Regional Integration and the BIC:
Paper only or practical implications
for businesses?
Regine Qualmann GFA Group
Adviser to SADC Secretariat
_________________________________________________________________________________
GTZ Seminar on Strategies towards an enabling BIC
Magaliesburg 22-25 May 2006
I. Structure of Presentation
• The policy framework for investment at the
regional level: International trends and practices
• SADC policy instruments for an improved BIC:
The Trade and the Finance and Investment
Protocols – Progress and limitations
• Practical experiences and challenges of advising
on regional policy instruments
_________________________________________________________________________________
GTZ Seminar on Strategies towards an enabling BIC
Magaliesburg 22-25 May 2006
II. Policy framework at the
regional level: International
trends and practices
• Regional preferential trade and investment
agreements are proliferating throughout the world
• African countries are all members of one or more
regional PTA
• Increasingly, African countries also have bilateral
investment and/ or double taxation agreements
• While the majority of bilateral investment or double
taxation agreements are of a North-South type,
PTIAs are increasingly South-South (73 in 2004)
_________________________________________________________________________________
GTZ Seminar on Strategies towards an enabling BIC
Magaliesburg 22-25 May 2006
II. Policy framework at the
regional level (cont.)
• Regional preferential trade and investment
agreements (PTIAs) aim at facilitating trade and
investment through (usually non-binding)
commitments to liberalize, promote and/ or protect
investment
• PTAIs in Latin America are most far-reaching in
scope covering national and MFN treatment as well
as expropriation and dispute settlement provisions
• ECOWAS and COMESA are currently embarking
on defining a more substantive set of policy
measures
_________________________________________________________________________________
GTZ Seminar on Strategies towards an enabling BIC
Magaliesburg 22-25 May 2006
SADC Objectives
r
Customs
Union
FTA
2008
2010
Common*
Market
2015
SADC
Central
Bank
2016
Monetary
Union
2016
Regional
Currency
2018
*REGIONAL COMMON MARKET = Free movement of capital, labour,
goods and services
_________________________________________________________________________________
GTZ Seminar on Strategies towards an enabling BIC
Magaliesburg 22-25 May 2006
III. SADC Policy Instruments
for an improved BIC
(1) The SADC Protocol on Trade
•
Provides for the creation of an FTA by 2008 – 85% of trade in
goods to be duty free
•
Individual tariff phase-downs are slipping in several cases
•
Rules of Origin remain a problem, especially regarding
access to the SA/ SACU market
•
A mechanism to monitor and eliminate NTBs yet to be
established
•
Liberalization of trade in services: Work in progress
•
Progress in goods and services market integration has been
very limited in SADC
_________________________________________________________________________________
GTZ Seminar on Strategies towards an enabling BIC
Magaliesburg 22-25 May 2006
III. SADC Policy Instruments
for an improved BIC (cont.)
(2) The SADC Protocol on Finance and Investment
• To be signed and ratified in 2006 with several MoUs
under implementation – not investment
• Covers a broad number of areas, including:
- co-operation on investment and on taxation
- macro-economic convergence
- regional capital and financial market development
and co-operation
- co-operation among SADC Central Banks
_________________________________________________________________________________
GTZ Seminar on Strategies towards an enabling BIC
Magaliesburg 22-25 May 2006
III. SADC Policy Instruments
for an improved BIC (cont.)
(2) The SADC Protocol on Finance and Investment
(cont.)
• Development of the FIP through a bottom-up
approach (MoUs) to avoid mistakes of the Trade
Protocol
• MoUs being implemented voluntarily but FIP
implementation will need to be preceded by
translation into national laws
• More institutions and sub-structures involved than
in trade – but again little direct involvement of
private sector
• Necessary to complement trade liberalization
_________________________________________________________________________________
GTZ Seminar on Strategies towards an enabling BIC
Magaliesburg 22-25 May 2006
IV. Practical experience and
challenges
• Trend is towards higher commitment of policy on
trade and investment related measures but African
RECs are lacking both in scope and depth
• SADC Member States particularly reluctant to
commit themselves and follow-up implementation
at regional level
• Example: Ongoing EPA negotiations are unlikely to
cover New Generation Issues – investment,
competition, public procurement, etc.
• SA pursues a national (and a multilateral) strategy
which are not always compatible with the region
_________________________________________________________________________________
GTZ Seminar on Strategies towards an enabling BIC
Magaliesburg 22-25 May 2006
V. Some conclusions and
implications for GTZ work
•
Regional Organisations in Africa have embarked on a much
larger integration agenda than just trade but …
•
most are too weak to live up to their co-coordinating and
facilitating role
•
Policy making at regional level is an important entry point for
both Governance Reform and Economic Liberalization and
Development Programs
•
Role of advisers mainly of an OD plus type
•
Exchange of experience across RO advisory programs needs
strengthening – but they currently lack scale!
•
High potential for development of tools to monitor
implementation and impact of integration
_________________________________________________________________________________
GTZ Seminar on Strategies towards an enabling BIC
Magaliesburg 22-25 May 2006
Thank you for your attention!
Regine Qualmann
[email protected]
_________________________________________________________________________________
GTZ Seminar on Strategies towards an enabling BIC
Magaliesburg 22-25 May 2006