CityPress - - Business - DIRK KOTZÉ news@city­press.co.za

he most am­bi­tious step since the for­ma­tion of the African Union (AU) was taken this week in Egypt, with a for­mal tri­par­tite agree­ment among the Com­mu­nity for Eastern and South­ern Africa, the South­ern African Devel­op­ment Com­mu­nity (SADC) and the East African Com­mu­nity (EAC) to es­tab­lish a free trade area.

At the same time, the lat­est AU sum­mit in Sand­ton will pay more at­ten­tion to its Agenda 2063, which was adopted at its sum­mit in Jan­uary.

Is there any cor­re­la­tion be­tween the two de­vel­op­ments?

The free trade area is an in­te­gral part of the AU’s in­te­gra­tion model, which was an­nounced in 1991 in the Abuja Treaty on the African Eco­nomic Com­mu­nity. The treaty iden­ti­fied six stages for im­ple­men­ta­tion over a 34-year pe­riod. They in­clude a car­bon copy of the Euro­pean in­te­gra­tion process, com­menc­ing with a free trade area, fol­lowed by a cus­toms union, then a com­mon mar­ket and con­clud­ing with a mon­e­tary union. The lat­est tri­par­tite agree­ment is there­fore stage one. This in­te­gra­tion model is premised on the no­tion that sub­re­gional in­te­gra­tion will be the foun­da­tional pil­lar of con­ti­nen­tal uni­fi­ca­tion in the form of the AU, the New Part­ner­ship for Africa’s Devel­op­ment (Nepad) and oth­ers.

It im­plies that the four (or six) stages have to be du­pli­cated at sub­re­gional level by sev­eral re­gional eco­nomic com­mu­ni­ties. The tri­par­tite agree­ment takes it to an­other level by link­ing the SADC and EAC sub­re­gions.

Th­ese de­vel­op­ments lead to Agenda 2063. One of its pil­lars is the pro­mo­tion of Pan-African­ism and, there­fore, re­gional in­te­gra­tion. This vi­sion pro­vided an op­por­tu­nity to raise the ques­tion of whether the next 50 years could real­is­ti­cally be premised on the cur­rent in­te­gra­tion model.

This ques­tion was raised in prepara­tory con­sul­ta­tions con­ducted by the depart­ment of in­ter­na­tional re­la­tions and co­op­er­a­tion but it ap­pears to be a diplo­matic mine­field too danger­ous to en­ter.

The main ques­tion re­mains: Can Africans real­is­ti­cally ex­pect suc­cess­ful in­te­gra­tion pro­cesses based on a Euro­pean model – it­self in cri­sis be­cause of Greece and oth­ers – while the pre­req­ui­sites of that model are ex­cluded?

The Euro­pean model ac­cepts mem­bers only when they have met the Copen­hagen cri­te­ria on har­mon­i­sa­tion. Th­ese have to be com­plied with through­out the membership life­time, which has been the main vi­o­la­tion com­mit­ted by the Greeks.

The African prac­tice is to ac­cept all states as mem­bers, ir­re­spec­tive of the con­di­tions of their economies. No har­mon­i­sa­tion mea­sures are re­quired and there­fore weak and strong economies are ex­pected to ig­nore mar­ket dy­nam­ics and live in har­mony to­gether. The free trade area is a good il­lus­tra­tion of this point.

A free trade agree­ment in­tro­duces trade prac­tices among states in which tar­iff and non-tar­iff bar­ri­ers are re­moved. The mar­kets of th­ese states are then open for trade and no mea­sures can be taken by a weaker econ­omy to pro­tect its prod­ucts against the more com­pet­i­tive prod­ucts of a stronger econ­omy.

An ex­am­ple of such dy­nam­ics is the re­cent ne­go­ti­a­tion be­tween South African and US poul­try pro­duc­ers to open the South African mar­ket in ex­change for in­clu­sion in the African Growth and Op­por­tu­nity Act. The same has ap­plied with Chi­nese pres­sure on South Africa to open its tex­tile mar­ket – with dev­as­tat­ing re­sults.

Be­cause of th­ese neg­a­tive mar­ket dis­tor­tions, the in­te­gra­tion ap­proach that com­mences with a free trade agree­ment should be ques­tioned. If it is dif­fi­cult to im­ple­ment a free trade agree­ment, which serves as a pre­req­ui­site for a cus­toms union, the in­te­gra­tion model’s point of de­par­ture might be in­ap­pro­pri­ate. We have seen how dif­fi­cult this is to es­tab­lish even among smaller group­ings.

SADC adopted its trade pro­to­col in 1996 and amended it in 2005. By its tar­get date of 2008, three mem­bers (An­gola, the Demo­cratic Repub­lic of the Congo and the Sey­chelles) re­mained out­side the agree­ment. Mozam­bique was ex­empted from its im­ple­men­ta­tion in its re­la­tion­ship with South Africa un­til this year. Was Agenda 2063 there­fore not the op­por­tune mo­ment to re­visit the model?

The cur­rent model of re­gional in­te­gra­tion is syn­ony­mous

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