Can the EU Be a Model of Regional Integration? - CiteSeerX

DRAFT for COMMENTS

Can the EU Be a Model of Regional Integration? Risks and challenges for developing countries by

Sanoussi Bilal European Centre for Development Policy Management (ECDPM) Onze Lieve Vrouweplein 21, NL-6211 HE Maastricht, The Netherlands Tel. +31-43- 350 29 23, Fax +31-43-350 29 02, E-mail: [email protected] www.ecdpm.org and www.acp-eu-trade.org www.ecdpm.org/bilal

Abstract The experience of the European Union (EU) is widely perceived as not just an example, but the model for regional integration. In recent years, the EU has also been pursuing an increasing number of trade agreements. Besides fostering economic ties, these agreements have also been used by the EU to export its regulatory approach beyond tariff and non-tariff barriers issues. As a result, this EU regulatory demonstration effect also influences the institutional development of its trading partners. More recently, the EU seems to have stepped up its efforts to shape the regional integration process of developing countries, by undertaking comprehensive agreements with regional groupings, which cover not just trade, but also trade-related issues, development concerns and political aspects. This is the case with the current negotiations of the EU with Mercosur, as well as with African, Caribbean and Pacific regional groupings in the context of economic partnership agreements. The Barcelona process, though adopting a different approach, also intends to shape the regional integration processes of Mediterranean countries. Finally, the support provided by the European Commission to the development of the institutions and work programme of the African Union will also further contribute to export the EU integration model. The purpose of this paper is to discuss the extent to which the EU can: (i) serve as a relevant model for regions with different level of development and institutional history than the EU; (ii) positively influence and support the regional integration process of developing countries.

Paper to be presented at the CODESRIA - Globalisation Studies Network (GSN) Second International Conference on Globalisation: Overcoming Exclusion, Strengthening Inclusion, Dakar, Senegal, 29 August to 31 August, 2005.

1

TABLE of CONTENTS

1

Introduction.............................................................................................3

2

The EU as a reference ............................................................................3 2.1 European integration as an example.....................................................4 2.2 Emulation from the EU model ...............................................................4

3

EU support to regional integration principles and initiatives .............7

4

EU efforts to export its model? Myth and reality ...............................10

5

Conclusion ............................................................................................16

Appendix 1 – Institutional structure of some regional groupings ..........17 References ...................................................................................................27

2

“The efforts of the EU to promote and support regional integration among developing countries should not at all be interpreted as an attempt to ‘export’ the European integration model. Clearly, there are different approaches towards integration and economic development. It should be recognised that the European model, shaped by the continent's history, is not easily transferable nor necessarily appropriate for other regions. On the other hand, to the extent that the European model of integration has become an unavoidable ‘reference model’ for virtually all regional initiatives, the EU should share with other interested parties its experience on: improving the functioning of regional institutions, absorbing the adjustment costs originated by lowering barriers, and sharing the benefits from integration.” (European Commission, 1995b; emphasis added)

1 Introduction The experience of the European Union (EU) is widely perceived as not just an example, but a model for regional economic integration. In recent years, the EU has also been pursuing an increasing number of trade agreements. Besides fostering economic ties, these agreements have also been used by the EU to export its regulatory approach beyond tariff and non-tariff barriers issues. As a result, this EU regulatory demonstration effect also influences the institutional development of its trading partners. More recently, the EU seems to have stepped up its efforts to shape the regional integration process of developing countries, by undertaking comprehensive agreements with regional groupings, which cover not just trade, but also trade-related issues, development concerns and political aspects. This is the case with the current negotiations of the EU with Mercosur, as well as with African, Caribbean and Pacific (ACP) regional groupings in the context of economic partnership agreements (EPAs). The Barcelona process, though adopting a different approach, also intends to shape the regional integration processes of Mediterranean countries. Finally, the support provided by the European Commission to the development of the institutions and work programme of the African Union may also further contribute to export the EU integration model. The purpose of this paper is to discuss the extent to which (i) the EU can serve as a relevant model for regions with different level of development and institutional history than the EU; and (ii) positively influence and support the regional integration process of developing countries.

2 The EU as a reference When considering regional integration processes around the world, the experience of the European Union (EU) is a recurrent point of reference. Because of its long history, broad scope, further deepening and successive enlargements, the European Union is often viewed as the epitome of regional integration. It is often considered as a model to be followed by other regional groupings, if not in the short term, due to unfavourable circumstances prevailing in the region, at least in the long run, as an ultimate aim to achieve. This is the case to some extent for many regional integration programmes in Africa and Latin America (Langhammer and Hiemenz, 1991; Lee,

3

2003). In other regions, in Asia for instance, the European integration experience is rather perceived as an “anti-model”, a form of deeper integration that countries do not want to pursue (e.g. Lim, 2004). In any case, regional integration initiatives across the world are often compared to the European “model”. The European Union, for its part, has since a long time been in favour of regional integration among other countries, its neighbours or in other parts of the world. The EU has often provided support to such initiatives, and over the last decade has entered into more formal political and economic cooperation agreements with some regions. In its approach, the EU has often claimed its willingness to help regional initiatives, including by sharing its experience.

2.1

European integration as an example

The early integration initiatives as well as the new wave of regionalism that has stormed the world have triggered greater attention to the various possible forms and shapes that regional integration can take. These can range from shallow forms of integration, which place greater reliance on coordination and cooperation, to more traditional forms of free trade agreements and customs unions, to deeper forms of economic integration (common markets, monetary unions) and other types of political, strategic, security, social regional integration and cooperation agreements. In addition, more attention has also been given to the process of regional integration over time, recognizing that integration does not occur over night, but a gradual process. Regional groupings can follow a path through various stages of integration to achieve their regional objectives. The dynamic nature of integration processes has been further stressed by the enlargement of regional groupings and the interconnections (and agreements) among regions. These are well known stylised facts of the regionalism trends over the last decades, which have been well acknowledged and studies in the literature (e.g. Baldwin et al., 1999; de Melo and Panagariya, 1993; Fernández and Portes, 1998; Hosli and Saether, 1997; Panagariya, 1999; Salazar-Xirinachs, 2002; and Schiff and Winters, 1997 and 2003). It is interesting to note, however, that in most discussions about regional integration, references are made at some points to the experience of the European Union, regarding its level of integration, evolution over time, policy coverage (with its three pillars and their increasing coverage), institutional development, membership, or relations with the rest of world, etc. If the EU is not always perceived as the ultimate model for regional integration processes, it is at least commonly referred to as a chief example and a likely benchmark. Hence, regional integration projects in different regions have commonly been compared to the EU process, either to point out their limitations and narrow approaches, or on the contrary to stress their (over) ambitious objectives and grandvision of integration (e.g. in Africa and Latin America). Similarly, the concerns about the risk that the EU will turn into a ‘Fortress Europe’, following the deepening of the integration process in the EU (notably with the completion of the internal market agenda and enlargement to Southern European countries in the 1980s), has triggered greater attention around the globe on the EU experience, its implications for other regions and the possibility to replicate the EU experience or engage in competing regional trading blocks.

2.2

Emulation from the EU model

Many of the regional integration initiatives have been inspired by the EU experience, in terms of policy agenda or institutional development. A case in point is the West

4

African Economic and Monetary Union (UEMOA). Claeys and Sindzingre (2003) precisely analyse the extent to which UEMOA attempts to mimic some of the norms, legal provisions, institutions and policies of the EU. This development can be traced back from the colonial past of this region and its cultural, political and economic close ties with France, as well as the endogenous belief by West African countries that regional integration will foster development and strengthen their position. Economic integration is therefore perceived as a tool to pursue deeper forms of integration with broader objectives. More generally, many other regions have followed a similar approach, adopting economic integration objectives and institutional designs that resemble, at least in their form, some of the features of the EU model. Appendix 1 identifies the basic structures of some of the main regional groupings in Africa, Asia, the Caribbean and Latin America. For each regional organisation, some of the key characteristics are broadly outlined, along the lines of the EU model: regional Commission or Secretariat, Council (Heads of States and Ministers), regional Parliamentary Assembly, regional Court of Justice, other key regional organs (e.g. on economic and social issues) and a regional central or development bank. The tables in Appendix 1 illustrate that the EU model is not replicated per se in other regional groupings, but that it has been partially imported, to various extent depending on the regions. For instance, in West Africa (Table A5), UEMOA institutions are much more closely framed along the EU model (Table A1) than ECOWAS. To take just a couple of elements, the UEMOA Commission has much stronger executive powers than the more coordinating role of the ECOWAS Secretariat. Similarly, the UEMOA Court of Justice, complemented by a Court of Auditors inexistent in ECOWAS, has a broader legal reach than the one in ECOWAS. UEMOA has also its own regional Central Bank. Of course, institutions should reflect the level of integration and policy mandate of the region. UEMOA being a customs union must put in place a common external tariff and its monetary union calls for the creation of a regional central bank and a greater coordination and harmonisation of macroeconomic policies. The objective of closer integration between ECOWAS and UEMOA, which ambition to form a common and union customs union, will also call for an adaptation and strengthening of their institutions. The situation in West Africa also illustrates that beyond the desire to emulate the EU experience, institutional development also depend of the effective degree of integration pursued. Yet, many observers have noted that developing countries have had a tendency to engage in deeper regional integration agenda which do not correspond to their effective regional interests (Edbald, 1996; Langhammer and Hiemenz, 1991; Mutai, 2003; and Shams, 2003). Either rhetoric has been ahead of real political will (as often the case in African experiences of regional integration), or economic, political and geo-strategic conditions have not been conducive to the implementation of ambitious integration agenda. In other words, grand integration designs à la European way did not match the economic and political reality of the regions concerned. Important lessons on regional integration processes seem to have been neglected, notably that different levels and scope of integration can be pursued, depending on the specific characteristic and political ambitious of a region, as well as on the capacity available in the region (including at the institutional level) to effectively pursue the integration agenda (Best, 1997; Torrent, 2003). This ‘fallacy of transposition’ due to the ‘nonreplicability’ of the European experience, which does not fit developing countries (Langhammer and Hiemenz, 1991), has dominated the institutional and policy development of many regions, not just in Africa, but also in Latin America and the

5

Caribbean. For example, the Andean Community has adopted an institutional framework largely inspired from the EU system (Table A8). Yet, its level of integration is often considered too shallow, including by the European Commission (see Section 4). To some extent, many leaders in developing countries have neglected that fact that the level of integration Some aspects of the EU model, which is a complex mix of intergovernmental and supranational approaches, have not been carried over to some other regional groupings. Most developed countries, while calling for greater integration, have also resisted the delegation of sovereignty that would have been necessary to development effective supranational institutions, preferring to rely more heavily on an intergovernmental model of integration (Mattli, 2003). This resistance has also contributed to put the institutional design and policy agenda of some of the regional groupings (e.g. ECOWAS, SADC, Mercosur, etc.) at odds with the effective implementation of their integration programmes.1 A noticeable exception is the integration process in Asia, where cooperation (as opposed to institutional integration) has played a much more important role, and the EU model has been avoided (Lim, 2004). The Association of Southeast Asian Nations (ASEAN) for instance is based on a loose concept of regional economic and political cooperation with a light set of institutions (Table A6). An interesting feature of the institutional and policy development of many of the regional groupings is that, beyond the active influence of external actors, such as the EU (discussed below in Sections 3 and 4), regional integration objectives have generally been set endogenously. It would be wrong to assume an initial Machiavellian design by the EU to force regional integration objectives and force its design-like type of institutions upon developing countries. While the EU has inspired many of the regional integration processes around the world and provided active support for several of such initiatives, it is generally not at the origin of these integration agenda which have been embraced by national leaders. When considering whether the EU has been a driving force or a model for developing countries, it is not necessary to only assess the active policy of the EU in this respect. The European experience has been important and visible enough to attract, by itself, the attention that made it de facto a model of regional integration for many, and an incentive to attempt to pursue similar paths. This is not to say that the EU has been active in promoting and support regional integration, and to some extent actively contributed to export its model, as discussed in the remaining of this paper. 1

It is important to note, however, that the lack of supranational institutions, such as a powerful regional Commission (like the European Commission), is not a problem per se. Many observer have criticize the lack of strong regional institutions at the regional level, calling for instance for the reinforcement of the regional Secretariat (as in the case of SADC for instance) or the establishment of regional Commission with delegated authority (a call often heard for Mercosur for instance). Yet, the institutional development should follow the effective political commitment of the member states of a region, rather than precede it. Arguable, Mercosur might have collapsed a long time ago were it not for its strong intergovernmental approach and its weak supranational institutions. This is not to say that Mercosur should not consider a greater delegation of sovereignty to supranational institutions. But its development, primarily based on intergovernmental approach (though dominated by some strong states), might have been more suitable to initial progress in its regional integration and less threatening to some of its member states. On the other hand, the role of supranational bodies as front-runners for a grand vision at the regional level, as partly experienced in the EU, should not be underestimated. But this goes beyond the scope of this paper.

6

3 EU support to regional integration principles and initiatives The European Commission strongly believe in the merits of regional integration, including as a tool for development. According to the Commission, regional integration among developing countries, if carried out in a transparent and open manner (i.e. open regionalism), contribute to their integration in the world economy and plays a key role in conflict prevention and peace consolidation (European Commission, 1995b, 2002). Therefore, the EU, “in light of its experience and of the instruments at its disposal”, provides support to developing countries in their regional initiative (Council of the European Union and European Commission, 2000). The European Parliament also shares the view of the European Commission and Council on the important role that regional integration and free trade agreements can play “in the establishment of a more equitable world trade system” and therefore fully support and encourage regional integration among developing countries (European Parliament, 2002, p.14). This support to regional integration initiatives takes various forms. It is part a political support on the principles of regional integration. That is, the EU should embrace and facilitate open regional integration initiatives among developing countries, which are perceived as a complement to multilateral trade integration. In this context, the EU is also willing to share its experience on regional integration matters with developing countries, acknowledging that each region has its specificities. Besides this ‘political support’ and experience sharing, the EU has also committed a sizeable share of its development aid and technical assistance to regional support, which is one of the six priority areas of its development assistance. In the framework of its partnership with the African, Caribbean and Pacific states (Cotonou Partnership Agreement) and the Mediterranean countries (MEDA), the EU has jointly elaborated regional indicative programmes in complement of its national support. In parallel, the EU also believe that, in complement to regionalism among developing countries, regional integration between developed and developing countries and regions can also be beneficial. The EU therefore promotes both North-South agreements, and building on Southern regional integration, what it calls South-SouthNorth free trade agreements (European Commission, 2002).2 In that respect, the EU has also shown greater interest to regions that are following regional integration processes close to its own. This is the case for instance with Mercosur, where historical and cultural links and a shared vision have contributed to bring the two regions closer together. Mercosur agenda led to the prospect of a European-type of integration. Combined to significant EU interests in the region and the prospect of the FTAA, this has led the EU to support the regional integration of Mercosur and open negotiations on a bi-regional trade agreement (see Tenier, 2004).

2

Theoretical support for North-South FTAs can be found notably in Puga and Venables (1998) and Venables (2003).

7

The EU has also been pursuing regional agreements with strategic partners, such as its neighbouring Mediterranean countries. In Northern Africa, the EU has signed several free trade agreements (notably with Algeria, Egypt, Tunisia and Morocco). This integration of the Mediterranean region with the EU is part of the so-called Barcelona process which seeks deeper partnership among and with the MEDA countries which should lead toward the completion of the Euro-Mediterranean Free Trade Agreement. Beyond the objective of furthering the ties with the EU, the Barcelona process seeks to reinforce the cooperation and integration among Northern African countries. In this respect, the conclusion on 11 January 2003 of the negotiations of the Egypt, Jordan, Morocco and Tunisia regional free trade agreement (the Agadir Agreement) can be seen as one further step towards this Euro-Med FTA. The Sub-Saharan countries also enjoy a special privileged relationship with the EU in the context of the EU partnership agreement with the African, Caribbean and Pacific (ACP) countries (under successive Lomé Conventions and since 2000 the Cotonou Agreement). This partnership is due to be enhanced in the coming years, leading to enhanced economic integration among the EU and the ACP regional groupings. Following the provisions contained in the Cotonou Agreement, the ACP and the EU officially launched on 27 September 2002 negotiations on economic partnership agreements (EPAs). After one year of initial negotiations at an all-ACP level, each of the main ACP regional groupings has entered into bi-regional EPA negotiations with EU: Central Africa (CEMAC-plus) and West Africa (ECOWAS-plus) in October 2003, East and Southern Africa (COMESA) in February 2004, the Caribbean (CARIFORUM) in May 2004, Southern Africa (SADC-minus) in July 2004, and Pacific in September 2004. The purpose of these negotiations is to establish reciprocal free trade areas that aim to be first and foremost development-oriented, which should build on and foster the regional integration process of the ACP groupings and facilitate their integration into the world economy. While the negotiations should be completed by the end of 2007 for EPAs to enter into force by 2008, the transition period for the full implementation of these EPA may take over a decade. ACP countries that would decide not to join an EPA shall be provided with alternative arrangements. In parallel, the ACP countries are engaged in the Doha Round of multilateral negotiations at the World Trade Organization (WTO) and for most of them in the deepening of their regional integration process. The EPAs, as proposed by the European Commission, should be essentially enhanced, development-oriented free trade areas (FTAs) between ACP regional groupings and the EU. They will cover not only trade in goods and agricultural products, but also in services, and will address tariff, non-tariff and technical barriers to trade. Other trade-related areas should also be covered, including by increased cooperation between the EU and the ACP, such as competition, protection of intellectual property rights, standardisation and certification, sanitary and phytosanitary (SPS) measures, investment, trade and environment, trade and labour standards, consumer policy regulation and consumer health protection, food security, public procurement, etc. A basic principle of EPAs contained in the Cotonou Agreement is that they should build on and reinforce the regional integration process of the ACP. According to the European Commission, by building on larger well-integrated regional markets, regional EPAs should contribute to foster the integration of the ACP in the world

8

economy, provide for economies of scale, stimulate investment and contribute to lock in the necessary trade reforms. The principle advocated by the European Commission is that economic integration at the regional level with the EU should reinforce the respective integration process of regional groupings. It should enhance the benefits from regional integration among developing countries, in the form of enhanced trade and investment flows for instance, from Europe and within the developing regions. This will provide stronger incentives to the members of regional groupings to commit to the objectives of the region (and not opt out from a grouping which is tied to the EU). This regional partnership with the EU should hence help to increase the credibility of regional integration processes, in particular in Africa. In this respect, the EU is also perceived as an ‘external guarantor’ to avoid economic and integration policy reversal and create a lock-in effect through cooperation with the EU and possible bi-regional agreement (Lee, 2003). The EPAs will also benefit from deeper integration within the regions, so that better integrated regions can concluded more comprehensive agreements with the EU, which, in the views of the European Commission, can only be beneficial to them. The more the better. Stronger regional groupings will in turn be able to provide stronger support to the AU process. Moreover, the different regional EPAs should be based on a similar framework. So, while the European Commission envisages differentiated specific provisions for each EPA, their general structure should be common. Ultimately, as explicitly indicated in the Commission negotiating mandate from the EU member states, EPAs could over time be merge among regions in Africa to become larger entities. Hence, a common EPA for all African ACP countries could be envisaged in the long run. This would then be compatible, and perhaps in fact reinforce, the integration process of the African Union. Or so goes the global vision of the European Commission. However, EPAs could well complicate or disrupt the regional integration process for some regions. This is at least the fear of several countries. First, EPA negotiations will force countries to choose one region over another, in the case of multiple memberships. While this may arguable be a desirable outcome, as discussed in the previous section, the danger is that considerations about the relationship with the EU may take precedent over regional concerns. That is, external considerations driven by the EU may prevail over domestic (national and regional) concerns. The issue is whether the regional integration process can be driven, or supported, by foreign forces (in this case the EU), or whether the process, to be sustainable, should not be endogenous. This is a question which ultimately can only be resolved by the African countries themselves. African regional grouping will also be put in the difficult position of having to speak with one voice during the negotiations with the EU. While this is to be expected from a customs union with a common external policy, it is unusual for a free trade area where member countries retain full sovereignty in the determination of the external trade policy. A common position by an FTA requires therefore a strong, welldeveloped coordination process among the member countries. In any case, any regional agreement involving an FTA as one of the partners will have to be notified individually to the WTO by each members of the FTA.

9

Political will may be insufficient. Conflicting interests may generate tensions within the region. Even in the presence of explicit commitment to negotiate as a group, weak institutional capacity may prevent many groupings from effectively defend the interests of their members during the negotiations with the EU. For the sake of illustration, what would happen to ECOWAS were Nigeria unwilling to sign a common regional EPA with the EU. Would the integration process of ECOWAS, due to become a customs union, be reinforced? This is an hypothetical example which could be repeated with most countries in the various African regions. The point is that unless all countries of a region can agree on a common EPA, the partnership with the EU may seriously disrupt the regional integration process. How, in these conditions, would RECs be able to be the building blocks to the AU integration process? It is interesting to note that difference between the integration process with the EU in Northern African and in Sub-Saharan ACP countries. In the former, the EU signed association and cooperation agreements (i.e. FTAs) with the Mediterranean countries first. Then, regional integration among Mediterranean countries has been pursued. The EU has then played the role of catalyst to effective regional integration among developing countries, the ultimate objective being a broad MEDA-EU agreement. By contract, in the rest of Africa (and the Caribbean and Pacific), the EU wants to build on the existing regional agreements to sign with them economic partnership agreement.3

From the above discussion, it becomes apparent that while the EU is strongly pledging its support to open regionalism among developing countries and has embarked on bi-regional cooperation and integration agreements building on this regional integration process, the EU support can be a double-edge sword. In seeking to strengthen regionalism, the EU ay also put regional integration processes under unwarranted pressures. The following section elaborates on the more pro-active attitude of the EU to promote or interfere (depending on the perspective) with the regional integration of developing countries.

4 EU efforts to export its model? Myth and reality While the EU is keen on supporting open regionalism, it does not pursue it only for altruistic purposes (to favour sustainable development) or because of strong believe on the merits on regional integration (a credo of the European Commission), although these are undeniably important factors. The active promotion of regional integration also responds to clearly identified strategic objectives of the EU. As indicated a decade ago, “conveying a clear political message to a country regarding its importance for the Union also remains a motivation for proposing an FTA (European Commission, 1995a). Support to regional integration agreements is a way for the EU to signal its interest in a region, for political and geo-strategic considerations, as well as to defend its economic interests. In the Commission’s 3

Curiously, no thoughts seems to have come from the European Commission on how the Euro-Med process can be compatible with EPAs, and hence the AU process. Some vague discussions have been dedicated to the case of Egypt, also a member of COMESA, and to South Africa, with which the EU has signed a free trade agreement (the TDCA). Compatibility between the TDCA, the SACU and SADC integration process is highly questionable though. This hints perhaps to the further difficulties that the EPA process may impose on the AU integration process.

10

words: “FTAs are economically beneficial, especially where they help the EU to bolster its presence in the faster growing economies of the world, which is our overriding interest. […] this direct economic justification has also been supplemented by strategic considerations regarding the need to reinforce our presence in particular markets and to attenuate the potential threat of others establishing privileged relations with countries which are economically important to us. Political considerations are as important as the potential economic benefits and in some cases may be the primary motivation. FTAs are coming to be seen as an indicator of the strength of our relationship with a country or region” (European Commission, 1995a). Such types of considerations have obviously motivated the decision of the EU to negotiate an FTA with Mexico for instance, to counteract the potential threat of trade and investment diversion resulting from the conclusion of NAFTA. Similarly, negotiations with Chile, to match the Chile-US FTA initiative, and with Mercosur, to counterbalance the FTAA process, have allowed the EU to defend its economic interests in the Latin America. But even in situations where the EU has less direct economic interests at stake, as in the case of the ACP regional groupings, the EU has been active in promoting, if not exporting, its vision of what regional integration should entail. A priori, the European Commission adopts a soft approach, sharing its experiences and providing friendly advices, while respecting the integration process and specificities of each region.4 However, the EU is often more directive than one might think. The European Commission outlined for instance a ‘toolbox’ for EPAs which highlights key elements for successful regional integration, to be considered by the ACP, but which also reflects the broader thrust of the Commission on what credible regional integration processes should entail. It identifies five components. The first two relate to trade in good (boiling down to the creation of a customs union) and trade in services (with the liberalisation of the four modes of supplies and the development of a simplified and harmonised regulatory system). A third category covers trade (related) rules which affect effective regional integration. These include SPS and technical regulations which need to be harmonised at regional level through the setting up of regional bodies. A regional authority must be created to enforce competition and subsidy rules. Similarly, regional policies must be established on intellectual property rights, investment, public procurement, environmental, labour and consumer rules. To ensure appropriate and credible implementation of regional policies, enforcement mechanisms must also be put in place (e.g. regional appeal courts, regional binding arbitration, etc.). Finally, regional groupings may consider fiscal and macroenonomic harmonisation, creation of monetary union, and the development of appropriate regional bodies “to be the motor of integration”. Undoubtedly, the EU has ambitious agenda for regionalism among developing countries. As argued by one ACP regional official, the EU is pushing regional integration at forced speed.

4

Commission stated for instance that: ‘Taking the EU, being the world’s most integrated region, as an example, regional integration needs to be tackled in a comprehensive manner to achieve its objectives: more trade, more investments and higher competitiveness. However, regional integration can be structured in different ways and can be implemented in different sequences and speeds. This will depend on the specific situation, the institutional set-up as chosen by the member states and the status of development of the members of a region’ (European Commission, 2003c).

11

Indeed, the EU is at times extremely keen on defending its interests and exporting its experience, if not its model. In the case of its trade negotiations with Mercosur, the EC noted that “[a]n approach towards an EU-type integration is […] a long march. It took 35 years for the EU […]. Given that the EU has already shown the route to follow, we expect (and request) that the process is substantially accelerated in Mercosur” (European Commission, 2004b, p.7; emphasis added). Although this comment was made in relation to services, it reflects a broader perception, by the European Commission at least, that the EU integration process can somewhat be replicated in other regions. Moreover, building on the EU experience, this integration process can be pursued at a much faster speed than it did in Europe. In this respect, the EU does not provide a gentle encouragement to its regional partner, in this case Mercosur, to integrate faster. It is an explicit request in the context of its trade negotiations. Of course, the objective of the EU in this case is not merely to export its model. It is based partly on the conviction that deeper forms of regional integration are ultimately beneficial for the member countries. It also derives from the rationale that for a biregional FTA to be of real benefit for the EU and its economic entities, the agreement must entail substantive and broad coverage, and the partner region must itself be sufficiently integrated so as to allow effective free movement of not only goods, but also services, capital and possibly works (at least on a temporary basis, as foreseen in mode 4 of GATS). In the case of Mercosur, the EC has informally spelled out the “minimal requirements” on key aspects of its negotiations for an agreement with Mercosur to be effectively working, “based on the experience of the EU integration” (European Commission, 2004b, p.1). The key areas identified by the Commission for Mercosur actions include: •

Minimum customs requirements to allow the free movement of goods in the EUMercosur area, including: - harmonised customs procedures (legislation, documentation, etc.), at least for EU exports to Mercosur; - compatibility of Mercosur customs legislation with the EU-Mercosur Agreement, notably with regard to the application of rules of origin; - development of an adequate level of administrative capacity as well as cooperation among Mercosur countries to efficiently implement the EUMercosur FTA; - fast track procedures for EU good movements once imported into Mercosur, for instance through simplified intra-Mercosur clearance procedures; - avoidance of double taxation for EU imports that move between Mercosur countries and appropriate application of provisions on bilateral cumulation of origin; - new set of provisions for Mercosur internal administrative cooperation system on internal rules of origin, possibly inspired by the system in place in the EU, as well as possible revision on drawback provisions;

•

Realisation of a Mercosur internal market, to provide similar advantages to EU exporters to Mercosur as those enjoyed by the Mercosur exporters in the EU internal market, including: - EU advice and technical assistance to create a Mercosur internal market, initially through the ongoing Business Facilitation Regulatory Dialogue, and then via technical assistance programmes on technical barriers to trade issues;

12

-

-

-

establishment of a joint EU-Mercosur road map, with fixed deadlines, towards the realisation of the Mercosur internal market, which would entail for Mercosur: ƒ application of the principle of mutual recognition, ƒ harmonisation of technical regulations, ƒ acceptance of conformity assessment certificates; institutional development in Mercosur for technical regulations, standards and conformity assessment procedures, including: ƒ strengthening and recognition of the regional public authority for initiating and controlling the technical regulations harmonisation, ƒ establishment of a centralised notification system for nonharmonised items, along the line of the EU experience, ƒ strengthening of national standardisation bodies ƒ establishment of national systems of market surveillance; greater cooperation between the EU and Mercosur in the areas of technical regulations and standards, for instance by concluding voluntary agreements between EU and Mercosur test laboratories, establishing special fora to resolve technical barriers problems, and collaborating in WTO arena on TBT.

•

Adoption of a bi-regional approach on SPS, including full transparency, recognition of equivalence, integration and harmonisation of legislation and procedures for EU imports, establishment of a single Mercosur Joint Management Committee for SPS and development of administrative capacity.

•

Effective creation of an internal market in services, covering the four modes of GATS and based on the key principle of non-discrimination.

•

To facilitate investment, effective application for all companies establish in Mercosur of the principles of non-discrimination, right of establishment and free transfers related to foreign direct investment.

•

Effective implementation and transposition into national laws of the Mercosur Government Procurement Protocol, which should be complemented by the suppression of safeguard provisions that prevent equal treatment, the possible creation of a regional body to monitor the interpretation and implementation of the Protocol, and the development of a single access point on Mercosur procurement information.

•

Effective enforcement and implementation of Mercosur and its member states intellectual property rights, through, among others, the creation of a single Mercosur system for the application of intellectual property rights protection, and of an harmonised legal framework for enforcement mechanism of intellectual property rights.

It is clear that the European Commission believes in the economic merits of addressing such a detailed and broad economic cooperation agenda with its trading partners. However, the EC also pursues, at least implicitly if not in an open way, an effort to export its regulatory model, as exemplified by their approach with Mercosur. Such regulatory interest motives were explicitly recognized by the Commission in 1995 already, when it stated that “FTAs should include provisions for forms of economic co-operation, in the sphere of investment regulation, standards and certification, industry dialogue, administrative practices and so on, if the Union’s

13

relations with third countries or regions are to be reinforced in the most effective manner. Failure on our part to engage in this type of wider economic co-operation may well result in important economic regions developing a regulatory framework which will potentially hurt the Union’s interest. […]. If the countries of East Asia were, as a result of regulatory co-operation within APEC, to align their regulatory systems practices to those of the United States, this would place the EU at a competitive disadvantage […].” The Commission therefore logically concluded that, in the case of Asia, “Reinforcing links with ASEAN, for example, or with individual countries of the Asian region, would also help to ensure that Asian regional integration occurs in a way compatible to EU interests” (European Commission, 1995a; emphasis added). The objective of closer economic and political cooperation and greater economic integration with EU partners naturally lends itself to the logic of regulatory convergence between the partners. The EU being the dominating partner, it is to be expected that the EU partner will adjust its regulatory system to the one of the EU, and in case of a regional partner, render its regional integration process compatible with some of the trade and economic objectives of the EU. The Association Agreement between the EU and Egypt, which just entered into force on 1 June 2004, provides such an example. In its press release, the EC explicitly stressed that “the Agreement will be instrumental in bringing Egyptian law more closely in line with EU legislation and promoting economic reform” (DG Trade, 2004). In Latin America, the Commission claims that “The aim has not been and will be not to recommend a European model, but rather, where relevant, to share European experience with interested parties in Latin America” (EC, 2004a: 11) Association Agreements, including FTAs, between the EU and, respectively, Central America and the Andean Community are a “common strategic objective” which “should give new impetus for strengthening regional economic integration processes” (Heads of State, 2004, para.52). Clearly, the role of an agreement with the EU is envisaged by both Lain American regions as a way to foster their own integration, following in this objective Mercosur. But unlike the negotiations with Mercosur, or more recently the Caribbean, the opening of FTA negotiations with the EU will not be automatic, but dependent on their state of integration. This is a new and somewhat undefined conditions stated by the EU: “the decision […] to open the process leading to [Association] Agreements […] will start, at this stage, with a joint assessment phase of the respective integration processes of the Central American and Andean Community’s. The assessment will lead, in due course, to negotiations. […].Any future Free Trade Agreement shall be built upon […] the realization of a sufficient level of regional economic Integration (Heads of State, 2004, para.53; emphasis added). While in the EC logic, all bi-regional trade agreements should be based on a sufficient level of integration in the partner region, this has not been the case for the launching of negotiations with Mercosur, nor with the African, Caribbean and Pacific (ACP) regions involved in the negotiations of economic partnership agreements (EPAs).5 One may wonder why these two Latin American regions are treated differently from other regional partners of the EU. In addition, the Commission refrains from providing any specific criteria that would allow determining the sufficient level of integration required by Central America and the Andean countries to be 5

The Commission had, I a previous communication, clearly reiterated this position, indicating that “The EU has supported and continues to support the regional integration processes in Mercosur, Central America and the Andean Community. As far as Central America and the Andean Community are concerned, the Madrid declaration implies that further progress with regard to regional integration is one of the key conditions for the launch of negotiations on possible Associations Agreements. This progress is also needed for the satisfactory conclusion of the current negotiations with Mercosur” (EC, 2004a: 6; emphasis added).

14

permitted to enter FTA negotiations with the EU (to be jointly determined). As one of the indicators of the insufficient degree of economic integration in Latin America, the Commission does refer to the low level of intra-regional in that region, around 15% of all trade in Latin America, as opposed to 40% in North America, about 49% in Asia and over 67% in Western Europe (EC, 2004a: 6). But the Commission cannot be seriously thinking of taking the proportion of intra-regional trade as a key indicator of effective regional integration. Not only does this indicator depends on the complementarity of domestic economies in one region, but it would also rule out any perspective of an EU FTA with an African and Caribbean regions on the argument that their economies are not sufficiently integrated (see Figure 1).

Table 1: Percentage of intra-regional trade (2002) Imports Exports 9 13 Caribbean : CARICOM 3 1 Central Africa: CEMAC 4 6 East and Southern: COMESA 3 1 East Africa: EAC 10 11 West Africa: ECOWAS 8 13 UEMOA Source: UNCTAD (2003). Instead, the Commission mentions the need to define a clear set of criteria to assess the RI progress, and explicitly refers to three conditions to launch FTA negotiations (EC, 2004a: 14). The first one relates to a vaguely defined fully operational institutional framework which would entail effective implementation and enforcement regional mechanisms (including a dispute settlement mechanism), as well as sustainable financial mechanisms to support this institutional framework. The second condition relates to the creation of a customs union in the sense of GATT Article XXIV (i.e. applicable to developed countries), and not under a looser obligations foreseen for regional integration among developing countries under the Enabling Clause. The Commission is aware that not all countries in Central America are in favour of deeper regional integration, in particular Costa Rica and Panama.6 Irrespective of these concerns or reservations by some regional members, the EC sees its role as providing not only support, but also strong incentives to the Central American countries to effectively pursue deeper integration, arguably the necessary condition for the EU to truly benefit from an FTA with Latin American countries. The EU is not interested in bilateral trade agreements with individual Latin American countries, beyond its current agreements with Chile and Mexico. This approach departs from the one adopted by the United States, which has signed the US Central American Free Trade Agreement (CAFTA) in May 2004, after reaching agreements with El Salvador, Guatemala, Honduras, and Nicaragua on December 17, 2003, and with Costa Rica on January 25, 2004. The Dominican Republic then joined to form the US-DR-CAFTA. Obviously, while the level of regional integration in Central America may not be a crucial factor for the US, it is a corner stone of the EU trade relations.

6

In its Communication, the Commission writes: “in two countries there exist some doubts regarding the model of economic integration that should be followed (Costa Rica) and whether economic integration should be pursued at all (Panama, which has not yet confirmed its interest in joining the customs union, due to its highly service-oriented economy). At the institutional level, not all countries are members of the Parlacen and the Central American Court of Justice (CCJ)” (EC, 2004a: 12).

15

A third condition requested by the EC to consider the degree of Latin American regional integration satisfactory to open FTA negotiations is the reduction of non-tariff and other technical barriers to trade among regional members, through harmonisation and mutual recognition of technical regulations (e.g. SPS), the adoption of regional regulatory regimes on services and investment (compatible with the EU approach) and the development of a regional competition policy, of legislation on property rights and of rules government procurement.

5 Conclusion Obviously, the EC sees bilateral and bi-regional agreements as a way to promote a desirable regulatory cooperation to reduce the impact on trade of national and regional regulations (EC, 2001). Regulatory cooperation and harmonisation in FTAs may therefore not only help release the full trade and investment potential of a trade agreement. It may also generate a better common understanding of what best regulatory practices are, although often based on the EU model or experience. Besides, EU agreements also provide scope for technical assistance and support in regulatory areas that the partner region and countries might have difficulties to address otherwise. The extent to which it imposes its model, or simply expresses legitimate concerns and share its relevant experience remains a matter of appreciation. But clearly, all these elements are parts of the EU approach to regionalism, and constitute both an opportunity and a challenge for the regional integration process of developing countries.

16

Appendix 1 – Institutional structure of some regional groupings

This appendix provides a brief overview of the institutional structure of some of the main regional economic groupings:

-

Table A1: European Union

-

Africa: o Table A2: African Union o Table A3: Central Africa - CEMAC o Table A4: Southern Africa - SADC o Table A5: West Africa: ƒ UEMOA ƒ ECOWAS

-

Table A6: Asia: ASEAN

-

Table A7: Caribbean: CARICOM

-

Latin America: o Table A8: Andean Community o Table A9: Mercosur

17

Table A1: The European Union Regional organisations

Commission/ Secretariat

European Union

European Commission (represents interests of the EU) > executive body

Customs and monetary union + single market fully implemented - 25 members - founded in 1956 by Treaty of Rome All EU decisions and procedures are based on the Treaties, agreed by all MS

- proposes legislation - manages + implements EU policies and budget - enforces EU law (together with ECJ) - represents EU internationally

Council

Parliaments

European Council - provides impetus for major political issues relating to European integration. - sets guidelines and can issue declarations and resolutions on consensus basis

European Parliament (elected by peoples of MS) > legislative Parliament (together with the Council, adopts the laws = codecision)

Council of the European Union (represents governments of MS) > decision-making body of the Union - often, takes decision / pass EU laws on proposal from EC and in association with the EP, either through consultation procedure (agriculture, judicial, police cooperation, taxation) or through codecision (eg internal market) - co-ordinates broad economic policies of MS - conludes international agreements between EU + 3rd states + international organisations - approves budget together w/ EP - develop the EU’s CFSP - coordinates the cooperation between national courts and police forces in criminal matters - work prepared or coordinated by COREPER (Permanent Representatives Committee)

Power : - legislative - budgetary - supervisory

Court of Justice European Court of Justice (ECJ) > legislative body - upholds law of the Union (it is the supreme court of the EU) and adjucates on matters of interpretation of European law/ Court of First Instance - hears disputes brought by employees of the EU and other matters European Court of Auditors - controls sound and lawful management of EU budget

Other organs European Economic and Social Committee expresses the opinion of organised civil society on economic and social issues Committee of the regions - expresses opinion of regional and local authorities > both advisory bodies

Regional Bank European Central Bank - responsible for EU monetary policy European Investment Bank - helps achieve EU objectives by financing investment projects

European Ombudsman - deals w/ citizens complaints ab maladministration by any EU institution or body

18

Table A2: Africa – African Union Regional organisations African Union (AU) - continental organisation (replaced the OAU) Objectives: - promote the socio-economic integration of the continent to lead to greater unity and solidarity between African countries - promote of peace, security and stability within the continent… 7

Commission/ Secretariat The Commission (= Secretariat of the Union) (Chairperson, Deputy Chairperson + 8 Commissioners w/ portfolio8) - represents Union and defends its interests - elaborates, promotes, coordinates and harmonizes the policies of the Union w/ those of the Regional Economic Communities (RECs)

Council

Parliaments

The Assembly (Heads of States and Government)

Pan-African Parliament 10 (= Bureau)

- supreme organ of the Union

- ensures full participation of African peoples in governance, dvpt and economic integration of the Union

The Executive Council ( or Council or Council of Ministers of the Community) (Ministers or authorities designated by MS)9 - responsible to the Assembly - coordinate and harmonize policies and activities and initiatives of Union in areas of common interest to MS - monitor implementation of policies, decisions, Agreements adopted by Assembly, - elect Commissioners appointed by Assembly -examine program and budget of the Union and submit to Assembly for consideration

Court of Justice The African Court of Justice (African Court on Human and People’s rights) - rules over cases pertaining to the African Charter on Human and People’s Rights

Other organs

Regional Bank

Specialized Technical Committees

African Central Bank

Peace and Security Council (PSC)

African Monetary Fund

Economic Social and Cultural Council (ECOSOCC) - advisory organ composed of # social and professional MS of Union

African Investment Bank

African Economic Community (or Community)

-consultative and advisory powers only aim = become an institution with full legislative powers

- the Permanent Representatives’ Committee (prepares the work of the Executive Council)

7

Specific objectives of the AU : http://www.africa-union.org/home/Welcome.htm the 8 portfolios are : peace and security, political affairs, infrastructure and energy, social affairs, human resources, science and technology, trade and industry, rural economy and agriculture, economic affairs powers and functions : http://www.africa-union.org/organs/orgAssembly.htm - idem 10 Objectives of the AU Parliament in : http://www.africa-union.org/organs/orgAssembly.htm p. 3 - in fact , click on the organ, and protocol linked ! 8 9

19

Table A3: Central Africa - CEMAC Regional organisations CEMAC11 Communauté économique et monétaire d’Afrique Centrale - founded in 1994 - 6 members Composed of 2 unions : - Union économique de l’Afrique Centrale (UEAC) - Union Monétaire de l’Afrique centrale (UMAC) Objective : from cooperation to an ever closer union and a common market

Commission/ Secretariat

Council

Parliaments

Court of Justice

Executive Secretariat

Heads of States Conference (Conférence des chefs d’Etat)

Community Parliament

Community Court of Justice

- prepares and controls decisions and their implementation - expresses recommendations and opinions

- supreme organ - determines policy orientation of Community and its institutions (determines the action of the Council of Ministers and of the ministerial committee)

- legislative role via directives. - in charge of democratic control of the institutions and organs participating in the decision-making process.

Composed of a judicial Chamber (Chambre judiciaire) and a Auditors Chamber (Chambre des comptes) - controls the accounts of the Union

Council of Ministers (of UEAC) - ensures direction of the economic union - adopts budget Ministers Committee (of UMAC) (Comité ministerial) - examines the orientations of the economic policy of the MS and ensures coherence of the common monetary policy.

Other organs

Regional Bank UEAC integrates the BDEAC (Banque de développement des États d’Afrique Centrale) UMAC integrates the BEAC (Banque des États de l'Afrique Centrale) and the COBAC (Commission Bancaire de l’Afrique Centrale) Institution de Financement du développement

Both adopt regulations and directives, take decisions and express recommendations and opinions. Inter-State Committee - prepares deliberations of Council of Ministers

11 http://www.izf.net/izf/FicheIdentite/CEMAC.htm or http://www.beac.int/int_cemac.asp The Treaty states that the CEMAC has 4 institutions: UEAC, UMAC, the Community Parliament and the Court of Justice. The others constitute the main ‘organs’ of the Community. http://www.beac.int/Textes/beac/adcemac.pdf

20

Table A4: Southern Africa - SADC Regional organisations SADC

12

Southern African Development Community - Founded in 1992 -14 members Objective: promotion of sustainable and equitable economic growth and socio-economic development …

Commission/ Secretariat Secretariat - Strategic planning and management of the programme of SADC - Implementation of the decisions of the Summit and Council - Organization and management of the SADC Meetings - Financial and general administration - Representation and promotion of SADC - Promotion and harmonization of policies and strategies of Member States - Monitoring and evaluating the implementation of regional policies and programmes

Council The SUMMIT (Heads of State and Government of all MS) - supreme policy-making institution, meets twice a year. (decisions by consensus, are binding) - responsible for overall policy direction and control of the functions of SADC; adopt legal instruments for the implementation of the provisions of this Treaty and may delegate authority to Council or any other institution - decide on the creation of Directorates, institutions, committees and agencies as the need arises and elect Chairperson and vice Chair person from members. Integrated Committee of Ministers (ICM) - ensure policy guidance, coordination and harmonisation of cross-sectoral activities13 - Provide policy guidance to the Secretariat and make decisions on matters pertaining to the Directorates as well as monitor and evaluate their work - Have decision-making powers ad referendum to ensure rapid implementation of the programme that otherwise would wait for a formal meeting of the Council The Council - Oversee the functioning and development of SADC - Oversee the implementation of the policies of SADC and the proper execution of its programmes - Approve policies, strategies and work programmes of SADC - Direct, coordinate and supervise the operations of the institutions of SADC subordinate to it - Approve the establishment of authorities, institutions and agencies for recommendation to the Summit - Create its own committees as necessary - Recommend to the Summit, persons for appointment to the posts of Executive Secretary and Deputy Executive Secretary Organ on politics, Defence and Security

Parliaments

Court of Justice Tribunal - ensure adherence to and the proper interpretatio n of the provisions of the SADC Treaty and subsidiary instruments - adjudicate upon such disputes as may be referred to it.

Other organs

Regional

Bank

National committees - provide inputs at the national level in the formulation of regional policies, strategies, the SPA as well as to coordinate and oversee the implementati on of these programmes at the national level. Standing Committee of Senior Officials - technical advisory committee to the Council;

- coordinated at the level of the Summit on Troika basis and reports to the Chairperson of SADC. - structure, operations and functions of the Organ shall be regulated by the protocol on Politics, Defense and Security Cooperation.

12

Objectives : http://www.sadc.int/index.php?lang=english&path=about/background&page=objectives Institutional organisation : http://www.sadc.int/index.php?lang=english&path=about/restructuring&page=restructuring_proposed 13

Oversee the activities of the 4 core areas of integration: Trade, Industry, Finance and Investment; Infrastructure and Services; Food, Agriculture and Natural Resources (FANR); Social and Human Development and Special Programmes, including the implementation of the Strategic Plan in their areas of competence

21

Table A5: West Africa – UEMOA and ECOWAS Regional organisations

Commission/ Secretariat

UEMOA 14 (WAEMU)

The Commission

Union économique et monétaire Ouest-Africaine

- puts forward its recommendations + opinions to the Conference + Council - executes budget of Union

- executive power

- founded in 1994 - 15 members 15

- Objective = creation of a common market with free movement of people, goods, services and capital.

- can call upon the Court of Justice if MS have not abided by their obligations

Council Heads of States Conference (Conférence des chefs d’Etat) - supreme organ of the Union - final decision-maker and decides on orientation of Union’s policy - decides on future adhesion of members The Council of Ministers - ensures implementation of general orientations taken by the Conference - defines and look after the credit and monetary policy of the Union

Parliaments Interparliamentary Committee (Comité interparlementaire) - consultative role + animates debate on integration. - foreshadows the future Parliament that will be in charge of the democratic control of the Union bodies

- Customs Union currently being implemented ECOWAS (CEDEAO)

The Executive Secretariat

Economic Community of West African States17

- executes decisions taken by Authority + applies regulations of the Council - prepares draft budgets and programmes of activity and supervises their execution upon approval by Council. - Submits reports on community activities

- founded in 1975 - 15 members Objective : economic and monetary union A Free Trade Area is currently being implemented

Authority of Heads of State and Government (supreme institution) - responsible for the general direction and control of the Community Council of Ministers - make recommendations to the Authority on any action aimed at attaining the objectives of the Community - issue directives on matters concerning coordination and harmonization of economic integration policies - approve the work programmes and budgets of the Community and its institutions

The Community Parliament - consider issues concerning human rights and fundamental freedoms of citizens, information and communication - may be consulted on matters relating to public health, education, youth and sport, science and technology and environment policies.

Court of Justice Court of Justice - looks after uniform interpretation + application of Community law - arbitrates conflicts between MS or between Union and its agents Court of Auditors (Cour des comptes) - controls the accounts of the # bodies and checks the the liability and efficiency of the Community resources > organs of control The Community Court of Justice - ensure the observance of the law and of the principles of equity in the interpretation and application of the provisions of the Treaty - deal with disputes between MS, and between MS and the institutions

Other organs

Regional Bank

Regional Consular Chamber16 (Chambre Consulaire régionale)

Central Bank of West African States - deals with macro-economic questions

consultativ e organ - chamber of dialogue between UEMOA + main economic actors

West African Bank of Development (Banque ouestafricaine de développement) - more involved in financing of developmentrelated projects.

Economic and Social Council

ECOWAS Bank for Investment and development (EBID)18

- advisory role

the two subsidiaries are to be known as ECOWAS Regional Development Fund (ERDF) and ECOWAS Regional Investment Bank (ERIB).

14

liens aux institutions http://www.uemoa.int/organes/organisation.htm Dans le cadre du processus de son intégration régionale, l’UEMOA s’est fixée les objectifs suivants :i) le renforcement de la compétitivité des activités économiques et financières des États , ii) la convergence des performances et des politiques économiques des Etats, par l'institution d'une procédure de surveillance multilatérale, iii) la création d'un marché commun basé sur la libre circulation des personnes, des biens, des services, des capitaux et le droit d'établissement ainsi que sur un tarif extérieur commun et une politique commerciale commune; iv) la coordination des politiques sectorielles nationales, par la mise en œuvre d'actions communes et éventuellement de politiques communes dans les principaux domaines de l'activité économique, v) l'harmonisation des législations des Etats membres. dans la mesure nécessaire au bon fonctionnement du marché commun. 16 http://www.uemoa.int/organes/consultatif.htm 15

17 18

http://www.sec.ecowas.int/sitecedeao/english/institutions.htm and Treaty on http://www.iss.co.za/AF/RegOrg/unity_to_union/pdfs/ecowas/3ECOWASTreaty.pdf

The ECOWAS Investment and Development Bank (EBID) has become the financing institution for the New Partnership for Africa's Development (NEPAD) programme in West Africa following the appointment of ECOWAS as the implementing agency of the Plan of action in the Sub-Region.

22

Table A6: Asia - ASEAN Regional organisations ASEAN

19

Association of Southeast Asian Nations - Established in 1967 - 10 members - inter-governmental organisation Objective : accelerate the economic growth, social progress and cultural development in the region - promote regional peace and stability ASEAN Vision 2020 - adopted in 1997 - called for ASEAN Partnership in Dynamic Development aimed at forging closer economic integration within the region20

Commission/ Secretariat ASEAN Secretariat

21

“to provide for greater efficiency in the coordination of ASEAN organs and for more effective implementation of ASEAN projects and activities". - harmonize, facilitate and monitor progress in the implementation of all approved ASEAN activities - initiate plans and programmes of activities for ASEAN regional cooperation in accordance with approve policy guidelines - exercise the administrative and financial powers vested in him - responsible to the ASEAN Ministerial Meeting when it is in session and to the Standing Committee at all other times Secretary-General of ASEAN - initiate, advise, coordinate, and implement ASEAN activities

Council

Parliaments

ASEAN Summit (Meeting of the ASEAN Heads of State and Government)

2 main fields of action:

- highest decision-making organ - a summit per year ASEAN Economic Ministers (AEM) ASEAN Ministerial meeting (AMM) (Foreign Ministers) ASEAN Finance Ministers Meeting (AFMM)

ASEAN Security Community - ensure ASEAN political and security cooperation

+ other ministerial meetings (according to sectors)

Political cooperation

ASEAN Regional Forum (ARF) - promote confidencebuilding, preventive diplomacy and conflict resolution in the region

Court of Justice

Other organs

Regional

- 29 committee s of senior officials - 122 technical working groups - many specialized bodies22

ASEAN Finance and Central Bank

Bank

Economic and functional cooperation - preferential trading arrangements for trade to increase intraASEAN trade > ASEAN Free Trade Area (AFTA)

ASEAN cooperation has resulted in greater regional integration

Institutional organisation : http://www.sadc.int/index.php?lang=english&path=about/restructuring&page=restructuring_proposed 19 http://www.aseansec.org/64.htm 20 ASEAN Vision 2020 : The vision statement also resolved to create a stable, prosperous and highly competitive ASEAN Economic Region, in which there is a free flow of goods, services, investments, capital, and equitable economic development and reduced poverty and socio-economic disparities. The Hanoi Plan of Action, adopted in 1998, serves as the first in a series of plans of action leading up to the realization of the ASEAN vision. In addition to trade and investment liberalization, regional economic integration is being pursued through the development of Trans-ASEAN transportation network 21 composition of ASEAN Secretariat: Secretary-General, three Bureau Directors, a Foreign Trade and Economic Relations Officer, an Administrative Officer, a Public Information Officer and an Assistant to the Secretary-General. 22 ASEAN has several specialized bodies and arrangements promoting inter-governmental cooperation in various fields: ASEAN University Network, ASEAN-EC Management Centre, ASEAN Centre for Energy, ASEAN Agricultural Development Planning Centre, ASEAN Earthquake Information Centre, ASEAN Poultry Research and Training Centre, ASEAN Regional Centre for Biodiversity Conservation, ASEAN Rural Youth Development Centre, ASEAN Specialized Meteorological Center, ASEAN Tourism Information Centre, and ASEAN Timber Technology Centre. In addition, ASEAN promotes cooperative activities with organizations with related aims and purposes: ASEAN-Chambers of Commerce and Industry, ASEAN Business Forum, ASEAN Tourism Association, ASEAN Council on Petroleum, ASEAN Ports Association, ASEAN Vegetable Oils Club, and the ASEAN-Institutes for Strategic and International Studies. Furthermore, there are 53 Non-Governmental Organizations (NGOs), which have formal affiliations with ASEAN.

23

Table A7: Caribbean - CARICOM Regional organisations CARICOM Caribbean Community and Common Market23 Caricom Single Market and Economy (CSME) - Established in 1973 by Treaty of Chaguaramas - 15 members24 - Customs Union currently being implemented

Commission/ Secretariat CARICOM Secretariat - provide service to the MS and assist Community Organs in the development and implementation of proposals and programmes for the achievement of objectives of the Community; - initiate or develop proposals for consideration and decision by competent Organs in order to achieve Community objectives; - prepare the draft budget of the Community for examination by the Budget Committee

Council The Conference of Heads of Government (Supreme Organ) (composed of Heads of Gvt of MS) - determine and provide policy direction for Community - final authority for conclusion of Treaties + for entering into relationships w/ International organisations and States - responsible for making financial arrangements to meet expenses of Community (but delegated function to Community Council) The Community Council of Ministers (second highest organ) - responsible for the development of Community strategic planning and coordination in the areas of economic integration, functional cooperation and external relations. - Bureau of Conference (initiate proposals for dvpt and approval, facilitate implementation of CARICOM decisions, provide guidance to Secretariat on policy issues)

Parliaments

Court of Justice

Other organs

The Caribbean Court of Justice - exercise both an appellate (Court of last resort for civil and criminal matters) and original jurisdiction

The Council for Trade and economic Development (COTED) - promote trade and economic development of Community

- applies functions of international tribunal by applying rules of international law in respect of interpretation and application of Treaty

Regional Bank

The Council for Foreign and Community Relations (COFCOR) - determine relations between Comm and 3rd States international organisations The Council for Human and Social Development (COHSOD) - resp for social and human dvpt of Community especially health, education, labour and industrial relations, youth, women, and sports The Council for Finance and Planning (COFAP) - resp for economic policy coordination and financial and monetary integration of Member States. > All assist Council and Conference in performance of their functions and aimed at streamlining functioning of Community

23

http://www.caricom.org/archives/structure.htm and http://axses.com/encyc/caricom/nt/faqs.cfm specific objectives of the Community =: (a)improved standards of living and work; (b)full employment of labour and other factors of production; (c)accelerated, co-ordinated and sustained economic development and convergence; (d)expansion of trade and economic relations with third States; (e) enhanced levels of international competitiveness; (f)organisation for increased production and productivity; (g)the achievement of a greater measure of economic leverage and effectiveness of Member States in dealing with third States, groups of States and entities of any description; (h)enhanced co-ordination of Member States' foreign and [foreign] economic policies; and (i)enhanced functional co-operation, including - (i)more efficient operation of common services and activities for the benefit of its peoples; (ii)accelerated promotion of greater understanding among its peoples and the advancement of their social, cultural and technological development; (iii)intensified activities in areas such as health, education, ransportation, telecommunications. 24 The Bahamas is a member of the Community but not of the Common Market

24

Table A8: Latin America – Andean Community Regional organisations

Commission/ Secretariat

ANDEAN COMMUNITY

Andean Community Commission - main policy-making body - chaired by representative of the country that chairs the APC

A subregional organisation with an international legal status - based upon the ‘Cartagena Agreement’ or Andean Pact signed in 1969 - Made up of 5 countries + bodies and institutions of he Andean Integration System (AIS)25 Objective - promote the social and economic development of its members - facilitate their participation in the regional integration process with the view to gradually establish the Latin American Common Market - A customs union since 1995 with a CET and hopes to achieve a common market by 2005 - Has a Common foreign policy since 1997, and a Common Agricultural policy, yet not as substantial the EU’s CAP - failed to set up common industrial policy in 70s and a common currency in 80s. -framework agreement to establish a free trade area with Mercosur with the Montevideo Agreement signed in 2003

25

- formulates, carries out, and evaluate general Andean subregional integration policy in area of trade and investment and, when in order, in coordination with the Council of FM - takes necessary measures to accomplish objectives of the Cartagena Agreement + carrying out the Presidential guidelines - coordinates joint position of MS in international forums + negotiations - approves, rejects or amends proposals submitted by MS or the General Secretariat - approve + manage the budget - issues decisions (shares legislative role with Council of FM) Andean Community General Secretariat - executive body of the Community - gives technical support to other bodies and institutions of the AIS - conducts studies, reports, - can draw up Decisions and make proposals to the Council of FM, and can pass on initiatives and suggestions to the Council - manages subregional integration process, paying attention to the fulfilment of the principle of fair distribution of benefits of integration to all MS.

Council Andean Presidential Council - highest level decisionmaking body - Chairmanship rotates every calendar year. - issues policy guidelines - defines Andean subregional integration policy - guides, evaluates and promotes subregional integration process Andean Council of Foreign Ministers - political leadership body - chaired by Foreign Minister of the country that chairs the APC - formulates MS’s foreign policies on matters of subregional interests, and carries out guidelines set by the APC. - formulates, carries out, and evaluates general Andean subregional integration policy in coordination with the Commission - orients + coordinates external efforts of the bodies and institutions of the AIS and ensures objectives of the Community are attained. - issues Declarations and Decisions, which then become part of the Andean Community Law.

Parliaments Andean Parliament - the system’s deliberating body - participates in the promotion and guidance of the Andean subregional integration process, with a view to consolidating Latin American integration - makes proposals on • the draft annual budget, • general actions and decisions taken by institutions, • the Community law

Court of Justice Andean Community Court of Justice The judicial authority of the Community - 5 judges, each representing one of the MS - ensures legality of Community provisions - interprets community laws and ensures they are applied uniformly - settles disputes 1996: Protocol modifying the Treaty establishing the Court, enforced in 1999: > new spheres of competence, i.e. oversees Appeals for Omission or Inaction, Arbitration and Labor Jurisdiction.

Other organs

Regional

Bank

- The Andean Development Corporation (ADC) - international financial institution made up of Latin American and Caribbean shareholders - backs sustainable development of its shareholders members by raising funds to provide wide range of financial services - The Latin American Reserve Fund (FLAR) > those two are the System’s Financial institutions, and aim at promoting the Andean subregional integration process - The Business Advisory Council - The Labor Advisory Council

For more info + a table representing the AIS, see http://www.comunidadandina.org/ingles/who.htm + http://www.embindia.org/business_andean.htm (trade + economic information on this website!)

25

Table A9: Latin America – Mercosur

Regional organisations MERCOSUR common market of the South founded in 1991 by Treaty of Asuncion (ToA)26 4 members - strictly intergovernmen tal economic integration project27

Commission/ Secretariat Trade Commission of Mercosur (MTC) -body charged with assisting the CMG - oversees application of instruments of common commercial policy - also decision-making organ (issues directives) Administrative Secretariat of MERCOSUR (SAM) - operational support to all organs

Council Two collegiate and intergovernmental bodies: The Common Market Council (CMC) - highest political and decision-making body - in charge of the political aspects of the integration process. - seeks to assure the fulfilment of the objectives established by the Treaty of Asunción and the final implementation of the Common Market.

Parliaments Joint Parliamentary Commission (JPC) - representative body of the Parliament of MS - counselling and advisory organ -consider issues at request of CMCM, make recommendations to CMG and CMC, oversee and request reports to other MERCOSUR organs, and facilitate congressional procedures needed to enforce decisions.

Court of Justice Dispute Settlement 3 procedures: - consultations: mechanism to solve disputes without going through judiciary procedure -claims: sort of prejudiciary mechanism to solve trade disputes -non-binding third party adjudication : treats controversies between a MS and 1/3 party.

Other organs

Regional

Bank

Social and Economic Advisory Forum (FCES) - representative body of economic and social sectors - counselling and advisory organ 10 technical committees (TCs)

Absence of an independent jurisdictional body

+ the Common Market Group (CMG) - executive body of Mercosur

In addition, ASEAN promotes cooperative activities with organizations with related aims and purposes: ASEAN-Chambers of Commerce and Industry, ASEAN Business Forum, ASEAN Tourism Association, ASEAN Council on Petroleum, ASEAN Ports Association, ASEAN Vegetable Oils Club, and the ASEAN-Institutes for Strategic and International Studies. Furthermore, there are 53 Non-Governmental Organizations (NGOs), which have formal affiliations with ASEAN. 26 “The ToA and the Additional Protocol on the Institutional Structure of Mercosur (so-called Ouro-Preto Procol – OPP) differ from the Treaty of Rome in the detail of the commitments undertaken by the signatories, the nature of governing organs, the role given to an ‘autonomous legal order and the procedures adopted for decision-making’. R. Bouzas & H. Soltz, Institutions and regional integration: the case of Mercosur’, p. 1. http://www.netamericas.net/Researchpapers/Documents/Bouzas/Bouzas1.pdf 27 http://fp.chasque.net:8081/ngonet/trade/procesos/mercosur/meringle.htm or Its principal objectives are: to improve the economies of their countries by making them more efficient and competitive and by enlarging their markets and accelerating their economic development by means of a more efficient use of available resources; to preserve the environment; to improve communications; to coordinate macroeconomic policies; and to harmonize the different sectors of the economies of the member countries.

26

References Baldwin, Richard E., Daniel Cohen, André Sapir, and Anthony J. Venables eds. (1999), Market Integration, Regionalism and the Global economy, Cambridge, U.K.: Centre for Economic Policy Research and Cambridge University Press. Best, Edward (1997), ‘Capacities for Regional Integration: A Conceptual Framework for Comparative Analysis’, in Hosli, Madeleine O. and Arild Saether eds., Free Trade Agreements and Customs Unions: Experiences, Challenges and Constraints, Co-published by the European Institute of Public Administration, Maastricht, The Netherlands, Brussels: Tacis, European Commission, Ch.3, pp.51-75. Claeys, Anne-Sophie and Alice Sindzingre (2003), ‘Regional Integration as a Transfer of Rules: The Case of the Relationship between the European Union and the West African Economic and Monetary Union (WAEMU)’, paper presented at the Development Studies Association Annual Conference, Glasgow, University of Strathclyde, 10-12 September 2003. http://www.edpsg.org/Documents/dp26.doc Council of the European Union (1995), Regional Economic Integration Efforts, Council Resolution of 1 June 1995. Council of the European Union and European Commission (2000), ‘The European Community’s Development Policy’, Statement by the Council and the Commission. de Melo, Jaime, and Arvind Panagariya (1993), New Dimensions in Regional Integration, Cambridge, U.K.: Cambridge University Press. Delvin, Robert and Antoni Estevadeordal eds. (2003), Bridges for Development: Policies and Institutions for Trade and Integration, Washington, D.C.: Inter-American Development Bank. DG Trade (2004), ‘European Union and Egypt strengthen their relations’, Press Release Brussels: European Commission, 1 June. http://europa.eu.int/comm/trade/issues/bilateral/countries/egypt/pr010604_en.htm Echandi, Robert (2001), ‘Regional Trade Integration in the Americas during the 1990s: Reflections on some trends and their implication for the multilateral trade system’, Journal of International Economic Law, 367-410. Edblad, Jeanette (1996), ‘The Political Economy of Regional Integration in Developing Countries’, CERUM Regional Dimension Working Paper No.3, CERUM Centre for regional Science, Umea, Sweden, www.umu.se/cerum European Commission (2004a), Communication from the Commission to the European Parliament and the Council on the Commission’s objectives, in the framework of the relations between the European Union and Latin America, in view of the 3rd Summit of Heads of State and Government of the European Union and Latin America and the Caribbean to be held in Guadalajara (Mexico) on 28 May 2004, 7 April. http://trade-info.cec.eu.int/doclib/docs/2004/april/tradoc_116662.pdf European Commission (2004b), ‘Implementing the Future EU-Mercosur Agreement’, Draft EU Non-Paper. European Commission (2003a), Making Globalisation Work for Everyone: The European Union and World Trade, Luxembourg: Office for Official Publications of the European Communities. European Commission (2003b), Economic Partnership Agreements: Means and Objectives. European Commission (2003c), ‘EPA Negotiations: Toolbox’, http://europa.eu.int/comm/trade/bilateral/acp/toolbox_en.htm

27

European Commission (2002), Trade and Development: Assisting Developing Countries to Benefit from Trade, Communication from the Commission to the Council and the European Parliament, COM(2002) 513 final, 18 September. European Commission (2001), ‘Implementing policy for external trade in the fields of standards and conformity assessment’, Commission Staff Working Paper SEC(2001)1570 of 28 September, http://europa.eu.int/comm/enterprise/regulation/trade/toolbox.pdf European Commission (1995a), Free Trade Areas: An Appraisal, Communication from the Commission, SEC(95)322 final, 8 March. European Commission (1995b), European Community Support for Regional Economic Integration Efforts among Developing Countries, Communication from the Commission, COM (95) 219, http://europa.eu.int/comm/development/body/legislation/recueil/en/en13/en131.htm European Parliament (2002), Report on Trade and Development for Poverty Reduction and Food Security, Committee on Development and Cooperation, Final A5-0230/2002, 13 June. Feinberg, Richard (2003), ‘The Political Economy of United States’ Free Trade Arrangements’, Blackwell, pp.1019-1040. Fernández, Raquel and Jonathan Portes (1998), ‘Returns to Regionalism: An Analysis of Non traditional Gains from Regional Trade Agreements’, World Bank Economic Review, 12(2), 197-220. Heads of State and Government of Latin America and the Caribbean and of the European Union (2004), Declaration of Guadalajara, 29 May 2004, http://trade-info.cec.eu.int/doclib/docs/2004/june/tradoc_117654.pdf Hosli, Madeleine O. and Arild Saether eds. (1997), Free Trade Agreements and Customs Unions: Experiences, Challenges and Constraints, Co-published by the European Institute of Public Administration, Maastricht, The Netherlands, Brussels: Tacis, European Commission. Lamy, Pascal (2004), “The Role of Europe in Today’s Globalised World”, Speech at the Seventh Conference on Globalisation, Felix Meritis Connecting Cultures, Amsterdam, The Netherlands, 31 May. http://europa.eu.int/comm/commissioners/lamy/speeches_articles/spla227_en.htm Langhammer, Rolf J. and Ulrich Hiemenz (1991), 'Regional Integration among Developing Countries: Survey of Past Performance and Agenda for Future Policy Action’, UNDP-World Bank Trade Expansion Program Occasional Paper 7, December, Trade Policy Division, The World Bank. Lee, Margaret C. (2003), The Political Economy of Regionalism in Southern Africa, Lansdowne: University of Cape Town Press, and Boulder, Colorado: Lynne Rienner Publishers. Lim, Hyun-Chin (2004), ‘The Dynamic of Regionalism in East Asia: Differences from European Union’, paper written for the Second Pan-European Conference on EU Politics, ECPR Standing Group on European Union Politics, 24-26 June 2004, Bologna, Italy. Mattli, Walter (2003), ‘Institutional Models of Regional Integration: Theory and Practice’, in Delvin, Robert and Antoni Estevadeordal eds., Bridges for Development: Policies and Institutions for Trade and Integration, Washington, D.C.: Inter-American Development Bank, ch.8, pp.161-178.

28

Mutai, Henry (2003), ‘The Regional Integration Facilitation Forum: A Simple Answer to a Complicated Issue?’, Tralac Working Paper No.3/2003, July, www.tralac.org Panagariya, Arvind (1999), ‘The Regionalism Debate: An Overview’, World Economy, June, 477-511. Puga, Diego and Anthony J. Venables (1998), ‘Trading Arrangements and Industrial Development’, World Bank Economic Review, 12(2), 221–249. Radelet, Steven (1999), ‘Regional Integration and Cooperation in Sub-Saharan Africa: Are Formal Trade Agreements the Right Strategy?’, African Economic Policy Paper Discussion Paper No.20, July, www.eagerproject.com/discussion20.shtml Salazar-Xirinachs, José M. (2002), ‘Proliferation of Sub-Regional Trade Agreements in the Americas: An Assessment of Key Analytical and Policy Issues’, Journal of Asian Economics, 13, March-April, 181-212. Schiff, Maurice and L. Alan Winters (2003), Regional Integration and Development, Washington, DC: The World Bank and Oxford University Press. Schiff, Maurice and L. Alan Winters (1997), ‘Regional Integration as Diplomacy’, World Bank Policy Research Working Paper Discussion Paper 1801, August. Shams, Rasul (2003), ‘Regional Integration in Developing Countries: Some Lessons Based on Case Studies’, HWWA Discussion Paper 251, Hamburg Institute of International Economics. www.hwwa.de Stiglitz, Joseph E. (2004), ‘New Trade Pacts Betray the Poorest Partners’, New York Times, 10 July 2004. www.nytimes.com Tenier, Jacques (2004), “Les relations entre l’Amérique du sud et l’Union européenne”, La Chronique des Amériques, No. 7, February, Observatoire des Amériques. http://www.ameriques.uqam.ca/pdf/Chro_0407_UE-amsud.pdf Torrent, Ramon (2003), ‘Regional Integration Instruments and Dimensions: An Analytical Framework’, in Delvin, Robert and Antoni Estevadeordal eds., Bridges for Development: Policies and Institutions for Trade and Integration, Washington, D.C.: Inter-American Development Bank, ch.6, pp.119-135. Venables, Anthony J. (2003), ‘Winners and Losers from Regional Integration Agreements’, Economic Journal, 113, 747-761.

29