The Trade Law Centre for Southern Africa (tralac) would like to make the following brief submission. It deals with some of the technical implications and if required we could elaborate on them during the oral hearings.

• South Africa has already adopted a new International Trade Administration Act for the purposes of implementing the SACU Agreement of 2002 and to provide for new and effective trade remedy measures. Presumably the same will have to be done in the other member countries. The new SACU institutions can only function effectively if supported by adequate domestic institutions in each of the member countries. For example, Article 41 of the new Agreement provides for "Policies and instruments to address unfair trade practices between member states. These policies and measures shall be annexed to this Agreement." Article 42 then makes provision for the development of such Annexes that will "form an integral part of this Agreement." Article 22 of the Agreement provides that Member States, except as otherwise provided in the Agreement, "shall apply similar legislation with regard to customs and excise duties." The implication is that all these governments will have to implement, in their jurisdictions, similar legislation and standards.
• The same outcomes will have to be ensured for all member states. This further illustrates the need for sufficient and modern capacity. Provision will have to be made for this technical need to be adequately addressed. If this does not take place, the objectives of this Agreement may be directly undermined. The consequences will not be limited to only this particular Agreement but will impact on the broader regional and global trade picture.
• The future trend appears clear. The implementation of the new SACU Agreement will depend on new developments and the adoption of Annexes dealing with a number of technical issues. This need will only increase as integration in SACU continues to cover new areas such as services, investment, standards and intellectual property matters in future.
• The revenue pool will function on a completely new basis. South Africa will now share in terms of the basic distribution formula; it will not be entitled to only the residue of the pool. The administration of the revenue pool will be a potentially complicated matter.

• Section 231 of the Constitution of South Africa provides for the negotiating, signing, approval and ratification of international agreements. It also deals with the implementation of such agreements domestically and explains how international agreements become part of the law of the land.
• The implementation of the SACU Agreement will very directly depend on the exercise certain powers by the new suprar-national SACU institutions; as well as the domestic implementation of the Agreement and its Annexes in the municipal legal systems of the member states. It will be an ongoing process and further legal instruments (Annexes) will have to be adopted from time to time.
• It is important to set this process in motion by obtaining the approval of Parliament for this Agreement now. Once approval is granted and all member states have ratified the Agreement, it will enter into force on the inter-state plane. Thereafter its implementation will directly depend on the quality of domestic institutions and legislation as well as the work of the new SACU institutions.
• The South African Parliament has to exercise certain constitutional obligations with respect to international agreements. It also has to cooperate with the National Executive on the implementation of such agreements. It is in this light that the Agreement is to be understood as a framework agreement and subsequent Annexes and other legal instruments will be developed from time to time. They too have to be implemented via domestic legislation and in this regard section 239 of the Constitution and the general public law requirements with respect to the need for the Executive to act in terms of the enabling provisions of empowering legislation (the intra vires principle) are relevant. This will call for close cooperation between the National Executive and Parliament.

• SACU is at present engaged in negotiations for the conclusion of Free Trade Agreements with other states and regional trade blocs, such as the United States of America, EFTA, Mercosur, and intends to begin negotiations with India and China in the near future.
• These negotiations cover, in addition to trade in goods, areas such as trade in services and investment. At present the SACU Agreement does not have jurisdiction over such areas. This could result in complicated technical matters such as overlapping agreements and bilateral legal relationships between the member states of SACU and the third party involved in the FTA. It is obvious that this could impact quite directly on SACU’s own regional integration agenda and the future working of the new SACU institutions.
• The South African Department of Trade and Industry is playing a leading role in these negotiations and are aware of these technical requirements and issues.
• When Free Trade Agreements with third parties are concluded, Parliament will again have to exercise its powers and oversight function under section 231 of the Constitution. It is submitted that this bigger picture will involve Parliament over a wide area and that the inter-relationships between the various agreements will have to be monitored. These developments take place against the background of other important trade negotiations such as those in the WTO and the Economic Partnership Agreements which the European Union is in the process of negotiating with 77 ACP countries; including the 4 other member states of SACU. The exact format of an EPA for Southern Africa and the relationship with the Trade Development and Cooperation Agreement that South Africa has already concluded with the European Union, are matters still to be studied.
• These facts are mentioned here in order to emphasize the important oversight function of Parliament with respect to an area of increasing technical sophistication and overlap as well as the need for close cooperation with the National Executive.
• The final observation concerns the very clear need with respect to capacity and technical know-how which will be required in various government departments in all the Southern African states involved. It will be necessary to plan for these developments in advance, create the necessary legal frameworks and allocate the funds and programmes to ensure that these agreements will indeed be implemented and that they will achieve the stated economic and developmental goals within the bigger context of the global economy.

Prepared by

14 November 2003