and Cooperation, supported by relevant sectoral ministers.

Since the official launch of the SADC Free Trade Area (FTA) in 2008, significant progress has been recorded in the area of trade integration. This is borne out by figures which show that where in 2008, 85% of goods traded in the SADC region were duty free, by 2012, 99% of goods traded are likely to be duty free.

Against this background, the 30th SADC Heads of State and Government Summit held in Windhoek, Namibia in August 2010 served to highlight the urgent need to accelerate the pace of regional economic integration in SADC by committing the organisation and member states to an ambitious work programme, in support of the Summit decision that renewed impetus be given to accelerating the regional economic integration agenda.

In this regard, Summit endorsed the adoption of a comprehensive work programme with concrete actions and timelines aimed at consolidating the SADC FTA as an immediate priority focus area.

It further reaffirmed its commitment to establishing a SADC Customs Union and endorsed the decision of the SADC Ministerial Task Force on Regional Economic Integration to appoint a high-level expert group. The main mandate of this group will be to consolidate and reach agreement as well as a common understanding on the parameters, benchmarks and timelines of a model customs union and its implementation by December 2011.
(b) Undeniably, the future of South Africa’s economic development and that of the SADC region is also linked to the future of the Southern African Customs Union (SACU). In this context, and in the broader framework of deepening regional economic integration, the decision taken by leaders at the occasion of the Southern African Customs Union centenary celebrations in Windhoek in April 2010, that the Heads of State and Government meetings be institutionalised as a formal structure of SACU, is seen as an important indicator of the existence of the necessary political will, solidarity and cohesion to instil a sense of urgency to the regional economic integration agenda.

It is anticipated that the elevation of SACU decision-making at the executive level will give substance to the development of deliberate initiatives to promote intra-SACU trade and the development of a SACU trade and tariff policy and trade strategy that supports industrialisation in SACU. Indeed, the revitalisation and reinvigoration of SACU may see the unlocking of its strong institutional and human capacity as a nucleus for the robust advancement of regional economic integration.

Undoubtedly, this important development, underpinned by its strong institutional arrangements, and supported by the ongoing efforts of President Jacob Zuma to build consensus on a common approach with his Botswana, Lesotho and Swaziland (BLS) counterparts on the challenges facing the organisation, has seen SACU engaging as a block in its negotiations with the EU in line with the 2002 SACU Agreement. These developments have raised the prospects of arriving at a mutually agreed upon EPA arrangement between the EU-SACU and EU-SADC countries.

Regional economic integration within SADC remains a core priority of the Department of International Relations and Cooperation, in the context of promoting the African Development Agenda.

Given the complexity of the technical work on policy harmonisation, rules of origin, standards, tariff alignment and the like, complicated by the reality of uneven development among and between member states, regional economic integration is an ongoing process. However, South Africa has through ongoing high-level bilateral interventions, supported by like-minded developing and developed country partnerships, succeeded in placing this issue at the centre of the global economic development debate. South Africa has and will continue to inform and shape debate on the prioritising of continental and regional economic integration through its membership of the United Nations, African Union, SADC and SACU. In keeping with the responsibilities attached to its membership of continental and regional organisations, South Africa will endeavour to meet its obligations through the allocation of significant resources, towards fully supporting the implementation of decisions in these formations impacting on the regional and broader continental integration debate, in alignment with the objectives of the Abuja Treaty.

Equally, South Africa will continue to advance the objectives of regional economic integration, through its membership of important international organisations such as the G-8 Outreach Partnership, G-20, IBSA and others as well as through established partnership fora such as the EU-Africa, China-Africa (FOCAD), Japan- Africa (TICAD), India-Africa and others.

The establishment of the COMESA-EAC-SADC Tripartite FTA at the inaugural Summit of the Heads of State and Government in Kampala, Uganda in 2008 provides an enabling platform for rapidly growing intra-African trade through enhanced market access to a potentially huge African market for SADC countries. The COMESA-EAC-SADC Tripartite FTA between the three regional economic communities (RECs) posits an expanded trade bloc, comprising 26 countries with an estimated population of 568 million people, a combined GDP of US$875 billion and a per capita GDP average of US$1,540.

As such, the COMESA-EAC-SADC Tripartite FTA process is likely to become an increasingly important centrepiece of South Africa’s regional economic integration agenda. Consequently, it has become an immediate priority for South Africa in support of broadening and deepening regional integration.

The SADC region will host the next Tripartite Council of Ministers and Summit in 2011 and national consultations will be held on 16 November 2010 in Pretoria as part of preparations for this important event. The Department of International Relations and Cooperation, in partnership with the Department of Trade and Industry, the National Treasury and other stakeholders, is actively involved in the preparatory processes.