EPA Review Annex Documents - DFID

to be seen. The Ethiopia case study conducted in this report draws conclusion that ’the ESA
region has become much more disintegrated since the EPA process started. The divisive
nature of the EPA process to date suggests that the prospects of integration process after
the EPA may be difficult or worse. It is not easy to come to consensus when negotiating as a
large group especially with vast and varying interests’.
Southern Africa EPA group:
Southern African EPA group consists of some members of SADC and all members of SACU.
SADC, Southern African Development Community has 13 members including Angola,
Botswana, the Democratic Republic of the Congo, Lesotho, Malawi, Mauritius, Mozambique,
Namibia, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe. SADC has pursued
different approach to regional integration relative to COMESA. It focused on relaxing the
supply side constraints to trade through regional cooperation in various sectors, such as
infrastructure, agriculture, transportation and human resources. In 2000, it launched a FTA
and 11 members opted for participating in a free trade area (Angola and Democratic
Republic of Congo not in FTA). Member countries agreed to liberalise 85% of intra-SADC
trade by 2008 and liberalise sensitive products by 2012. SADC, a free trade area came into
effect on January 2008. 153
There is concern that SADC tariff reductions have been back-loaded and slow. Another
issue is that over time the rules of origin have become restrictive and more product specific
under pressure from member states. The complicated and restrictive rules of origin are
increasing costs of administration and make it difficult for exporter to take advantages of
SADC preferences. Interestingly, there is an attempt to improve polarisation effects on LDC
members of SADC through non-reciprocal market access in sugar and more relaxed rules of
origin in textiles. The agreement also includes provisions for protection of infant industries
and anti-dumping and safeguard measures and agreement calls for elimination of NTBs and
services liberalisation, but on neither front has there been much progress. There is no
institutional mechanism for reporting NTBs or resolution of disputes. Implementation of the
protocol in terms of meeting liberalisation commitments on merchandise trade has been
uneven with many countries like Tanzania, Zambia and Zimbabwe lagging behind. Active
areas of cooperation where there has been progress include training and capacity building in
central banks, development and harmonisation of payments, clearing and settlement
systems. However, there is still concern that SADC is more of a political block than a true
instrument for regional economic integration (Yang and Gupta, 2005).
In March 2004, SADC announced the plan of establishment of a SADC customs union and
implementing a common external tariff by 2010; a common market by 2012, and
establishment of a SADC central bank and preparation for a single SADC currency in
2016. 154 The structure of the SADC customs union mirrors that of SACU – South Africa
Customs Union including Botswana, Lesotho, Namibia, South Africa and Swaziland. An
important feature of SACU is revenue sharing arrangement. SACU tariff structure is
complex, consisting of ad valorem, specific, mixed, compound, formula duties based on
reference prices and other duties and charges. The ad valorem duties cover around threefourths
of tariff lines and compromise 39 bands ranging between 0% and 55% (Edwards and
Lawrence, 2008). The specific, mixed, compound and formula duties and other charges
cover an important set of agricultural and agro-industrial products and apparel. While SACU
has harmonised applied tariffs, exercise duties, custom valuation, rules of origin and
contingent trade remedies, not much else has been harmonised.
153
SADC wanted to conclude the EPA before the establishment of CET, however, the EU preferred to
have CET first.
154
Like many other grand plans of regional integration in Africa, it remains to be seen whether this is
going to implemented, functional and effective.
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