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

2. 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

3. 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

4. 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?

5. 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?

6. 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

7. 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?

8. 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.

9. 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?

10. 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?