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Tread carefully with demands to renegotiate SACU agreement – trade law experts

Tread carefully with demands to renegotiate SACU agreement – trade law experts

The complications of Brexit is an important reminder that the Southern African Customs Union (SACU), which is also a deeply integrated region, deserves careful appraisal, stated the executive director of the trade law centre, Trudie Hartzenberg, in the centre’s final newsletter for 2018.

“Discussion about a review of SACU (or parts of the SACU Agreement) has been on the cards for some years. Careful scrutiny of what works for each of the partners, investors, producers, traders and consumers, is essential.”

“The smaller member states have ambitions to expand and diversify their industrial structures. South Africa wants to retain policy space, especially as regards the import tariff to support its industrial development plans. All members are facing stringent fiscal challenges.”

“The future of SACU has to be handled very carefully to retain what works, to provide policy space for all to pursue industrial development ambitions and to manage the complex country-level and regional fiscal challenges. And very importantly the tricky issue of decision making among unequal partners in such an arrangement has to be addressed.”

On the African Continental Free Trade Area, Hartzenberg stated “African integration enjoyed a significant resurgence of interest and political support during 2018. The African Continental Free Trade Area (AfCFTA) was the focus of an Extraordinary Summit on 21 March in Kigali, Rwanda.

“The Agreement was tabled for signature on this occasion. Since then more African Union Member States have signed and twelve have now ratified the Agreement. Twenty-two ratifications are necessary for the Agreement to enter into force. At a meeting of the African Ministers of Trade on the sidelines of the first Intra-African Trade Fair, held in Cairo, this past week, several important decisions were taken.”

For the tariff concessions, negotiated market access offers are expected to be adopted by January 2020. The same timeframe applies to Services while Rules of Origin negotiations should be concluded by the middle of next year.

“The Technical Working Group has been directed to meet early in 2019 and provide feedback on the way forward. Phase 2 of the negotiations (investment, competition policy and intellectual property matters) are to be concluded by June 2020. It is now clear that even if (as is likely) the threshold of 22 ratifications is attained by the end of January 2019, when the African Union Assembly meets, there is still important outstanding work,” stated Hartzenberg.


 

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