African Union
Regional Integration
Amar Venugopal
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INDEX
Summary of the Issue.............................................................. 2
Related Legislation.................................................................. 3
Major Aspects of the Issue...................................................... 4-5
Actors and Interests................................................................. 6
Discussion Questions.............................................................. 7
Bibliography/Research Links.................................................. 8
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Summary of the Issue
The African Union’s objectives, broadly speaking, are to foster increased
socioeconomic integration in the continent, as well as to promote human rights,
good governance, and humanitarian aims. The question of regional integration most
directly relates to the first of these mandates. Economic integration is a key tenet of
the African Union, with the stated objective of establishing a common market,
customs union, common currency, and central bank. Such measures pose
interesting questions to the member states involved. Economic integration on such a
scale has many different pros and cons, and can often conflict with the domestic
policies of the member countries. It is therefore a subject of great debate as to what
extent such integration is desired, and what forms it may take. Further, extensive
economic and political integration can also have cultural ramifications, as we have
seen with the recent rise of nationalism in Europe, which many have viewed as
backlash against the pan-European mentality propagated by the European Union.
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Related Legislation
The African Union was founded 2002 following the publication of the Sirte
Declaration in 1999, the resolution adopted by the now-defunct Organisation of
African Unity which ratified the creation of the AU and advocated for the hastening
of the realization of the provisions of the Abuja Treaty. The Abuja Treaty itself
established the African Economic Community and outlined a series of steps for
further economic regional integration, to be completed by 2028. The African Union
itself is governed by the Constitutive Act of the African Union, signed in Lome in
2000. In it, the objectives of the Union are laid out, including to further regional
integration, promoting human rights and democratic institutions, and fostering
economic development. The Constitutive Act also outlines how the African Union
functions with regards to respecting the sovereignty of its member states and its
bureaucratic composition, as well as the fact that given the far-reaching nature of the
decisions taken by the body a ⅔ majority vote is required to adopt substantial
measures.
There is not, however, a great deal of legislation that has been produced by
the African Union with respect to the specific topic of economic integration
because it is considered one of its future goals. Therefore, the most relevant
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legislation on this issue can instead be found by looking at other bodies, most
notably the European Union. There, the choices made by the member states
culminated in the creation of a common market, a customs union, and a central
bank/common currency, with the incorporation of capital mobility and fixed
exchange rates out of the three legs of the trilemma, which is discussed in the
following section. Within Africa, there are also a number of regional trade blocs
already in place, such as COMESA (Common Market for Eastern and Southern
Africa) and AMU (Arab Maghreb Union). Therefore, when deciding on the
existence of a pan-African bloc, the member states will have to determine whether
they wish to incorporate their pre-existing blocs (known as Regional Economic
Communities, which are considered the building blocks of the African Union) into
the resultant single entity.
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Major Aspects of the Issue
The key facets of this issue surround the question of to what extent
integration is desired. First, consider the notion of a common market/customs
union. This would entail the creation of an EU-type trade bloc, with collective
negotiation and a lack of tariffs and duties within the Union. Customs union tend to
favor smaller countries; those that would be unable to gain preferable terms in
bilateral trade negotiations can now “piggyback” off of the more economically
developed countries. The latter nations (developed countries), on the other hand,
can benefit from the free trade within the common market by greatly expanding the
market access of their domestic industries. Next, consider the establishment of a
central bank and, concomitantly, a common currency. This poses an interesting
economic question to the member states, as such an edifice would require the
sacrifice of significant regulatory autonomy. There exists, in economics, a postulate
known as the “trilemma” – that it is economically impossible to simultaneously have
fixed exchange rates, capital mobility, and discretionary monetary policy, all of
which are highly desirable. Countries often have to choose which 2 of these 3
attributes, a choice which greatly varies from one country to another based on their
existing situations. Therefore, the creation of common currency would require
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consensus on what such choice should be made, which is an extremely difficult
thing to achieve. Finally, the effects that increased integration has on a national
identity is an extremely relevant factor to consider, as we have seen in Europe with
the recent rise of nationalist, right-wing rhetoric, arguably growing in response to the
globalist aspect of the EU. The means of preventing this kind of backlash should
also be taken into consideration when forming such a union.
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Actors and Interests
The main actors in this issue are the national government themselves, as they
will have to debate the issues at hand based on their own national interests; for
example, less economically developed countries will push for greater integration
than those which are more economically independent. Corporations and domestic
industries are also key actors here, as they will be directly involved in the creation of
a common market, as they will take advantage of the increased market access or, as
the case may be, contend with increased foreign competition within the customs
union. Finally, international investors are also very relevant actors, as the creation of
a common market, customs union, and/or common currency will have significant
investment ramifications, which can either encourage or discourage international
investment depending on the specific actions taken. For example, the creation of a
common currency will likely foster investment due to more stable exchange rates in
the region, while restricting capital mobility will discourage it due to restricted
access to resources in the specific countries.
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Discussion Questions
1. To what extent/under what conditions, if any, is regional economic integration
desirable?
2. Who benefits from specific regional integration measures; are they skewed
towards certain countries or types of countries?
3. What are the implications of regional integration with relation to cultural
identity? What are the pros/cons in that regard?
4. How will the creation of an economic Union in Africa impact countries
outside the region? What are the global ramifications?
5. To what extent is the European model transferable to other regions of the
world? Is such a system ideal and/or sustainable?
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Bibliography/Research Links
"AU in a Nutshell." African Union . N.p., n.d. Web. 05 May 2017.
<https://www.au.int/web/en/history/oau-and-au>.
"Common Market." Business Dictionary, n.d. Web. 05 May 2017.
<http://www.businessdictionary.com/definition/common-market.html>.
"Customs Union." Glossary of Statistical Terms. Organisation for Economic
Co-operation and Development , n.d. Web. 05 May 2017.
<https://stats.oecd.org/glossary/detail.asp?ID=3130>.
Heijmans, Philip. "Central Europe's Hard Turn to the Right." U.S. News & World
Report, 29 Sept. 2016. Web. 05 May 2017.
<https://www.usnews.com/news/best-countries/articles/2016-09-29/in-central-europ
e-a-nationalist-turn-to-the-right>.
Pazzanesse, Christina. "In Europe, Nationalism Rising." Harvard Gazette, 27 Feb.
2017. Web. 05 May 2017.
<http://news.harvard.edu/gazette/story/2017/02/in-europe-nationalisms-rising/>.
"Regional Economic Communities." United Nations Economic Commission for
Africa, n.d. Web. 05 May 2017.
<http://www.uneca.org/oria/pages/regional-economic-communities >.
Rosa, Samuele. "Definition of Currency Union." Currency Union Technical Expert
Group . IMF Committee on Balance of Payments Statistics, May 2004. Web. 5 May
2017. <https://www.imf.org/external/np/sta/bop/pdf/cuteg1.pdf>.
Organization of African Unity. Constitutive Act of the African Union . Lome: n.p.,
2000. Web. 5 May 2017.
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<http://www.un.org/en/africa/osaa/pdf/au/constitutive_act_african_union_2000.pdf
>.
Organization of African Unity. Sirte Declaration . Sirte: n.p., 1999. Web. 5 May
2017. <http://www.au2002.gov.za/docs/key_oau/sirte.pdf>.
"The Mundell-Flemming Trilemma." The Economist, 27 Aug. 2016. Web. 05 May
2017.
<http://www.economist.com/news/economics-brief/21705672-fixed-exchange-ratemonetary-autonomy-and-free-flow-capital-are-incompatible>.