The future of economic co-operation in Africa

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UNITED NATIONS

AFRICAN INSTITUTE FOR ECONŒUC OEVELOPMENT AI'JD PLANNING

0 A K A R

THE FUTURE OF ECONmHC CO-OPERATION IN AFRICA

BY

DR. H. M. A. ONITIRI

IDEP/DIR/2515

FEBRUARY 1973

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IDEP/DIR/2515 page 1

THE FUTURE DF ECDNOMIC CO-oPERATION IN AFRICA

It is hardly necessary to make a case afr8sh for African economie co-operation or integration, Not

only is the case self-evident it is also generally accepted by most African leaders as an article of faith. And there

has been no lack of activity in recent years on this front. For example, the East African Community, in spite of the curre~t political and economie problems besotting the organisation, is still a growing concern and the possibility of its enlargement to include Ethiopia, Zambia and Somali is being seriously considered; in 1972 the West African Economie Community comprising seven countries of French speakin9 Africa was established, and a similar group comprising Togo and Nigeria was established in the same year , with the aim of associating other countries in \Vast Africa. A summary of the existing situation as regards the various groupings in Africa is shown in Annex A.

2. In spi te·'. ~f'· the se develop~eSts, how~yer, real progress has been.modest and inter-African trade, as well

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IDEP/DIR/?515 page 2

as inter-African co-operation in other economie spheres, have not led ta much tangible res~lts. In looking again at the situation, and in making proposals for future policies, there are a number of preliminary questions that need to b8 answered. Firstly, is the case for economie integration more urgent nbw ..

than.

it .. bas ever.. .... been ? . Secondly, what are the major obstacles that inhibit fËi'~ter progress in this sphere ? Thirdly, what have been the effects of the association of several f-1frican countries with the Eurcp23n Economie Community, and what are the l:.kely effects of the new agreements ta be negc:itiabd as fro;n t\ugus t 1 ~7:3 ? The se qu~stions a~e ~er~in~nt t~~ considerati6n of new proposals for future action.

3. Two recent publications bearinq on this subject have shed some light on these q~esttons. : The: first deals in a general way with the problems of econ9mic co-operation

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in developing countries, ' while the· second deals s~ec~ cl~ally with the African situation.2

·As the analysis and proposals put forward in these documents are likely ta be the basis of current discussions of these problems, it may bG helpful ta make frequent allusions ta the argunmnts and proposols in these documents.

2

United Nations, Committee In 0Gvelopment Plann:Lnu "Econornic~

Co~operation Schemas in Ocvslopinq Regions: An Appraisal of Mechanism, Policies and Problems" Document No. E/AC. 54/L. 54 26th January 1973.

Intra-African Economie Co-opection ::md /\fricrt' E.' Rela~::i.cns

with The European ËêëinD11lic CŒïÎffiJni t>-::;····G'n"itèd · ·~~-;:;:·~·ï'ê]î-~s --·-·•· Economie Commission forAfrië2'7o8'êërr'J.-:Or 1972,

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The Urgency of Economie Co-operation

4. Africa emergod from the first UN development decade os the region registering the lowest rote of growth, and the indications in the first two yaors of the second development decode ore thot the Africon position hns changed little or not at oll.³ Furthermore, as is now well known, Africo hos the largest number of countries designoted as the least developed omong the developing countries. This latter problem has been portly aggravated by the smoll size of a large number of African economies as wall as the lond-locked position of sorne of them. While special measures have boen proposed ta deal with tho problems of the least developed countries as wall os those with no access to the seo, it is being emphasised more and more thot such mensures, to bo full; e-ffective, must be conceived wi thin programmes of regional economie co-operation or integration. Indeed, the promotion of regional integration in developing countries is an essential part of the International Oevelopment Strote~y and the developed countries have given explicit commitmants ta give special

support and assistance in this connection.4 3

. 4

S~e for example United Nations, Planning, "Oovalopinf} countri:::s

l~pmont Strot~g!' Occumant No. 29/1/73 .

Committee For Development and the International Deve-

E/

AC. 54/L. 51 c.nd 1\dd. t of' Poragrophs 39 end 40 of the International Oevelopment Strategy reads as follows:

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(39) "The developing countries will continue their efforts ta negotiate and put into affect f~rther commitmants for instituting the schemas for regional and

subregional integration or mensures of trade expansion among themselves. They will, in porti- cular, eloborate mutuall y beneficial and preferential trode arrangements which foeter the rational and outward-looking expansion of production and trade, and avoid undue injury to the trading interests of third parties, including third developina countries."

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5. In looking aheed to the long-tarrn development of the African aconomy, it ~s extremely difficult to sae how sorne of · the crucial problems of economie development such os industrialisa- tion, energy supplies, transportation and management of river basins, con be effectively resolved outside schemas of regional economie co-operation or integration. It must be concluded then thot the achievements of higher degree of economie integration has bocome a fundomental , and even indispensable requirement for the future of African development.

5. The present t ime is pnrticularly opportune for looking afresh at these problems, because of 1) the forthcorning

negotiations with thG EEC; 2) c~rrent renegotiations of the economie and monetary agreements between France and the

French-speoki~g African states; 3) current negotiations for international monetary reform and 4) the forthcoming GATT negotiations on the lowering of barriers to world trode. A central concern of Africon governments during these negotiations should be to achieve arrangements and policies which would

facilitate the process of African economie co-operation or integration.

4 (contd.)

( 40) "The developed market economy countries will, through the extension of financial and technicol assistance or through action in the field of commercial policy, support initiatives in regional and subregional co- operation of developing countries. In this connexion, they will specifically considor what halp cen be given to any concrete proposais thot may be put forward

by developing countries. In the efforts of developing countries to carry out trade expansion, economie

co-operation and regional intec.JTOtion ornonq themselves, the sociolist countries of Eastern Europe will extend thej_r full support within the framework of their socio-economic system".

(International Development Strotegy, United Nations,

Nevj York;" 1970.

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The Problems

IOEP/DIR/2515 page 5

7. The problems that have slowed dawn the progress of Africnn eco~omic co~operation can be ~J~merised under six heads : firstly, -thore are the doubts ànd uncertainties about possible 0nins and lasses ta individuol co~ntries; secondly, there is the lock Df sufficient fin~ncial resources to invest

·~-iniutteneously on a wide ronge of integrated projects, and

ta cushion possible initial adverse affects of integration on sbme of the participating countries; thirdly, there are the differences in commercial policies as well as in the attitudes towards foreian investors, some. of. them arising from di ff:3rent colonial axpe~iences; fourthly, there is the law leval of integrated infrastr~1cture( roods, air transport, shipping and telecommunication) , a consequence of the colonial pattern of econo~ic relatio~ships; fifthl~, there is the adoption of

different, economie systems in the various countries, particularly differences in the relative roles of government and private

enterprise (partic~larly foreign ~ri~ate)enterprise) in domestic econ,ornic activity. Finally, there is the fear that economie integration may give rise to large-scefle migration among Afric.::n cou.ntries which, whatever its beneficial results, moy have some adverse affects1 particularly in areas where local entrepreneuriel ability has been slow to develop.

The solutions of these problems cannot pë ·immsdiate;

they would have to be worked out over a number of yeats

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throu~gh op'propriot~ institutionai ':arrbri~ements '·. whfch give e'xplid.t"· recodnition to the' f~ars·: a~d doubts of individual countrîes, hoviever illusory some of ·these may appear to be; ·

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S-u ch insti tutio;ncrl arrang_smerits 'could ·be conceived_ at three levels - cont_inent-wide, ro•;ional ^E:J.[lcj_.s;.tb-reqioncl - and +:he oiJ j.]cti,;es 'c·! be pursued would · huve to inolude, os the bearest minimu~1,

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cGncerted pla~-~ to imprcvG inter-P, fricon transport and communicatiDn network through tha completi~n of vital l inks, improvement

of existing links, and ·the granting of subsidias for services and progr0mmes which moy be

~nprofitRble in the early ye~rs of 'oparct icn;

2) Œgrearnent or c code of conduct and ço:nrnon principles w{th respect to gover~ment support for domestic enterprises, attitudes .t o

for~ign investors?- and commercia.,l agreements with third co~ntries;

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.3) .aor:~emen_~ t Or.J th_\ e principles 1nd co nd i tL!:ls

for the joint ovmGrship of :3ntc,rprises by severol

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4} Cl· c>';-..Jenti.on on i_nter-A-fricèn .migration to deo.l with the; t:r:-eatment. of rnigrCJ.nts. ond the conditions tor r_' _. epRtriotion_. ,

Afr{co ond the ËEC.

9. Africn·• s n:3lotions with the .EEC presents specü:ü

pr.ot:;Jlems for African ecor.omic integration and urqent decisions hnve to be made on these problems in view of the negotiotions on new agreements which are to begin in August 1J73. The se

problems hove been exomined in n recent pnper (see Annex B) ond it will only be necessory in the present pnper to drnw

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ICEn /DIE/2,::Sî ~-j

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attention to sorne of the conclusions and suggestions thct ore or' relovnnce to economie co-operation in Africo.

10. It must be pointed out at the onset thot the cloim thot the D.ssociotion of Africon countries with the EEC is likn::.; to promote economie integration among the Associated stotss, is not borne out by the experience of the post fifteen yecrs

du:~ing .·Nhich severol A frican countries have been in continuous association with the EEC. The Association Conventions (the pre-independance Convention signed in 195~. the first

Yaounde Convention signed in 1963 and the second Yaounde Convention sinned in 1969\ set ûp a series of free-tre.de

nreas between the EEC and each of the Associated states. They did not automaticolly lead to the estoblishment of free-trade orens amono the Associated stotes themselves. The dynamics of the relotionships between the Associated states ond the EEC, nursed os they have been by the flow of EEC oid, are somewhat different from the dynarnics of the economie relotionships omong the Associated states themselves, porticularly in the absence of a developrnent fund to act os both catolyst and inducernent. It would seem thot a more fruitful line of approach would be to consider how relationships with tha new Europe con be rnodified during the forthcoming negotiations so that they would contribute in a significant way to the process of economie integration in Africa.

11. But how con this be achieved, since it is not likely that all African countries will choose the .same type of

relotionship with the EEC ? In the absence of a common

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J'DEP/OIR/2515

<:-tppruoc;h to '.::he EE.S in cerms cf choosing the sorne type of

re~ c;:t:i onshif=;, an o~ternntive approoch would be for t-lfrican countries

to ciEl ;"ü;e cort':l:i_n c::omm::m principles which would be respected

i•l t:1e diF'fe:."'?ilt t;pes of agreements wi th the EEC. In so for os -':he objectives of economie ir>tegrotion in Africn nre concern2d, it wnuld oe desirable thot such 'common principles'

to reve:r:se ;Jreferenco, 2) Gtt:i_ tud;:::s to the proiJisions on right oç establishment and the movemAnt of lnbour and c~pital,

3) the concitinns of o::c:ss tc -~h..:~ '.::..J:C::J~j8CHl D.:oval:::p~.lGnt Fun::.~'

onrl 4) explicit recognition thot associatod countries con accord to themselves and to non-sssociated countries more fovouroble tPi'!TIS thun oore occorded tc -::he EEC' should this be nacessory in the interest of economie integration among thsse countries,

of the present Yan•.mde Convention ore the nid and loons provided by the ~uropean Oavelopm~nt Fund and the European Investment

For mo.ny of the se cotmtries ₁ the feor of losing such aid is going to be o. crucial factcr in their decision as to wha·'c; form of ;_~elatiorr'ship they should choose wi th the

an}_arged Ccmmuni ty. It is ":his fear which seems to hove

prompted the guarontees given by the EEC to the existing associates in Port II of Protocol 22 of the Treoty of Brussels, nomely

thot

"The accession of the new Member States to the Communit; and tha possibla extension of the ~olicy

of association should not ba the source of any weakening in the Community's relotions with the

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IDEP/OIR/2515 page G

· f\ssociated /\rrican and Wü éigasy s'tatas

v:Jhich.,.a~e po.r;ties to the Convention of AssociÉ:d~io¹;-{ sign~d on 29 J·_:ly,.1969."

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"The Community:-s. relatio!}s; with' the AÈ3socia.ted ;'\fricon 'and Malagasy States ensure for

tilos' e

'Stntes a rnhge of advantoges and qr8 based on struc~L:res

whi~h give .the A~sociation its distinctive cha~acter in the fi~lds of trade ~elations, financial ond technicol cooperation o~d

joint institutions."

"Ths Commun:i,.ty' s objective in it~s poh .cy of as~ociation sholl remain the saf~guording

of ~hét hos b8e0 achieved nnd 'df the funda- mantr,:l princ:i..plras· r;:::ferred t.:::: etbove."

13. In the, intere~t of remchi!}g common agreements on certain vital principles, it may be desirable for the non- Associated African countries to support the guarantees to

the existing Associates os regards th~ laval of nid from the. European pevelopment Fund. Since the Fund will undoubtedly be enlarged with the enlargement of the EEC

~he ~~ceptance of such a guarontee need not necessarily offe~~ adversely the fl~w of EEC aid to the new associates • 14. ' ' The guarantees are lèss tangible with respect

"to 'thG t:tade conces!3'ions granted· by th8 EEC and, indeed,

they~re nlmost·m~a~inglGss, si~c~ the G~tension of concessiGns to othe'r countriès ih 1\fr:ica, Latin America and 'As-ia¹^; oennot but affect whatever bGnefÜ's are derived by the eX:iJsting 1\ssotia-ëes from the old concessions.

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IDEP/DIR/2515 pa go 10

15. Agein it is possible to support the guaranteas to existing associatas on aid benefits without necessarily supporting the stipulation that the new agreements should be "based on structures which give the Association its distinctiVE character in the fields of tradG relations,

financial ond te~chnical CiO"'-operation and joint institutions".

It must be rememtered thot these structures were estnblished whan the Associated countries were still dependent colonies and that they hove remained basicelly unchanged in subsequent nag0tiations after independance. The enlargement of the Gommuni ty and the wideninc; of EEC relationships wi th A fl~icon

countrj_es should provide a fresh opportuni ty to ra-examine~

the sa strucb ·res and to ^~no^dⁱfy th8m in o wa y th at would remove s~spicions of neo-coloniolism and pove the wa; for a more lasting relationship betwaen f1frica and Europe. Su ch a re-examinotion calls for the sorne kind of flexibility on the part of Europe os j_s being demanded from Fro.ncG in the

renagotiGtion of the existing ar;reements for econor.lic co-operation with the French-speoking Africon stctos.⁵

16. Such flexibil~ty is particulerly desirable as raQards the conditions for the disbursament of EEC aid. Considering tha expandad capocity of the enlarged Community, the declaration of the Community on dev~lopmant nid at the .last European

summit, and the somewhat different economie experience

of the Commonwealth to which the offer of association has beon mada, the~e would seem to be a go~d case for separatinq the aie programme. of the Communi ty fror;J a partïcular type of ;-o,ssocintit --,.

Indead, one could envisage the development oF the presant arrangement into an EEC Programme For Economie and Technical Co-operation with Oevaloping Countrias. The pror,rmnme 5 This flaxibility is stronaly advocated by the FrGnch

newsoaper La Monda in a leading article in its issue of Tuesd0.y, Febr'.Jary 6th 1 I)2, under the ccption "Donner et Ratcmir".

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could be chorged net with general responsibility fo'r

development finoncing everywhere, but with specifie respon- sibilities based on priorities to be established by the Community. s~ch priorities could toke the maximum occount of the problems of small economies, monu-cultutures, land-locked countries, and the leost developed among the developing

countries . .. The proQramme could also provide special support and assistance for economie integration schemas porticularly in Africo where such sche;nes are fundomentol and even

indispensnble to real economie advance. Such o divestment of the trode and aid programme of the EEC from o particular

typ~ of relationship with the Community will have several advsntages. !t will ensble the Community to be more flexible in supporting a programme thot falls within its priority, irrespective of the particulor form of relationship_which may axist batween the country or countries where that

programme is situated, and the EEC; it will enable the Community to suppcrt regional programmas cutting ocrciss nottonal boundories even though the countries involved may hove different forms of ass0ciation with the Cornmunity, rmd it will o.void tho criticism thot EEC o.ssisto.nca is the priee for c porticulo.r fonn of

ossociotj_on.

17. Tha opportuni ty of the forthcomîng ne go tintions could o.lso be used to toke the sting out of the principle of

reverse which seems to hove caused for greoter conttovarsy than it is worth in real terms. This could be dono in two ways: by rnointaininq :'C'eversa preference in principla, but Gt .::

much reduced leval - soy 500/o of the existing ones - and by suspsnding whotaver is left pending the outcome of the GATT

negotio.tj_ons DG intorno.tiono.l trode.

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IDEP /DIR/2515 psga 12

1J. The provisions about right of establishment etc.

could be modifiad and confined only to ossuring non-discrimination omong EEC member countries, rather thun seaking the seme

treotment for EEC member' s qs is occordad by the A3socicted states to their own nationals.

19. The proposed arrangement for primory commoditiE.s in Part III of Protocbl 22 of the Trenty of ?nussels could have two essentiel feotures: abolition of the remainino duties on the imports of tropicnl commodities which do not ccmpete with internnl production in the Community Gnd ~

considerable enlargement of the access to EEC markets with respect to t~ose commoditias coming within the EEC's

common ogriculturol policy. This will considerably narrow the differences in the trGotments accorded to countries choosing different types of relntionships with the EEC and pave the wny for grentar cc-operation nmong these countries.

Sorne Specifie Proj:Jo~als

20. Time is going to run very fast in 1973, ccmsidering all the major negotiations that ore to begin ir. the course of the year. Afrtcon countriss ~ra thus 1oing to hova very little time to toke decisions thot will determine tho shape snd pattern of thair economie developmant for decedes to come. Mcny of the crucial problems of economie inteorotiun in Africo will not be reE>olved in L 73, but thG d2cisions thot will be token in the course uf tha yaar mey well

determina whethar a real stort will be made in solving thesa problems. It hos clready been sL'qgested thot c:.ll A frican cuuntries should subscribe to certain basic principles.

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IDEP /DIR/2515 page 13

essantinl for the~ future of i\fricon econcm:ic co-·-opar~ltion,

which should guide them in their negotiations with third porties. This is one of the two major steps thot con be token in 1373.

21. A second major step is the setting up of oppropriote institutions for ecoGomic co-operation end inte0ration within which 'J.t least grt.ducl progress con ba n1od3 tCJwnrds ^the:;

genero.lly ^acce~ted^~J^bjectiveof real econm;ic integration.

In this connection, the ECf\ RepCJrt6

~xomines

three

possibil it ia::.~:

1. "The associated Africon countries (Yaoundé-type of association) thamselves will constitute o big /\ fricon frse tr'u~la nrr:-Jo.; ⁿ

EAC, UDEAC, end ~ay be CEAO) - moy be tosather with Nigeria - moy estoblish a free trade areo whareof the other f\fricor. countries con be members;"

3. "The present system with the present groupir>IJS moy be preserved."

The Report concludes with o recommandation for the estchlish- ment of on /\fricon Free Trode f\reo with the existing groupings as well as individuel countries not belonging to any groupings, os compon~nt members. This conclusion is supported by the following observations:7

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"To estoblish a free trade aren of many Africon

count~ies should not be so ~ifficult technicnlly. The trade betwean AfricL'n States tod::-;y is so

negli~ible thot the loss of revenue ct the introduction

ùp. ~it_. ,paragroph ,30 •

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IDEP/DIR/2515

pr:grJ \1.~- ·.··.'. ··. ~-. ·

é.lf the free trode system will be insiqnificcnt. · Fer the seme reo.son

d.is;t~rbo.nce1^E) ^.^Dfthe present system of production will be nenligiblo.

, .· RLile·s ôf origÜ1 will n:Jt re ise problems.

It seems noturnl to occept the s~ma r~les os those which ore used vis-o-vis EEC."

"ThG _establishment of a big Africon free trode a';.eo. will th~ref~re at the moment of its establishment nu~ create major

problems~ It will, however, provide a frcimework for the future developmflnt of

· Africhh trode and Africon industries."

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great deal of force in this argument althouqh, S~;th~ Repcirt itself seems to recognise, such a

continent-0ide.Free Trode Aren is not likely to leod to subston- tiol results in the absence of o major improvement in the

existin6 t ransportation and communication links among

.A fbican ^iCOt~^ri^tr'ië^s. There ore indeed other conditions for

the~success 0f ~uch n giont effort.

22. One o~ the conditions. olso recognisad in the

~sport, is the institution of adequate protection for the wooker members of the Free Trode /\rea though various

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exceptions and quolificotions to the general rules. Th erG

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mony woys of doinq this such os. ttl8 :tro.nsfer tnx dnd the mdintenance of temporory protection by the weaker rnëmbers, rnore of which have proved very sçti~factory

in practica. But the reolly crucial mensure is the use

o f

financial onu technicol assistance to help the weaker states to fit rnure eosily intc such Q free-trode arrangement: The establishme~t cf such o special

progromme for the weoker members is indispensable for the

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IOEP/DIR/2515 page 15

success of such an arrangement.

23. The establishment of a continent-wide Africnn Free- Trnde Are cannat be regnrded os a substituts for the

strengthening of exisiting regional integration schemas or the establishment of new regional schemas. Bosicolly, their lines of development are called for at the regional lev el. These con be summarised as follows:

i) The consolidation and strengthening of the East Africon Economie Community and. its enlargement to include those countries which have nlready i~dicated their willingness to join os well as other independant

countries of Southern Africa.

ii) The formation of a West African Economie Community comprising nll the fourteen countries thot were to be included in the West African Regional Gro!Jp of 1967 and occepting the existing groupings in the area os members until the separote groupings con merge into the new Community.

On first view, this would appear to be a difficult tosk, but closer examination would show thot, given the politicol will and a commitment to the future prosperity of the oreo, it is for from being an impossible task ..

iii) The formation of a Central Africon Economie Community comprising the countries nt present

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IDEP/DIR/2515 poge 16

belonoing to the Central African Customs and Ecunomic Union · ( UOEP,C) and the se belunging ta the Central F1 fricon Economie Union. Agnin the new grouping could be bosed on the existing groups until these

latter con be merged with the new arrangement.

iv} The formation of the North African Ccmmon. Market based on the ex~ensi~n ~f th3 oxistirg fAaqhreb qroufJ tc include the Dther c·Ju;ltries .in the North ~fricon region.

24. In each cnse - b:Jtil nt the c.or.tin::mt--•·Jids ,...~,.,

at the reqional levols, a number of subsidiary institutions would have to be set up on a permanent basis to deal with a number of crucial probelms, such os

i) transport cc-ordination, includinn ruods, railways, shippino and air transport, ii) co-ordination of industrial developmant , iii) co-ordination of economie policies, including

development plans,

iv) co-ordination of commerc.ial policies, including trade agreements between member countries and third countries,

v) the administration of special arrangements for weaker countrias, including the leost doveloped nnd tha lond-l~cked countriGs, and vi) co-ordinntion of reseorch efforts of nctionol

end international institutions in.support ~f

integrotion prograrnmes.

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2"' In eC'.cil ccsG, ::cn inventory of neods os regards

the exponsion of infrostructure - transport, energy, su;JpliGs etc. would hove to ba compiled with o view to

Severnl seeking foreign assistance for their implementation.

developad countries hove mede specifie commitments to suf)port such integration efforts, qui te apc.rt frcm1 the general commitment mode in the International Development Strctc:;gy. There is little evidence thot African countries hc.ve token advantoge of su ch cornrni tmants.

26. The Africon Developmont Bank should stand ready to give special support for such integrction schemas ond to goor its lending progra~ne to the promotion of projects that will further the interests of such schamo. The Bank moy even succeed in obtaining special financiol assistance both ' from outside Africa and frCJ:-,1 the more prosperous Africon countries, in support cf such projects.

27. The problem of African economie integration has been discussed for so long and sn mony general reports hove

baGn writtan, thot the next stoge in the axercisa should

c~nc~ntrate on dotoiled painstoking work on specifie issues to be tockled on o continuous bosis by permanent institutio~s

established ot continent-wide, regi~nnl and sub-regional lavals. The immediota consolidation of existing regional economie communities and the estoblishment of new ones, os nlreody proposed, os wall os the immediate establishment

~Jf on ,'\ frican Free Trode /\rea, will provide a sui table politicnl and economie fr~mework for such torgets to be nccom;:Jlishad.

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IDEP /DIR/2515

-~Sé-' e:.;ri r1~gran1J.]i:J!il ::J.i:rnf!fi~:q ... :' n·:;::;j:r(]-,, ·:: :' ; .. c.,Jrh:·;c; , :,

co~: .. :_;ç,.ü . :B:.:JJ:;;;:,:c;::; ~"A:n >~t':(jhdll;l~è!J:oc:ïmtTÎJJfnity:.Jdt 'ttlle r-egional -levèl

"' :::j::fu:f i:JQUti:-.<iVI1<:©1i:1tilt;r.:tnen:tl:iè):fr'EiÊ3..;-t:r-aQ!Ii:;!i:[réa i' rftay i:t;aki3J-'ïiibtë:' ~n two I•-;-,~;:Juj;'qjJ:a~· .tDJ~fll~tfljitd.--gh ;, s:t:tt~~y,c·ridtf-at:t!; ... take'll'e:i:Ss''-t-ime.

Cr·~·c:.i:r~'P'lowur~~,i >-.(ln~'Es$:ca'Jr.•~a':]~cgtl:fr-'"t r=ïs~-trtratle:lin·rühe or-:JG-iâlL year of

' c:::;r-4978 j' wt"neJ1."5oJ!'i11a'rijr dltl' âtr~ar!fg'emê-Htisi iàlhé' 1:5Efirig ··crit-ically

. '"· -.,--; =:.i: .. l8'xu{ninedi'; ~ct~c:.mev( QfJlfjor;turfiCt:y; rna·y .r\&'f · presènt-:1. ts:Sl forc:Jr another

. ~~Ltlsi'da.ttB ;;: t:':Jtn:ê-tMÈl .imdahtirnël/, A:frïda ,o·w!fbli'i

itisl-: vas· t

l"potential

reSJ:;jUI.rcg-s: ¹·tiint;J. â'f;J'"!fà·l:t'ly-.1fa-\/ou~able"'·bf.ÙÈ11ice' -l3S.twefé'r'f popu- lation and natural resources may wel·1J.cb8:!-id(r,;rtne¹!wayJ to being the vast underdevaloped region of the globe.

,Ï

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(20)

• 1

•

'

_•• .

Annex 8

s:~aet 5

---

l~fri ç_a ~outh_lf_J.h§:_j)_~§E?_

San~~3l ~frican Customs

i; :;f

j_~QD_~mj_~_UJl.~_o:~_lÙÏJË AC) , .! 9 JI;

Car;eroon

Central African Republic Congo (Pcoples¹Republic) Gabon

(Chad withdrew 1968)

East African Community (E~C), 1967

Kenya Tanzania Uganda

x Source

Main Features of·Economic Co-operation Schemes in Africa ~

IDEP/DIR/2515 Page \9 •.

·---· ---

1 nsti tu ti ons

Council of Heads of State Management Committee

(2 Ministers from each country) General Secrgtariat

Accountir.g Agency

East Afr1can Authority (Heads of State)

East African Ministers (one Minister and one Oeputv

Minister from each cou~try) Five Counci ls: ComrnJn riarkd; Communications; Economie Consultation and PlanniGg; Finance; Research and Social EA Legislative Assembly EA Common Market Tribunal EA Community Secretariat EA Development Bank

T ra de measu res

a) lntra-group trade:

free trade for crude ag ri cu 1 tura 1 p roducts and p roduds of industries subject to

"Tax Unique" regime. National import taxes levied on other products b) Common external tariff:

in effed; (reduced in 197C)

a) lntra-group trade : no tariff "transfer tax"

on selected manufactures; quantitative restrictions on certain agricultural products

b) Common externa1 tariff and common excise taxes in effect.

Sectoral Co-operation Heasures

lndustry Agriculture

Con su ltat ion on establishment of i ndust ri es

"Taxe Unique" regime fJr industries supplying regional market_ Comprehensive industrial development plan under consideration by governments (1972).

lndustrial licensing system (being phased out)

"transfer tax" for promotion of industry in Tanzania and Uganda lndustrial development financing by EA Development Bank EA lndustrial Research Organisation

EA Research Organisations:

,;gricul ture, Forestry, risheries, Veterinary.

1 nfrastructure

Master plan for regional transport and communication network under study

EA Corporations:

Railways Harbours Port and Telecommuni- cations Airways

~onetary, Find~ce

Fiscal measu:·es

~ion et a ry Uni on, Joint Central Bank (including Chad) .

Quarterly meetings of Governors of Central Banks.

Reciprocal balance of payments credits (avail- abb after uso of lliF dra Hi ngsrights)

East African Oovolopmnnt 3ank +; narcin0

t:\amber cou nt ri es currency notes freely exchanged at per without commission Financjal and capital transfers subject to national exchange control regulations (provided restrictions do not hamper operation of community)

SpJ:ial ~rov1s1cns in favour of less developed members

Fiscal ccmpensation paymbnts to Cent:al African Repuolic

"transfer tax¹¹ sys-tew for promotion of industries in Tanzania, Uganda.

EA Oevelopment Bank lending operatio1 (reauired bv sta:Jtes to 1-:loc2"e J7,5:ïo of lnans to aach of two less rkve1uped mr;mbers)

(21)

. . ^,

..

^.()

Annex B Sh1wt 6

Entente Council (1959) Dahomey

1 vary Coast · Ni ger Upper Volta Togo (since 1966)

West "frican Economie Co:nm unit y ( (,(1\.J) :

Treaty signed 1972,

· raplacas West ~frican

Customs and Economie Union (UDE~J) Treaty

Dahomey Ivory Coast Ma li t4auri tania Niger Senega l Upper-Va lta

Central ~frican Economie . Union (1968)

Chad Zai re .

1 nsti tu ti ons

Conference of Heads of State Commissions: Foreign Affairs Justice

Labour Public Works Hea lth

Arbitration Court Committee for Transport Secretariat of Mutual

Aid and Loan Guarantee Fund (also services other organs).

Conference of HeJds of St3te Council of ~1inisters General Secretariat

Ta be established: Arbitration Court Community. Oevelopment Fund

Council of Ministers Executive Secretariat Specialised Committees

Main Features of Economie Co-operation Schemes (contin~ed)

Tr0de measures

lndustry

a) lntra-group trade:

crude agricultural free

ad hoc arrangemer'rts for

products establishment of projects

b) Cor!;mon external tariff:

all members (except Togo) have adopted CEAù/U0Ek0 system (see be)ow)

a) lntra-group trade : free trade in crude material s

preferences for C8rtain local manufactures b) Common external tariff:

unified system ta be put into effect within 12 years.

a) lntra-group trade: ta be li ber ⁱⁱ¹i zed

b) Common ext. tari ff Ta be. established, no date fi xed

supplying two or mGrc countries.

Common industrial development strategy under study (1971)

Community lndustrial Development uffice proposed adoption of joint investment code in 1974.

preferential trade arrangement for selected products.

Common invastment Code p roposed.

Sedoral Co-operation :·ieasures

;ig ri cu ltrJ re

harmonized priee stabilintion J:Jlicy (1972)

i:c;at and Livestock community (with own institutions).

free trade in cru de agricultural products Community Agricultural Development Office.

under study

1 n frast ru du re

Convention on Raad Transport (1970)

Regional Transport Plan (study under preparation) Committee for Transport

not yet elaborated

under study

~onetary, Finance

· Fiscal ~easures

1 DEP/01 R/2515 Pa(.e 20.

Special provisions in faveur of l ess . deve 1 o ed members

~1embers of li/est ,,{rican fionetary Assistance from t·1utual 1-iid Union

Mutual ~id and Loan Guarantee Fund (1966)

\Yest Mrican Lonetary Union ( exœpt ¹~a li)

Establishment of Oevelop~~nt Bank und6r considera ti on

Common investmont bank p roposed

and Loan Guarantee Fund confined ta less developed countries.

Community Oevelupment Fund tc be established for compensation of revenus lasses resulting from establishment of new tax rates for i nt ra-q roup t rade.

Through proposed investment code and i nvest1nent bank

(22)

• 1 •

~

.

•

•• •

Annex 8 Sheet 7

North 1\frica and iliddle Easi

1 nstitutions

Arab Common

i·;a rket~ ~/

^Couⁿ^{ci 1 of}^{iirab E}^con^omⁱ^c^U^nit^y.

1 raq Jordan Syria UAR

Maghreb Group, 1964

~/

Algeria i'1orucco Tanzania

Lybia withdrew 1970

Commission of Permanent Representatives

Standing Committee on Plan Co-ordination (197J) Sectoral Committees Secretariat

Maghreb Permanent Consultative Committees

Maghreb Centre for lndustrial Studies

Maghreb Alfa Marketing Board

Sectoral Commissions and Commi Hees

Trade measures

a) lntra-group: in principle fully liberalized

b) Common external tariff:

in process of elaboration rrovisions for common customs legislation, code administration elaborated, not yet adopted.

Trade liberalization scheme under consideration

Main Features of icononic C0-o~aration Schemas

lndustry

F referenti al tari ff: to be introduced in 1974

Committee on Standardization

Sectoral Co-operation Heasures Ag ri culture

Free trade except tobacco Quantitative restrictions eliminated

Alfa Marketing Board

1 nfrastrudure

Joint Committee on Transport

rostal and Telecommunications Committee

Transport and Communications Commi ttee.

IDEP/DIR/2515 Pa,e ~.

'io,1ebt'j, ~inancial

Fi scct-1 i!l02.:>~n~s

Payments Uniun a~proved

but not implemGnted Bank for 1\rab Economie

Integration i ~ process of establishment

~·ionetary and Fiscal Commiitee

Special provisions in favc·ut Jf 1 ess d8velLped members

È./

The provisions are based on the recommend3tions elabJrdeG by the organs of the Council of Arab Economie Unity (!•!embers of the Arab League). The Common f'\arket institutions are identical with those of the Council of

i~rab

^Economie Unity.

~/

^Draftêcoⁿômⁱêⁱⁿ^tê0r.::ti0n treaty prepared for signature in 1970, has not yet been signed.

SOURCE United Nations, Commjttep, "Developing countries and the International Development Strategy~.

Document n° E/AC.54/L.5l and add. l of 29/l/73.

(23)

• 1

,.

,. .

IDEP/DIR/2515 pc.gB 22

1\NNEX B

AFRICA AND THE EUROPEAn ECGN Ol,/ IC COL-L UNlTY

THE CHOICES AlJD THEI R E,~PLICl\.TIGl'-! :.::;

rr~le prc)ble111s facing fUr·ican countries in decidin~~

what form of association to establi:_:h wi.th tl1e "='·-i;':.:::'-}:è, European Eco nomi c Com, 1uni ty i s not n easy on<:'. 1\."-:. t ,1 C·i:.r)~

the options off ered by the E. E. C • t o the i ndependent

!\.frican count ri c:.s follow rnore or l ess t he pattern that has been evolved wi.th veri ous African countries in the past t v o decade~, t hr::: wo rl.' ha~> changed in the meant ii11e and the old pattr:è'r:D. of association neecls to be re-examineci in the light of current und prospective developrn.ent~ in int~rnational

politics as 'JJ<'!l l as in int erna tional economie rel a tions.

Poli t i cal and Ec onomi c Background

T··:vo devclopn1ents of profuund signifi cance can be s ingl ed out on the political front . The first i ::J the enlarge.:L1ent of the E.E.C. it sclf . 'Ji th this dev.:::lopment , the CoùL.·.mni ty ha s t aken on a new and more polit i cal charact é~r, and ht::.:; set its.elf resolutely on the course to';.ranis a full Euro~e"E

polit i cal uni on whi ch \ïi l l enabl e i t t o ·as sert i t ::Jel f as cc di stinct -=ntity in international affairs. One of t h2 claus•:2s of the conununi q ue of the Europ _an su-.'{lnl i t of Oct ob er 1972, affi rr11s that

"The const ruet ion of Eu rop.:: y;i ll all o\r i t , in

conformity with it s ultimate political obj ectives,

(24)

IOEP/DIR/2515

page 23

t o affirm its personality while remaining f aithful t o i ts traditional fri endships and,

t o the allianc<::s of the lv.~ember States and

'

t o est abli sh i t s position in vro rl d a.f fé::i-rs as e. distinct enti ty det ermined to promot-:.: a b et t (~r international equi li bri um, re:-_;~:-::.ct; nr· · t he pri nci pl es of the Chart c-:r of the Uni tccl .___

Nations. The iï,e;:nb· r 3ta t (..:s of the ComïLunitJ ₁ t he driving ~oree of European const ructi on₁ af i' i rm t hei r i nt e~1t ion t o t ransf orrn bef ore the end of the present ~c:co.de the_ vhd ".::

p 1·

t hei r r d at · ons i nt o é::. 6urrY;:>e<ln lJni on".

i. s of cire_·::J at siu:üficft_~ nc\ô. to

the -.;:.rorlà, it i s of even great <::r [;ignifi.cance to .Aîrica ,. ·For t~r_

fi rst time al:most all the colonial po·.vers <rhic~l pl i:'T.~·:c(. t0-.:;:th:.t t o carve out the ~.:f.rican continent e.~nong thcms-:::lT . .-e·:;, :.1av·· C(,;L

i nt o a singl e uni on, dct ermi ned t o speak wi th one ·voi ce in i. "l.t ern at i onŒl a.f L:ii r s. 1\.n d t hcy ~l<.lve donc.: so at 2. ti i.iK: t hat Africa itsclf' i s still riddled wi th t he divisions perpetrated by its coloni al experi ence.

The second polit i cal dcvel opme nt i s the new det ent e

1 n -:: èC! co1 d \rar w hi ch i s nani ~est i ng i t self in r:w.ny areas, most es='eci ally ii.l AmericC!.' s rdations ·;;ith China and R.ussia, in the ru.proche:.TLeJJ.t between East and -:rest Germany, and in i:taproved relations ' ct':Ieen North e.nd South Korea~ This nc:v det ente has gi ven a ne·.;.r respect a bi lit y t o thE doctrine of non-· ali gnment a nd has caused many count ri es t o rec.d.j ust t hei r f or ~i JL

policies in a ';ray that would have: i.:.,-::"::n considercü. u~:t ·1~nkad

soli.1e five y<::'ar s ago. jfho w:ould have thought only .:J. f e-r y12J.rs a go t hat trips t o Chi na wo ul d bç;come ns f ashi mwb1 c c.:·, t hcy have bec orne t oday, t hat Am cri Cil uo ul C:. be sd 1 i rLE 1^~1o..nes t o China, and the.t tiH~ hugc multinational compnnie.::; ir~ th;~

1 sce the Sunday Ti:mes ( London) of Octobcr 22nC. 197;.~.

A full t ext of the Communique is given in Appendi x 1

1 1

(25)

. ^' _. _• _·

•

• IOEP /D IR/2:)1 ~

page 24

·1 est ern ·:rorld - the very bastion of capitalism - vrould be cloing th:::. bri sk business \rith the sociali st countri es that t hey .nr - doi ng t odny. .3uch are th<-: ch· mg es t hat have t ~ken

pl ace t hat . st at esmen who used t o saze suspi ci ously at ench ot h-.r t hrough the i cy, almost uncrossable chasms of the cold war,

are nov1 wa1Jüng affably, _ha:nd i_n h~_~d,_ ov"":r th~ __ old ··:féül of Chi na. Af ri en c&n onl y i cnore the sc devel opment s at i t s ov1 n peril and nt the cost of reduci llf> i t s collective ':rei ght i n ·int ernation.::tl .::tffairs.

:.:; ut the nc·H clevel opment s in i nt 0rnat i onal economie rel &t ions are no less important in the totc.lity of factors that African countries must consider in reactj.ng to th e offer of association by the E.E.C. ln the first place, the enl arse:1nc:nt of the Communityitself means th.::ttabout 70 por c-::nt- of the export s of i ndE:pendent Af ri can count ri es c..nd

60

·pc r cent of thei r i mpor t s, would now be wi th a single econor.lic bloc. This i s a matter of profound. significance which c all s for a rational deci si .. on by 1-û ri can count ri es a.s t o the pattern of t rade t hat t hey voul d li ke t o .devel op in the comin g years. In the second place, African countries vrould have to ensure that their form of association -...·Jith the E.E.C. does not in any way \reake n w·hat ever position they woul d li ke t o t a~~e, al ong vith ot her devel opi ng count ri es, at the c urrent. negot i at ions on international monet ary ref orm and e.t t he G.A. T, T. negotie.tions on •:rorld trade to be commenced l at er thi s y ar . Al ready, the exi st i ng syst em of reverse

pref e:rences, ·:rhi ch i s an i mp ort ant f cat ure of the present a s soci at i on L13re~m.cnt s wi t h t hr-: E. l~ • C, , hcs b(~en si nzl ed out as aï."l i :ü:portant filct or in Iu11e:rica' s Teluctance to i mpl cment the G n Eral :::;che1J1e of . Prd erences

fo r

d2vel opi ng· ·count ri es·, Fur t hermor-e, -the i ssue of "reverse.

(26)

J

IDEP/DIR/2515 poga 25

preferencr:::" 'J élS one: of the mnj or i s:::;ues giving ri.se to the shn rp di ff crenc<::!J bet ·..;re en the 1.Jni t ed. ~tnt es and thé E. "2 • C. a bout t ht:: fort hco;:ni il2 internat i onc.l t rade ne got i a.t ions. 1

ln t c:rpret at ion of the vc..ri ou:::; options

A si d-2 f rmn the internat i onnl polit i céll and c:conomi c d ev el opment s t }wt have t o be t aken i nt o -account , Af ri can co unt rie:;

vrould have to bé quite certain about the interpret ation to be gi ven t o the va ri ou s options, a.s speci fi ed in the Tr•'3ut y of i\.ccessi on, 2.nd the conditions ané!. qualifications attached.

t o t h e:1n.

The present Convention of Association (the Y &o unde Convention) expi res on the 31st of

J

nnu.J.ry

1975 .

Until then, the e'Xi .st i ng' ti:' ade rd ^[lt :i! ons of 'th<.::. ~G i adep<::ncl2nt Co:,:;L:.lonweal t: ~

co unt ri es li st ed. in lmnex V of t h-2 Treat y of Brus s :2l ::; ,;, i th t Iv

n re t o rc.112.i n unch.::mg~::cl. ln the .d e ant i:nt:, the se count ri r.:;s have t o b(~gi n nezot i at i on.s ·;rit h the enl arged Corn muni t y as f rom

l st Augu::~t

1972

about the ne·q relati ons to be cst ablished. F or this purpose, S(:ction 1 of Protocol N° 22 of th-::: Trea.ty of Brussel s offers the f-ollovin~ opti ons to the 20 indely::~nà. ..., c:nt

. . T

^~

Com.m.ŒlWe:n.lt h countries li ~;ted in .L~nnex V of tluc: renty.·

1

11?articipation in the ~onvention of J .. ssociation ';r hi ~h, upon the expi ry of the Conv ention of

lt s c;oci nt ion si gned o:rJ. 29t h

J

ul y,

1969,

':ii ll go vern r cJ at ions bet v een t b.e Communi t y and the .flssoci at ed

Poli c.y Pers· ect ive for l nt crnat i onal Trade a nd ·2conomi c e at i on.s, • C. D. ar i s, L.. -Jee chapt er or' t n.i s docurùent l"r::·prod.uced in Appendi ); Il •

.2 -

'or easc o ~ ref crence Prote>col 22 of the Trea.t y i s repro- duced in full in I .. pp endi x I l l .

••

(27)

' • .

• f • ·

IDEP/DIR/251~'3 pc:1ga 26

h.f ri cun e.nd L .d C.~élsy ~t -J.t ·~s ,.fhi ch si ::;:neè.

t he 1 at t r::r Convent ion;

nt :.J:: conclusion o2 or:.e or LlorE: sp:.::ci c~l

Convention of J~..ss oci c.tion on th~-; D<J.:ji.S

.-:: ~~ ~ _.._ . -·1 .--, r;'JO. ç .,.. 1 .-.J T~' ~::_: r,.. .. f·~ ... ,:_") t . . -,....; <·-· ' r--

0 .! .ll.r'Ll:_ .::_ L-...>Li OJ. Cùt .. ~• '--'• '""'• ~ -:ca y COi.lp .tl. .,l.1;,;

T ¹2ciJ:rocal ri:zhts and. oblic,c:.tionè: , particularly in the fie:ld of trc.dr::;

"t he conclusion of t rc..cle ac.reement s \"fi th a vi ew t o :f ü.ci 1 i t éct i ng .:.md :1'2·1d opi ng t :c·<:~d~::..

bet I:'Jeen the Co:mmuni ty and dwse count 1:--i ~-:s."

T he off er in ~e ct ion l of Prot ocol 22 i s .suppl e- :.·:12nted hy tlv.: ·;;>Tovision in Part Ill of the Protocol which

stat es thé~t

"Th(~ Co:c.nimnity wi ll havC:: as it s fir~t purpose t he .s;::~fe-guarding of the interest s of élll

t h c count r1 r'"s ref errc.d. ^to in t hi .s Proto cc..l

'J~w~;;,:: cconot.tü es depl':.;nd-to a· consideration

eè:t ent on the r::xport of pri ~11ary product s, and p art i cul arly of sugar. '

"The que.st ion of Du gor --:ri ll be sett l ed wi thin t hi s f rü.me\·ro r k, bec. ri no in rai nd Yri th rea:ard t o ezport s of sugar· t h.e ~ i uport ance of t hi~

p roduct f or the eco11.oLti es of ::;everal of the:: se c ount ri es and of the Co mnwn '.'feal th c.ount ri ·:: s in parti cul ar. "

The se options an :. qual if i :::d. by t h2 guaro.nt ees gi '/C:n

to exi sting associilte:; ::tnd othe:r conditions sp(:::cifi c:::d ^{i il} Fart 11 ( 2) of Prot ocol 2.2, wh i ch ar e t: at

"The accession of the nev i_,_:cmber .Stntc~.J to thç C omm unit y and the pos ::;i bl c ext e::nsi on of the::

poli cy of il.ssoci at ion shoul d not be the ~;ol~:ccc

oi" any vreakening in th::: CoHmunity' .s relation:::

--.:rith t h·2 i1.ssociated. Africcm -:>.nd :.-.,o.lazcsy Stc:.tcgy

·:fhic:1. are parties to the Convention of i\.ssociation

0 i r_:neG. on .29t h

J

ul y 1969¹¹^, c.nd t hat