01 March 2024

Statement by Tswelopele C. Moremi Executive Secretary of SACU at the XXXVII regular meeting of the Common Market Council (CMC) and the Summit of the State Parties of Mercosur and Associated States

23 July 2009, Ascuncion, Paraguay

Your Excellencies, Heads of State of MERCOSUR and Associated States
Your Excellencies Heads of Regional and International Organizations
Your Excellencies, Members of the Diplomatic Corps
Honourable Ministers from MERCOSUR and Associated States
Distinguished Delegates
Ladies and Delegation

I wish to start first of all by taking this opportunity to thank the Government of the Republic of Paraguay for inviting SACU to attend the XXXVII regular meeting of the Common Market Council and Summit of the State Parties of MERCOSUR and the Associated States and for the opportunity to address this distinguished audience on this significant occasion. I also wish to thank the Government of the Republic of Paraguay for the warm hospitality.

Your Excellencies, Honouralbe Ministers, distinguished delegates, having been established in 1910, the Southern African Customs Union (SACU) is the oldest Customs Union in the world, comprising of the Republic of Botswana, the Kingdom of Lesotho, Republic of Namibia, Republic of South Africa, and the Kingdom of Swaziland. In 1994, following the democratic election in South Africa, the SACU Member States took a history decision to renegotiate the 1969 SACU Agreement to reflect the changing political and economic circumstances in the region. This resulted in a new and comprehensive Agreement which was signed in 2002 and implemented since 2004.

The 2002 SACU Agreement sets out a broad framework for enhanced integration arrangement with a legal personality and its key features include the creation of effective and democratic institutions that provide for a joint decision making as well as enhanced economic cooperation through common policy development (Common Industrial Policy and cooperation on Agricultural Policy), competition policy, and a common approach to trade negotiations. The Agreement also provides for a Revenue Sharing Mechanism that calculates on a transparent and predictable basis, revenue shares for all the SACU Member States. Finally, it provides for a SACU Tariff Board to manage the SACU Tariff policy and the SACU Tribunal to deal with dispute settlement.

Honourable Ministers, while, the 2002 SACU Agreement provides a framework for deeper integration beyond trade and marks a watershed in the development of common policies (which is a necessary imperative for eth future development of its Member States) the Southern African Countries find themselves faced with numerous challenges. As you are aware Africa generates only a very small portion of global trade and as a consequence suffers from the associated problems of international marginalization. These challenges have to be faced at a time of a global financial and economic crisis and the specific obstacles for Countries dependent on commodity exports. To address these challenges and the desire for deeper regional integration, SACU is proactively taking steps to consolidate itself by building the remaining institutional structures provided for in the 2002 SACU Agreement and to position it to play a more meaningful role in deepening integration in Southern Africa.

In this regard, Your Excellencies, one of the objectives of the SACU Agreement is to integrate SACU into the global economy through trade negotiations with third parties. This applies to both multilateral and bilateral trade negotiations and is done to ensure the integrity of the Customs Union, specifically the Common External Tariff. The level of macro economic convergence already achieved in SACU provides an important platform from which to further integrate with the rest of the region and the global economy.

In line with the objective of deeper integration into the global trading system, in 2007 SACU was notified to the WTO under Article XXIV of the GATT 1994. The factual review of the Agreement was successfully completed during April 2009.

Your Excellencies, SACU views its relationship with MERCOSUR as highly valuable, as it promotes our stated objective of promoting closer South-South cooperation, aimed at generating greater cohesiveness amongst the Countries of the South. We are therefore very proud that on 3 April 2009 in Maseru, Lesotho at its 18th SACU Council meeting, all the SACU Member States signed the Preferential Trade Agreement between our two regions. We view this Agreement as an important tool to strengthen our trade relations and to enhance economic cooperation between our two regions. SACU and its Member States are fully committed towards achieving the objectives of this Agreement, namely to establish fixed preference margins as a first step towards the creation of a Free Trade Area between MERCOSUR and SACU. We believe that this Agreement will create the necessary conditions to achieve balanced economic growth in our respective regions, while it will also contribute to the development of the smaller economies within our respective Organizations. The SACU Secretariat is now fully engaged with our Member States to ensure that this important Agreement is ratified at the earliest opportunity soon, so that we can reach our target date of 1st January 2010 for implementation.

Against this background our Agreement with MERCOSUR is of particular technical and symbolic significance. It is often said the realities of the present multilateral trade system has demonstrated the limits to South-South solidarity and the ability of developing nations to carve out meaningful trade but have not always succeeded in giving real content and beneficial outcomes to that promise. This Agreement has the potential to prove the critics wrong. For that to happen we should view this Agreement as a starting point and should make deliberate efforts to expand it and to assist each other in its implementation.

Another important new development is that, this Agreement links together two Continents of developing nations and different cultures. Some of the MERCOSUR Member States are considered emerging world leaders; as confirmed by the recent decision to expand the G8 membership. You are active participants in the dispute settlement system of the WTO and in the multilateral trade negotiations. SACU Member States can benefit quite directly from your experience and expertise, perhaps much more than from first world. The extent of our new joint arrangements and the success of our cooperation will depend on how serious and committed we are with regard to the implementation and growth of this Agreement.

Your Excellencies, Honourable Ministers, Distinguished delegates, It is for these reasons that I am particularly pleased to represent SACU at this occasion and to confirm our desire and resolve in SACU to implement this Agreement and to expand it in the spirit of solidarity and the commitment to find solutions to our developmental challenges. I invite you to join us in this task.

In line with our objective of promoting South-South Cooperation, SACU Member States are currently negotiating a Preferential Trade Agreement with India. SACU Member States are also actively participating in the ongoing WTO Doha Development Round of Negotiations, and we regard a successful outcome of the current round of negotiations as crucial in contributing to the achievement of balanced economic development for our region, while also contributing to enhancing economic growth in the developing Countries and the LDCs in particular.

Finally, let me once again thank you for this opportunity to attend this important meeting. We see this as a token for the mutual trust and understanding that exists between our two regions and want to assure you that SACU will do everything within our power to build upon this trust and understanding, thereby ensuring a mutually beneficially relationship between your and our respective Member States.

Last but not least, the year 2010 marks SACU Centenary. We invite MERCOSUR to join SACU Member States in celebrating this historic event.

We wish you successful deliberations.

I thank you.