INTERNATIONAL BUSINESS MANAGEMENT

GROUP 7

TRADE BLOCKS IN AFRICA

TRADE BLOCS 

A trade bloc is a type of intergovernmental agreement, often part of a regional intergovernmental organization, where regional barriers to trade (tariffs and non-tariff barriers) are reduced or eliminated among the participating states

SOUTH AFRICAN DEVELOPMENT COMMUNITY
Established : Summit of Heads of State and Government 17 August 1992 Windhoek, Namibia.

Secretariat

: Goborone, Botswana

Population size : 257, 726,000 (257.7 Million inhabitants) GDP : 471,118 US$ billion (471.1 US$ billion)

MALAWI BOTSWANA DRC ANGOLA MAURITIUS LESOTHO MEMBER NATIONS MOZAMBIQUE MADAGASCAR SEYCHELLES SOUTH AFRICA SWAZILAND NAMIBIA TANZANIA ZAMBIA ZIMBABWE .

so that the region emerges as a competitive and effective player in international relations and the world economy. and durable peace and security. . freedom and social justice and peace and security for the people of Southern Africa.VISION AND MISSION OF SADC Vision: A common future. good governance. deeper cooperation and integration. improvement of the standards of living and quality of life. a future within a regional community that will ensure economic well-being. Mission: To promote sustainable and equitable economic growth and socioeconomic development through efficient productive systems.

INSTITUTIONS OF SADC          The Summit of Heads of State & Government SADC Tribunal Council of Ministers Organ on Politics Defense & Security Cooperation Sectoral/Cluster Ministerial Committees SADC Secretariat Standing Committee of Senior Officials SADC National Committees .

DIRECTORATES OF SADC       Directorate of Politics. Finance and Investment (TIFI) Directorate Infrastructure and Services (I&S). Directorate of Food Agriculture and Natural Resources (FANR) Directorate of Social and Human Development and Special Programmes (SHDSP) Directorate of Policy Planning and Resource Mobilization (PPRM) . Industry. Defense and Security Cooperation (PDSC) Directorate: Trade.

SADC s FREE TRADE AREA Supports:  Common political interests  Greater trade and investment flows between Member States Targets:      A Free Trade Area: 85% of trade in goods will be free by 2008 Completion of negotiations of the SADC Customs Union by 2010 Completion of negotiations of the SADC Common Market by 2015 SADC Monetary Union and SADC Central Bank by 2016 Launch of a regional currency by 2018 .

IMPORT DUTY TARIFF PHASE DOWN SCHEDULE       Category A .Sensitive goods Category E .Exclusion list .Immediate liberalisation Category B .Gradual liberalisation Category C .TRADE BARRIERS NON-TARIFF BARRIERS TARIFF BARRIEERS .

THEMATIC COORDINATION       Networking/confidence-building Exchanging ideas and enhancing dialogue Exchanging and disseminating information Coordinating activities Resource mobilization Joint Financing & Technical Cooperation Arrangements .

SADC-ICP COOPERATION & THEMATIC GROUPS .

East African Community (EAC) EAC is the regional intergovernmental organization of the Republics of Kenya Uganda Rwanda Burundi The United Republic of Tanzania Headquarters : Arusha. Tanzania. .

CMA(Common Monetory Area) Ram kumaran Ganeshan .

. Of the SACU members only Botswana is currently out of the CMA. Namibia and the Kingdoms of Swaziland and Lesotho into a single monetary union.CMA    Links South Africa. It is allied to the Southern African Customs Union (SACU).

(South African Reserve Bank) .Monetory Union  Two or more countries    with a single currency. or different currencies (Rand) having a fixed mutual exchange rate monitored controlled by one central bank (or several central banks with closely coordinated monetary policies).

originated from the Rand Monetary Area (RMA). enacted in July 1986. which was established in December 1974.CMA(Common Monetory Area)  The CMA. Based on (Multilateral Monetory Agreement)MMA signed in February 1992  .

There are no exchange control restrictions between these countries.CMA(contd)  Similar exchange control measures are applied by each country in respect of all countries outside the CMA.  .

Describing the monetary arrangements in the CMA. 2. 3. . Sustained economic development of the CMA with special emphasis on the advancement of the less developed member states .Objective of MMA 1. The acquisition of equitable benefits for all members.

. Maintenance of foreign reserves. Movement of Funds within the CMA. Gold and Foreign Exchange Transactions.Salient features        Currency Arrangements. Compensation Payments. Consultation and other Provisions. Access to South African Financial Markets.

the other member states are entitled to issue their own national currency.Currency Arrangements     rand serves as legal tender Widely used and accepted in the participating countries. These currencies serve as legal tender only in the issuing country. Under the terms of the MMA. .

the lilangeni. in 1974 Lesotho introducing the loti in 1980 Namibia -Namibian dollar in 1991   .Local currencies  Swaziland issued its national currency.

Compensatory Payments  Government of South Africa must make compensatory payments to the other contracting parties.  . South Africa compensates them for forgone seigniorage.

subject to relevant financial laws and policies applicable to counterparts in South Africa.  .No restrictions on the transfer of funds   For current or for capital purposes On of the major benefits that the smaller states can derive from membership Institutions in the public and private sector.

This is less true for labour mobility. .    as normal immigration procedures and requirements are in place among the CMA members.All members belong to the SACU  Including Botswana Capital and goods are highly mobile across the CMA region.

exchange rate with the rand. Namibia and Swaziland depend heavily on trade with South Africa. a major benefit from the CMA arrangements is the fixed and predictable exchange rate with the rand  .  As Lesotho.

Gold and Foreign Exchange Transactions. and are responsible for doing so.   exchange control regulations to be in all material aspects similar to those in effect in South Africa.  LNS countries have the right  to authorize foreign transactions of local origin. There are no exchange restrictions on current international transactions .

The terms and timing of such issues are subject to consultation and agreement with the South African government.    access to the South African capital and money markets.Access to South African Financial Markets. but only through prescribed investments or approved securities that can be held by financial Institutions in South Africa. .

to or from any member country.Movement of Funds within the CMA.  no restrictions can be imposed on the transfer of funds. . whether for current or capital transactions.

  reconciling the interests of member countries on common issues pertaining to monetary and foreign exchange policies. .Consultation and other Provisions.  Established a commission in which each of them has one representatives. The commission holds regular consultations at least once a year.

.EAC The treaty for establishment of the East African Community was signed in 1999 and it entered into force in 2000 following its ratification by the Partner States.

Mission & Vision of EAC Vision A prosperous. . competitive. Social and Culture integration in order to improve the quality of life of the people of East Africa through increased competitiveness. secure. Political. trade and investments. stable and politically united East Africa Mission To widen and deepen Economic. value added production.

The EAC's core values      Professionalism Accountability Transparency Team work Unity in diversity .

Organs of the EAC The main organs of the EAC are       The Summit of Heads of State The Council of Ministers The Co-ordination Committee The East African Court of Justice The East African Legislative Assembly The Secretariat. .

common customs procedures. .Economic dimensions Importance of the customs union    a Common External Tariff (CET) on imports from third countries. duty-free trade between the member states.

EAC achievements  Implementation of tariff reduction whereby Kenya applies 90%. Tanzania and Uganda 80% tariff reductions Removal of all NTB¶s on cross border trade  MARKET SIZE The internal EAC market has about 125 million consumers. .

Measures to enhance trade       The customs union protocol Trade facilitation Competition policy and law Re-export of goods Removal of Non-tariff barriers to trade Standards and measures .

Has cooperation accords with UN specialized agencies such as WHO.SAD  The Community of Sahel-Saharan States. UNESCO.    . etc.a framework for integration allowing free movement of people and goods across the vast and mostly poor region.CEN. Aims at making the area occupied by the member states. a free trade area. CEN-SAD . CEN-SAD gained observer status at the UN General Assembly in 2001.

Member Countries    Established in 1998 with 6 members. membership has grown steadily to 25 members now CEN-SAD. and efforts are being made to harmonize its programme with that of the latter. . However. also includes ECOWAS Member States.

SAD Summits   . Countries including Senegal. Differences between neighbors Chad and Sudan were reconciled at the regional summit in Libya 2007. and still more are in the process of joining the Organization. CEN. Djibouti joined during the N djamena Summit in 2000. The Central African Republic and Eritrea joined the Community during the first Summit in April 1999.

based on strategy through a development plan complementary to national development. Right of establishment.   . The removal of all restrictions hampering integration of member countries. ownership and exercise of economic activity.Key Objectives  Establishment of global economic union.

Key Objectives  Free trade. movement of goods. Promotion of external trade through an investment policy in Member States. Granting nationals of the signatory countries the same rights. commodities and services originating from the signatory countries. advantages and obligations granted to their own citizens   .

SOUTH AFRICAN CUSTOMS UNION .

ABOUT SACU MEMBER STATES The Governments of the Republic of Botswana. FUNCTION It plays a role in promoting regional integration and the economic development of all its Member States . Kingdom of Lesotho.. Republic of South Africa and Kingdom of Swaziland . Republic of Namibia.

VISION An economic community with equitable and sustainable development. . dedicated to the welfare of its people for a common future.

industrial and economic diversification. the expansion of intra regional trade and investment. To promote sustainable economic growth and development for employment creation and poverty reduction. and global competitiveness. harmonization and convergence to meet the development needs of the region.MISSION    To serve as an engine for regional integration and development. To build economic policy coherence. .

. effective customs controls.. To develop common policies and strategies for areas such as trade facilitation.    To serve as a building block of an ever closer community among the peoples of Southern Africa. and competition. transparent and democratic institutions and processes. . To develop effective.MISSION contd.

STRUCTURE OF SACU .

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SACU AGREEMENTS 2002 2. 1910 1. . 1969 3.

To promote conditions of fair competition in the Common Customs Area. To substantially increase investment opportunities in the Common Customs Area.OBJECTIVES OF SACU The objectives of SACU as contained in Article 2 of the 2002 SACU Agreement are:     To facilitate the cross-border movement of goods between the territories of the Member States. . transparent and democratic institutions which will ensure equitable trade benefits to Member States. To create effective.

industrialization and competitiveness of Member States.OBJECTIVES contd . excise and additional duties levied by Member States. and To facilitate the development of common policies and strategies . To facilitate the equitable sharing of revenue arising from customs.     To enhance the economic development. diversification. To promote the integration of Member States into the global economy through enhanced trade and investment.

1. . 5.SACU INSTITUTIONS SACU Institutions are contained in Article 7 of the 2002 SACU Agreement and include the SACU Council of Ministers The Secretariat. 7. 2. 6. 4. The Commission National Bodies A Tariff Board Technical Liaison Committees Tribunal. 3.

CONCLUSION THE SACU IS OBSERVING ITS CENTENARY YEAR THIS YEAR. IT WAS FORMED IN 1910. TILL NOW IT HAS STOOD THE TEST OF TIME AND FUNCTIONED EFFECTIVELY IN REGULATING TRADE AND ECONOMICS AMONG ITS MEMBER NATIONS .