Chairperson, the negotiations with regard to a Tripartite Free Trade Area, FTA, between the Southern African Development Community, SADC, the Common Market for Eastern and Southern Africa, Comesa, and the East African Community, EAC, were launched in South Africa on 12 June 2011. Several negotiating sessions have been held since then, which resulted in a common understanding of the principles that will underpin this process, as well as the outcome.
It is now agreed that the Tripartite FTA negotiations will not seek to reopen existing trade arrangements that are already in place within the existing regional economic communities. In other words, the trade arrangements existing in SADC, the EAC, and Comesa will remain intact.
In order to extend the integration process, the negotiations will take place among members of the three groupings that do not currently have a preferential trade arrangement with one another.
This means that the Southern African Customs Union, Sacu, of which South Africa is part, will negotiate trade preferences with non-SADC Tripartite FTA members, notably some members of the East African Community and Egypt, as well as others that are prepared to make reciprocal tariff concessions.
At present South Africa is preparing a tariff offer on the basis of detailed technical consultations in the National Economic Development and Labour Council, Nedlac. This offer will then be consolidated into a Sacu offer, and will form the basis of our negotiations with the non-SADC Tripartite FTA partners. We expect that these negotiations will be initiated in the early part of 2013.
As I said yesterday, in response to the statement by the hon Oriani- Ambrosini, our approach to the regional integration process on the African continent is shaped by the concept of development integration, which is also the concept that was endorsed by the members through their heads of state in June 2011. This approach envisages that we complement this effort in relation to the FTA negotiations with efforts to promote infrastructure development, most noticeably in the North-South corridor, and also co- operate in regard to the promotion of productive sector activity.
Chairperson, I thank the Minister for a very comprehensive and informative response. Following on from his reply, it is clear that this is obviously a very important initiative in order to further regional economic integration and then, hopefully, for u, and for other members of our community, to reap the benefits of this regional strength.
However, the economic integration has been discussed at regional forums for many years now. I wonder if the Minister could indicate whether there are any timeframes attached to the finalisation and full implementation of this Tripartite FTA, given that he did mention that the negotiation process would start early next year.
Chairperson, let me just start off by saying that I agree with the hon Van der Merwe about the importance of this initiative. This initiative will, in effect, be broadening integration across established regional economic communities. It is something that we believe is in line with the necessities of industrial development across the continent. We need to create big regional markets that can sustain and support industrial development.
This initiative embraces a combined population of between 600 million and 700 million people in 26 countries, with a combined GDP of US$1 trillion. That is a substantial move forward.
The process that will begin in 2013 is not the start of the negotiation process, but the start of the exchange of offers around tariff concessions and the receipt of counteroffers from other countries. That is a fairly advanced stage of the negotiating process.
The timeframe that was given by the heads of state in 2011 was three years, but it was also realised that the three years was an indicative timeframe. It is not something that is absolutely set in stone. I think so far we are on track to deliver on that timeframe. Thank you.
Thank you, Chairperson. Hon Minister, we know that the free trade areas by themselves are not an engine for growth. They help, but they are, unfortunately, not what we all want them to be.
This whole initiative of the FTA was not endorsed in 2011, but in 2008 at the Kampala summit. In 2011 a 36-month timeframe was attached to it, and 2014 will come. My question in regard to these international agreements is this: Is this not taking too long and are we not missing too many opportunities just because of that?
Mr Chairperson, let me start off by saying that I think that the hon Koornhof is right. That is also what I said just now, that FTAs can help but they are not of themselves the solution to promoting interregional trade on the African continent. Interregional trade on the continent is only between 10% and 11% of total trade. We, as South Africa, are much bigger players in that regard, but the overall level is far too limited.
Some of the biggest problems we find are a lack of infrastructure and soft border issues around trade facilitation and the like, as well as simply the lack of productive capacity to be able to supply what other markets need. So, the programme is actually a comprehensive programme of development integration.
I think that what we have now is a much clearer set of principles that have been identified and agreed upon. We have a much clearer negotiating process than we had in 2008. I think the 2011 summit itself was based on a lot of work which had been done, and certainly we, as South Africa, are putting considerable effort into making this endeavour a success. Thank you.
Thank you, Chairperson. Minister, the first phase of the negotiation process is focused on issues such as trading goods, and addressing issues such as tariff liberalisation, rules of origin, customs co-operation, and nontariff barriers, as well as the movement of businesspersons. I want to focus on this particular question, that is to say the movement of businesspersons.
The question I am asking is whether you are working here on a transversal project, which obviously includes Customs - which is part of the Revenue Service and National Treasury - and which also includes Home Affairs in particular. The restrictions on the free movement of businesspersons that we presently have in the Immigration Act will, in fact, have to be relaxed, and Home Affairs, in its policies, will have to align its directives with yours, so that we are able to move towards a genuine free trade area in the SADC region.
Chairperson, the negotiation of a free trade area does not, strictly speaking, involve issues regarding the movement of persons. That was recognised in the architecture of the tripartite process. What we did say was that the question of the movement of businesspersons had to proceed on a parallel track but according to the same timeframe.
The agreement on the free movement of businesspersons is supposed to be reached by the same end point as the FTA, but it is not part of the FTA process as such. It is a question that I believe should probably be asked of my colleague, the Minister of Home Affairs. I cannot give you a detailed update on where that process is.
Thank you, Mr House Chair. Minister, it is obvious that on this matter there is national consensus and the entire Parliament is behind you. So the question is: How can we strengthen your hand?
Confronted with the same question, other countries have used the well-known carrot and stick technique, where their parliaments have made money available to foreign countries for development and infrastructure, on condition that certain markets are opened.
Should we not consider things of this nature, making money available in large quantities to our own companies to go over there and build infrastructure, which will foster development, on condition that those markets will be opened. This would also be on condition that barriers would be removed, not only in tariff matters, but also nontariff matters, such as insufficient regulations and insufficient laws, to which you referred in your response yesterday, Minister, and on condition that the conditions for fair trade would be improved. What can we do as Members of Parliament, from the committees on Finance and Appropriations?
Chairperson, let me start off by saying that I have always held the view that in trade negotiations the active role of Parliament, along with that of our constituencies organised in Nedlac, is extremely important. So, in the first instance, Parliament is involved in a number of regional associations and international engagements. The more Parliament can use its voice to support the expeditious advancement of this negotiating process, the better.
The more difficult one, but the one that is actually fundamental, is mobilising support for the North-South Corridor Programme and the resources that are going to support the infrastructure development. The more we, as Parliament, can be active in all of these endeavours across the board, the better. I am very glad that the hon member spoke of a national consensus on this matter. It is exactly what we need. Thank you.
Particulars regarding SA Renewable Energy Independent Power Producer Programme, REIPPP
309. Mrs C Dudley (ACDP) asked the Minister of Energy:
(1) Whether, with reference to the SA Renewable Energy Independent Power Producer Programme, REIPPP, the outstanding and incomplete processes and actions prevented the (a) finalisation of a support framework for Eskom and (b) signing off on the projects that have been completed; if not, why not; if so, what are the relevant details;
(2) whether she envisages that another extension to the validity of bids for the REIPP will be sought; if not, what is the position in this regard; if so, what are the relevant details?