Monday, November 3, 2008

Africa shouldn’t follow EU integration model

AFRICA should not follow the treaty-based integration like the European integration because it requires strong political harmonisation, which is lacking on the continent, international business consultant Trevor Simumba has said.

Mr Simumba said Africa should strive to push for integration by emergence, because the treaty-based integration agenda would not work in Africa where political push to getting every player on the agenda was elusive on the continent.

He said in an article published in the World Trade Net Business Briefing publication that Europe developed pure economic integration by following the treaty-based integration because that continent’s agenda was backed by a political obligation.

“Europe’s overriding objective was political and military; that is, to use economic integration to overcome the historic animosities of its chief protagonists and thus render future wars impossible,” he said.

Mr Simumba, who is managing director of Africa Trade Advancement and Development Partners, said over the past few decades, sub-Saharan African countries had tried various arrangements to promote economic integration, but most of those arrangements had focused on promoting greater intra-regional trade.

He said the experience for Africa had brought out the question of whether to follow integration by design or integration by emergence, as well as the relative importance that was given to the promotion of intra-regional trade and investment.

“Most of the regional trade agreements in Africa take European integration as the template for regional integration,” he said.

Mr Simumba said that was the point where African integration would fail because the European history was different from the African one, hence there was need for the latter to follow its own model of integration.

He said in the article that the significant distinction was that all participants in the European integration process had been democracies with relatively open markets and strong manufacturing base, which was not the case in Africa.

The issue in Africa related to the choice between an approach based on treaty obligations of participating countries and an approach that emphasised harmonisation of policies and regulatory frameworks, wherein countries acted collectively and in unison within a common framework, but in the absence of formal treaty obligations.

Mr Simumba said the key weakness with the treaty-based approach was that it had a built-in bias whereby the slowest reformers generally set the pace of integration of the group.

He said sub-Saharan Africa had tried intra-regional integration under the Cross Border Initiative (CBI) of Eastern and Southern Africa, between 1993 and 2001, whose basic thrust of this approach was to let the faster reformers set the pace of integration, within a framework of harmonised policies that accepted the principle where different subgroups of countries could proceed at different speeds.

He said the 14 CBI participating countries were able to generally make good but uneven progress in removing the barriers to trade among themselves, while in parallel also lowering the barriers to trade with third parties.

But since this approach relied exclusively on peer pressure and example effect without any formal treaty-based enforcement rules, the reform lock-in mechanism was not robust enough to ensure long-term consistent performance.