Legal and Institutional Aspects of SACU SACU Workshop at SA Parliament 16 March 2011 Legal and Institutional Aspects of SACU Prof Gerhard Erasmus

OVERVIEW OF PRESENTATION What is a Customs Union? Basic features of 2002 SACU Agreement Developments in SACU Developments in SADC Tripartite FTA Economic Partnership Agreements What does this mean for SA Parliament? Concluding Remarks

What is a Customs Union? It is about regional integration and trade WTO requirements – Art. XXIV GATT Single Customs Territory Common External Tariff Preferential Trade among members No internal rules of origin unless re third parties What happens at internal borders? To what extent does it promote trade among members? Why have it? Part of AU and REC philosophy

Basic Features of 2002 SACU Agreement It has a specific history It is an Int. Organization Institutions -- not yet fully consolidated Unique revenue sharing formula Role of Secretariat – what does it do? Who speaks on behalf of collective? Agreement contains remnants from 1969 Agreement Art. 42 and new Annexes How does it fit in int. trade negotiations? Is it rules-based?

Developments in SACU How does it look after a 100 years? A Summit to come - Const. amendments Consolidation – outstanding Institutions Implications of Tariff Board for SA role and doing business A new revenue sharing formula? SACU’s role in trade negotiations (EPAs, Tripartite FTA, EFTA, Mercosur…. ) What powers for the Secretariat? A Development Fund?

Developments in SADC Is the SADC customs union on the backburner? Members have different views re future direction & Tripartite FTA What has Tribunal brought since 2005? What happened re Tribunal and what to expect? Are present developments around the Tribunal a crisis? Uncertainty about SADC trade regime – is it rules-based? Incomplete building blocks – derogations and Annex VI to Trade Protocol Bigger picture problems consists of interrelated aspects, overlapping membership consequences and lack of clear rules

Tripartite FTA Still in early stages – Negotiations still to start Who will negotiate? On behalf of whom? Very detailed legal instruments proposed What institutions? Who will be the members? Watch the rules of origin Notification to WTO Remember domestic constitutional requirements Will a burning Egypt be a partner? Southern Sudan? How serious is the political will?

Economic Partnership Agreements Formally still on track WTO compatibility issue will not go away Less noise Less enthusiasm In SADC EPA - fit with TDCA What required for finalising & ratifying them? Are they too cumbersome? Do they fit into a global picture? See regional MFN issue.

What does this mean for SA Parliament? Role under Art. 231 of Constitution Oversight function Interaction with Executive Int. Trade and DIRCO dimensions Budgetary aspects Keeping up with developments There is a bigger picture Regional and African developments Multilateral developments Do we have a regional policy?

Concluding Remarks Quo vadis SACU? Quo vadis southern Africa? Who will take the initiative? Need for regional policy and leadership RECs – institutional overload? Lack of clear vision & technical constraints Issue of Sovereignty Weak states uneasy with regional bodies & enforcement of their rules In WTO -- is there a proper fit? Tralac experience re trade remedies How will we deal with China? How will China deal with us? Where are the regional policies and policy making? Is there a plan? Implications of BRICSA? What are the global priorities?