Boosting regional integration in Africa, the Caribbean and the Pacific

6 July 2015
ITC News

Regional integration continues to occupy the minds of many leaders in Africa, Caribbean and Pacific (ACP) regions, indicating there is significant political will to move this agenda forward. International institutions and agencies are working closely with countries on a range of initiatives to accelerate the process.

The secretariat and members of the ACP Group of States have recognized that integration into the world economy is a stepping stone towards alleviation and eradication of poverty and an effective means of achieving prosperity, peace and security.

The economic benefits of integration are well documented, including the creation of larger markets and new trading opportunities while increasing competition and lowering prices for consumers. It can also help generate greater levels of domestic and foreign investment.

Developing free-trade areas or customs unions which create common markets for goods, people, capital and services is the crust of regional integration. More advanced models go further, introducing a common currency, harmonizing some national legislation and developing common policies.

The rationale behind the creation of the Economic Partnership Agreement (EPA) between the ACP Group and the European Union (EU) was that this too would aid regional economic integration. For example, all African members of the regional EPA grouping would remove tariff barriers with each other, thereby encouraging intra-African and intra-ACP trade. They would then agree on the degree and time-frame for tariff reduction in favour of the EU.

Unfortunately, EPA configurations do not coincide with regional integration groupings currently existing in the ACP. The EPA grouping either incorporated non-members into existing regional groupings, as in the case of the Caribbean Community and Common Market (CARICOM) states plus the Dominican Republic, or they divided or merged regional organizations in the case of Africa.

Furthermore, the customs unions in the process of formation, when completed, will not coincide with EPA groupings, with the only exception being perhaps the East African Community (EAC).Indeed, one existing customs union, Southern African Customs Union (SACU), has some members (Botswana, Lesotho, Namibia, Swaziland and South Africa) in the larger SADC EPA, which also includes Mozambique and Angola.

It is becoming increasingly clear that concluding EPAs with sub-regions or individual countries is likely to have serious negative implications on regional integration among ACP countries. Therefore, the ACP Group has urged the EU to take into account the existing regional trading arrangements in the finalization of the EPA negotiations. This would allow for the rationalization of ACP regional groupings to be completed before full implementation of the comprehensive EPAs is concluded.

The ACP Group is concerned about this situation and in confronting this challenge supports the Africa Union’s efforts to encourage the merger of regional groupings that are closely interlinked. As such, it welcomes and congratulates the three regions of COMESA, EAC and SADC that launched a free trade agreement (FTA) in Sharm el Sheikh, Egypt, on 10 June 2015.

This has been followed by the commencement of negotiations in Johannesburg on a continent-wide FTA. We have also learned of a decision to rationalize the Economic Communities of Central Africa that would include the merger of Economic Community for Central Africa States (ECCAS) and the Central Africa Economic and Monetary Community (CEMAC). This new institution would commence negotiations of an FTA with the Economic Community Of West African States (ECOWAS).

The ACP Group will have a leading role to play in this interregional cooperation as under the ACP-EU cooperation, the two sides recognize the role of regional integration in fostering trade cooperation, peace and security, in promoting growth and in addressing cross-border challenges.

Regional infrastructure; the sustainable management of natural resources; adaptation to climate change; food and nutrition security; and agricultural transformation are additional areas receiving attention.

ACP-EU cooperation also supports national governments, parliaments and non-state actors in matters of regional integration. They contribute to the establishment and fostering of free trade areas and customs unions to help regions to reap the benefit of economies of scale and push the conduct of trade to the top of the development agenda.

Increased activities in ACP regions are being set up to simplify and harmonize national customs systems and procedures, making it easier for goods to cross borders.

The ultimate objective is to enhance and accelerate regional integration in ACP states to meet the aspirations and achieve the goals that the ACP organizations have set for themselves. The ACP Group Secretariat will continue to support regional initiatives whose objective is the sustainable development of ACP economies for the benefits of its peoples.