The problems caused by overlapping memberships

A question that arises is: does the overlap lead to a loss of efficiency and accordingly call for reconfiguration of the sub-regional grouping to ensure that they serve as building blocks?²⁹⁶ This is a matter of debate across the region. Some writers contend that the overlap contributes to progress, while others argue that multiplicity of membership hinders regional integration as it leads to duplication of efforts.²⁹⁷ There may also be conflicts of interests;²⁹⁸ the overlap tends to run counter the regional goals and leads to counter-productive or unhealthy competition among countries and institutions.²⁹⁹

Multiple memberships give rise to complexities and concerns in relation to tariffs, rules of origin³⁰⁰ and procedures for such countries and the region as this is not in line with the

Mano River Union (MRU), the Central African Economic and Monetary Community (CEMAC), the Economic Community of Great Lakes Countries (CEPGL), Common Market for East and Southern Africa (COMESA), the East African Community (EAC), Inter-Governmental Authority on Development (IGAD), the Indian Ocean Commission (IOC) and Community of Sahel-Saharan States (CEN-SAD).

294 26 of Africa’s 54 countries are members of two regional economic groupings, and 20 are members of three economic groups. The Democratic Republic of Congo belongs to four groupings. Only 6 countries maintain membership of just one regional grouping: UNECA Assessing regional integration in Africa I 40. Examples of states that have multiple memberships are: East Africa, Kenya and Uganda are members of both the EAC and COMESA, whereas Tanzania, also a member of the EAC, left COMESA and joined SADC in 2001.

The challenges that arise due to multiple memberships are that it can be confusing; creates duplication and sometimes competition in activities; it also places additional burdens on the personnel as foreign affairs staff has to attend all the various summits and other meetings.

295 Admin ‘Overlapping trading blocs stand in the way of Africa’s integration’ (11 October 2010) available at http://www.trademarksa.org/print/2107 (accessed 30 June 2011).

296 UNECA Assessing regional integration in Africa I 39.

297UNECA Assessing regional integration II xiii and xvii. Also available at

http://new.uneca.org/Portals/aria/aria2/chap6.pdf (accessed 15 February 2012. Of the 12 major programmes related to trade facilitation and trade and market integration, being undertaken by the regional economic communities in West Africa for example, there is duplication in at least 9 of them.

298 Member States in different uncoordinated regional economic blocs implement conflicting or incompatible integration programmes that are at variance with the level of liberalisation achieved by the state concerned:

Dlagnekova (2009) 15-1 Fundamina 14. Conflicts may also arise from multiple memberships in blocs that have similar mandates but different modalities for achieving those mandates: Kritzinger-van Niekerk &

Moreira ‘Regional Integration in Southern Africa: Overview of recent developments’ xiii.

299 Geda & Kebret (2008) 17 -3 Journal of African Economies 361.

300 Rules of origin relates to the criteria needed to determine the national source of a product which determines whether imported products should receive most-favoured-nation (MFN) treatment or preferential treatment:

envisaged continental-wide integration.³⁰¹ It is mostly members of both SADC and COMESA that are increasingly facing confusing and conflicting situations as the respective integration agendas deepen.³⁰² One of the problems is that traders have to operate within a number of trade regimes each with its own tariff rates, rules of origin and procedures.³⁰³ The risk of trade deflection³⁰⁴ becomes unfortunately high as goods that have been preferentially³⁰⁵ imported from a country like Malawi (a member of both SADC and COMESA)³⁰⁶ are subsequently preferentially re-exported to say SA (a member of SADC and SACU). Van-Niekerk and Moreira assert that the official barriers to trade become very porous in such situations.³⁰⁷ When official barriers are permeable or porous, products are bound to be imported and exported across borders without the necessary tariffs being imposed. The difficulty that this creates is a reduction in income derived from tariffs that could affect government budgets.

Memberships in regional communities also place an onerous burden on the Member States which have to meet multiple financial obligations, negotiate varying trade regimes, as well as cope with different meetings, policy decisions, instruments, procedures and schedules.³⁰⁸

WTO ‘Technical information on rules of origin’ available at

http://www.wto.org/english/tratop_e/roi_e/roi_info_e.htm (accessed 20 October 2013).

301 Ndomo ‘Regional economic communities in Africa: A progress overview’ A study commissioned by GTZ (2009) 10.

302 Kritzinger-van Niekerk & Moreira ‘Regional integration: Concepts, advantages, disadvantages and lessons of experience’ (May, 2005) 2 available at http://www.sarpn.org

/documents/d0001249/P1416-RI-concepts_May2005.pdf (accessed 15 February 2012).

303 Yimar ‘Retaining COMESA by uniting the EAC with COMESA to create a single regional integration agenda’ TRALAC (2011) 17 available at

http://www.tralac.org/wp-content/blogs.dir/12/files/2011/uploads/Yimer_Final_20110621_edu.pdf (accessed 25 January 2013).

304 Trade deflection involves trans-shipment of goods or services through a preference-holding country in order for it to obtain a margin of preference available under the preference trade agreement. It is meant to take advantage of preferences: Gibbons ‘Rules of origin of the EU’s preferential trade agreements with special reference to the EU-ACP Economic Partnership Agreements’ in Ngangjoh-Hodu & Matambalya (eds) Trade relations between the EU and Africa: Development, challenges and options beyond the Cotonou Agreement (2010) 75.

305 Preferential or special treatment is given to goods being imported or exported from Member States of an economic bloc.

306 Due to the EPA process, Malawi will be forced to choose one economic group and that decision is dependent on political, economic, social cultural and geographical factors: United Nations Economic Commission for Africa (UNECA) ‘Malawi’s dual membership in SADC and COMESA’ (2007) 1 available at

http://repository.uneca.org/bitstream/handle/10855/3593/Bib.%2028720_I.pdf?sequence=1 (accessed 25 January 2013).

307 Whilst it is technically possible for the COMESA and SADC FTAs to co-exist, it will be impossible for any Member State to belong to more than one regime when (if) they adopt a Common External Tariff (CET) and become a Customs Union (CU), unless each regime adopts the same CET and the same CU regulations.

Kritzinger-van Niekerk & Moreira ‘Regional Integration in Southern Africa: Overview of recent developments’ Discussion Paper Regional Integration and Cooperation Africa Region The World Bank (2002) 2.

308 Erasmus & Hartzenberg The Tripartite Free Trade Area-Towards a new African integration paradigm?

Trade Law Centre for Southern Africa (Tralac) (2012) 14. Also available at  

Multiple memberships may increase both direct and indirect membership costs and participation within the respective blocs placing a burden on limited institutional capacities and resources.³⁰⁹

Overlapping membership has serious implications for the private sector in that it increases the costs of doing business by denying producers economies of scale that come with large scale production. It also raises freight costs and slows down business by imposing numerous paperwork requirements.³¹⁰ The Coca-Cola Company currently operates 163 processing plants in Africa’s 54 countries, but would need half the number if the continent was a single free trade area.³¹¹ Although one may argue that the reduction of the number of processing plants would result in job-loss, regional integration is expected to attract more investments that should create more jobs. The goods also become cheaper as the cost of doing business is reduced. This means that regional integration can improve the welfare of the people. The costs of having 163 processing plants are unfortunately borne by consumers.

Another challenge multiple memberships poses is that customs officials have to apply different tariff reduction rates, rules of origin and trade documentation. Different procedures which involve a lot of paperwork run counter to the trade liberalization goals of facilitating and simplifying trade.³¹²

Clearly, the issue of overlapping memberships of sub-regional bodies and the conflicting obligations should be addressed urgently. The overlapping integration arrangements ³¹³are

http://www.tralac.org/files/2012/05/TFTA-towards-new-African-integration-paradigm-20120419-finalweb.pdf (accessed 7 February 2013), hereafter Erasmus & Hartzenberg The Tripartite Free Trade Area-Towards a new African integration paradigm? 14. See also Kritzinger-van Niekerk & Moreira ‘Regional Integration in Southern Africa: Overview of recent developments’ xiii.

309 Kritzinger-van Niekerk & Moreira ‘Regional Integration in Southern Africa: Overview of recent developments’ 4.

310 Business Daily ‘Overlapping trading blocs stand in the way of Africa’s integration’ (11 October 2010) available at http://www.businessdailyafrica.com/-/539552/1030870/-/6sn4c2z/-/index.html (accessed on 30 June 2011) and Erasmus & Hartzenberg The Tripartite Free Trade Area-Towards a new African integration paradigm? 14.

311 Business Daily ‘Overlapping trading blocs stand in the way of Africa’s integration’ (11 October 2010) available at http://www.businessdailyafrica.com/-/539552/1030870/-/6sn4c2z/-/index.html (accessed on 30 June 2011)

312 The WTO main goal is to simplify trade by eliminating trade barriers; its goal is to ensure that trade flows smoothly, predictably and freely as possible: WTO ‘The WTO in brief’ available at

http://www.wto.org/english/thewto_e/whatis_e/inbrief_e/inbr00_e.htm (accessed 25 January 2013)

313 For example the Democratic Republic of the Congo, Burundi and Rwanda are members of four different regional economic communities: Adebajo & Whiteman (eds) The EU and Africa from Eurafrique to Afro-Europa (2012) 101.

clear manifestations of a lack of coherence and coordination in the integration process.³¹⁴ Coordination of these sub-regional economic groups is essential to making them serve as building blocks to regional integration.³¹⁵

The AU needs to develop a relationship with the sub-regional organisations so they can work towards achieving its stated objectives in terms of the Constitutive Act, such as achieving greater unity and solidarity among African States and accelerating Africa’s economic, social and cultural integration.³¹⁶ One of the reasons why the Organisation of African Unity (OAU) partly failed was due to the Charter of the OAU’s failure to clarify the relationship with the sub-regional organisations, formally known as Regional Economic Communities (RECs).³¹⁷ Lack of coordination between the AU and sub-regional organisations is problematic since it leaves the sub-regional organisations pursuing their own identities, and interests.³¹⁸ The convergence of economic groups is important because it eliminates unnecessary overlaps that result in duplication of activities³¹⁹ and that tends to dissipate collective efforts towards the common goal of the AU. Moreover, it tends to muddy the goals of integration and leads to counterproductive competition among countries and institutions.’³²⁰

Rationalisation of the multiple regional groupings is urgently needed.³²¹ The Constitutive Act acknowledges the importance of sub-regional blocs in the attainment of the AU objectives and aims to ‘coordinate and harmonise policies between existing and future’ blocs.³²² The AU commission must, therefore, streamline the work of the RECs, develop a consciously structured process of interaction and exchange among the regional communities.³²³ The AU Commission should also achieve effective synergies between the regional economic

314 UNECA Assessing Regional Integration in Africa (ARIA II): Rationalising regional economic communities (2006) 39.

315 The fourteen existing African sub-regional blocs should not be seen as a problem but rather as buildings blocks: Oppong ‘Private International Law in Africa: The past, present and future’ 55 Am. J. Comp. L.

(2007) 702. See also Onwuka & Sesay The future of Regionalism 254 and SADC ‘Challenges for Trade Policies and Strategies’ available at http://www.sadc.int/index/browse/page/109 (accessed 12 February 2012).

316 Article 3 (a) and 3 (j) of the Constitutive Act of 2000.

317 Makinda & Okumu The African Union 25.

318 Makinda & Okumu The African Union 25.

319 Regional economic communities have similar mandates and objectives; multiple memberships lead to wasteful duplication of resources and efforts.

320 UNECA Assessing regional integration in Africa I: Accelerating Africa’s integration (2004) 41.

321 Oluwu (2003)13 Transnat’l L. & Contemp Probs 245.

322 Article 3 (I) of the Constitutive Act of 2000. Adedeji ‘The travails of regional integration in Africa’ in Adebajo & Whiteman (eds) The EU and Africa from Eurafrique to Afro-Europa (2012) 103, hereafter Adedeji ‘The travails of regional integration in Africa’.

323 Adedeji ‘The travails of regional integration in Africa’.

communities. By so doing, the problem brought by multiple memberships and the confusion it creates should be addressed.³²⁴

The coordination and harmonisation of regional groupings has been a major topic of discussion within AU organs particularly the Commission.³²⁵ The effectiveness of the proposed protocol governing the relationship between AU and regional economic blocs remains to be seen. The need to coordinate the existing blocs leading to a single bloc is axiomatic. The success of the AU at large and the idea of regional integration depend on the implications of the AU-RECs relationship and the political will towards achieving rationalisation. This is critical, lest the AU remain another African experiment.³²⁶

The Economic Commission for Africa proposed a protocol between the AU and the sub-regional economic communities that should clarify the role of these communities in achieving the objectives of the Union.³²⁷ A protocol was meant to ensure convergence of policies and laws of the regional communities concerned so that they do not undermine regional integration efforts. The protocol was suggested because one of the weaknesses of the current communities is that they do not complement as priorities vary across the blocs particularly on trade protocols. The AU and the sub-RECs adopted a protocol that rationalises regional integration at the continental level.³²⁸

I now turn to the Protocol.

324 The confusion caused by multiple memberships resulted in the EU creating overlapping regional EPAs operating at different liberalisation speeds and time frames that cut across regional blocs-:Adedeji ‘The travails of regional integration in Africa’ 102. The fact that the EPAs have different provisions is

problematic and does not aid regional integration in Africa. In fact, it undermines regional integration. The issue of multiple memberships, therefore, needs urgent attention to circumvent further problems regarding regional integration in Africa.

325 UNECA ‘Progress on Regional Integration in Africa’ Seventh Session of the Committee on Trade, Regional Cooperation and Integration Addis Ababa, Ethiopia 2 – 3 June 2011 12 (ECA/RITD/CRIT/2011/03) available at http://www.uneca.org/sites/default/files/uploaded-documents/CTRCI-VII/ctrci-progress-on-regional-integration_may2011.pdf (accessed 20 November 2013)

326 The AU is viewed as an over-ambitious organisation in the sense that it was modelled on the EU. The AU still needs to prove that it has lived to the expectation created by virtue of the fact that it is a new

organisation that has a new vision and objectives: Makinda & Okumu The African Union 52.

327 See Protocol on relations between the AU and the Regional Economic Communities chapter 2 part 2.5.7.2.

328 The Protocol on Relations between the African Union and Regional Economic Communities is intended to facilitate the harmonisation of policies of all the regional communities: The Protocol on Relations between the AU and RECs available at http://www.afrimap.org/english/images/treaty/AU-RECs-Protocol.pdf (accessed 25 January 2013). See also Oppong ‘The African Union, The African Economic Community and Africa’s Regional Economic Communities: Untangling a complex web’ (2010) 18 African Journal of International and Comparative Law 92, hereafter Oppong (2010) 18 African Journal of International and Comparative Law.