Compliance with International Trade Obligations. The Common Market for Eastern and Southern Africa
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1 Compliance with International Trade Obligations The Common Market for Eastern and Southern Africa Henry Kibet Mutai KLUWER LAW INTERNATIONAL
2 About the Author Acknowledgments Abbreviations and Acronyms Introduction and Overview xv xvii xix xxi Chapter 1 The Role of Law in the Conduct of International Trade Relations Introduction International Legal Process Compliance and the Nature of the 'Managerial Model' Relative Normativity and Compliance Central Elements of the Management Strategy Reporting and Data Collection Policy Review, Assessment, Participation and Supervision Capacity Building and Technical Assistance Dispute Settlement The Adaptation and Modification of Treaty Norms The Role of Institutions in Securing Compliance Factors Influencing Regime Design The Minimization of Transaction Costs The Enhancement of Credibility The Modification of Political Strategies 16
3 viii Table of Contents Incomplete Contracting and Uncertainty Safeguarding Sovereignty The Promotion of Compromise Summary International Relations Theory, the Creation of Regimes and the Effect of Law on State Behaviour The Relationship Between IL and IR Approaches Realism: Agreements as Reflections of Underlying Power Distributions Institutionalism: Agreements as Contracts for Securing State Interests Constructivism: Agreements as Covenants for Creating State Identities and Interests Liberalism: Agreements as Embodiments of Domestic Interests Conclusions 26 Chapter 2 Regionalism, Multilateralism and Free Trade - Theoretical Perspectives Introduction Regionalism: Regional Integration or Regional Cooperation? The Economic Justification for Global Free Trade The Economic Rationale for Regional Integration Theoretical Models of Integration Market Integration (Customs Union) Theory Development Integration Theory The Economic Effects of Regional Integration Regional Integration, Market Size and Economies of Scale Integration and Traditional 'Gains from Trade' The Effect of Regional Integration on Economic Growth The Effect of Integration on Industry: Agglomeration The Effect of Integration on Incomes The Role of Integration in Stimulating Investment Factors Affecting Benefits Conferred by Regional Integration Choice of Partner(s) Choice of Form of RTA Number of Trade Agreements Entered Into External Trade Policy Stance RTAs and Taxes 45
4 ix 2.6. The Political Economy of Regionalism (The 'Multilateralism Versus Regionalism' Debate) Domino Regionalism Regionalism as Insurance Trade Blocs as Forums for Increasing Negotiating Strength and Facilitating Negotiations Trade Blocs as Forums for Negotiating Tactically Regionalism as Politics Peaceful Relations Regional Integration and the Nation-State - The Issue of Sovereignty Other Political Factors Conclusion 53 Chapter 3 The WTO's Regulatory Regime for Regional Trade Agreements: A Managerial Perspective Introduction The Status and Function of the MFN Principle in GATT History of the MFN Principle Prior to the Formation of GATT The Incorporation of the MFN Principle into GATT: Compromise Developing Country Grievances: Legitimacy of GATT Rules Called into Question The Impact on Legal Discipline of the Wider Policy Changes The Substantive Rules for the Establishment of RTAs The Substantive Legal Requirements Interpretation and Clarification of the Substantive Rules Substantially all the Trade (SAT) General Incidence of the Duties and Regulations of Commerce Applicable Interim Agreements and the Meaning of Reasonable Length of Time The Approval of Non-Conforming Agreements Summary Norm Implementation: The Procedural Rules Data Collection and Reporting: The Notification Requirement Nature of Data to be Provided and Identity of Provider The Examination of Notified Agreements: Forum and Procedure Monitoring and Supervision of Compliance 83
5 3.5. Dispute Settlement and the Regulation of RTAs Competence and Jurisdiction to Determine Consistency The 'Lex Specialis' Argument in 'Turkey - Restrictions' The EEC's Preferential Arrangements and the Dangers Inherent in Preferences Background The EC - Conditions for Granting Tariff Preferences Dispute The Panel Report The Appellate Body Report Conclusion 93 Chapter 4 Regional Integration and Trade Liberalization in Eastern and Southern Africa: Order or Disorder? Introduction The Nature of, and Rationale for African Integration Shared Identity Institutionalist Considerations: Economic Growth and Development An Overview of Selected Regional Trading Arrangements The African Economic Community (AEC): Supra-Regional Regulation History and Nature of the Treaty Institutional Framework The Liberlization Programme The Southern African Customs Union (SACU): Hegemonic Integration History and Nature of the Union Institutional Framework Trade Liberalization Programme The Southern African Development Community (SADC): Development Integration History and Nature of the Organization Institutional Framework The Liberalization Programme The East African Community (EAC): Aspirations of Federation History and Nature of the Organization Institutional Framework Trade Liberalization Programme Alternative Approaches to Integration and Trade Liberalization The Regional Integration Facilitation Forum (RIFF) 120
6 xi The Cotonou Agreement and its Implications for Trade Liberalization Summary 123 Chapter 5 The COMESA Treaty: A Managerial Perspective Introduction Background: Nature and Objectives Historical Development of COMESA: From Preferential Trade Area to Common Market Nature and Objectives of COMESA Membership The Institutional Framework of the Common Market COMESA Organs Norm Formulation in COMESA Source of Law Law making with in COMESA Norm Implementation and Dispute Resolution in COMESA The Supervision of Implementation and Compliance The Role of the Secretariat in Securing Compliance Dispute Resolution and the COMESA Court of Justice The Relationship between COMESA Law and National Law The COMESA Economic Integration and Trade Liberalization Agenda The Intra-Regional Trade Liberalization Strategy The Most-Favoured-Nation Principle in COMESA The Elimination of Customs Duties on Intra-Regional Trade The COMESA Rules of Origin The Elimination of Non-Tariff Barriers (NTBs) to Trade Establishing a COMESA Customs Union The Customs Union Roadmap The Common External Tariff (CET) Developing a Framework for the Administration of the CU National Treatment Unfair Trade Practices: Anti-Dumping and Countervailing Duties Serious Disturbances and Safeguard Measures Derogations 163
7 xii Table of Contents 5.6. Relations with Third Parties: Institutional Linkages Relations with the WTO Relations with Neighbouring Trade Blocs Relations with the EU: Economic Partnership Agreement Negotiations Constraints to Integration Legal Shortcomings of the Treaties Lack-of Capacity Inappropriate Integration Strategy Structural factor Multiple Overlapping Organizations The Dominance of Politics Institutional Shortcomings Summary and Conclusion 176 Chapter 6 Improving the Effectiveness of the WTO: An Assessment of the Doha Development Round Proposals Introduction Modalities for, and State of, Negotiations on Rules The Relationship Between Regionalism and Multilateralism 'Developmental Aspects'of the Negotiations Proposals Aimed at Increased Transparency Time of Notification Purpose of Examination Forum for Notification and Examination Provision of Information Party to Provide Information Nature of Information to be Provided Normative Requirements: The Definition of 'Substantially all the Trade (SAT)' Summary 191 Chapter 7 The Regulation of Regional Trade Agreements: Enhancing the Effectiveness of the COMESA Legal Regime Introduction Norm Formulation and Treaty Adaptation The Necessity for Consensus Consent and Treaty Adaptation: Holding Parties Accountable 195
8 xiii 7.3. The Adoption of Appropriate Integration Strategies Capacity Building and Technical Assistance to Enhance Compliance The Alleviation of Member State Capacity Constraints The Alleviation of Institutional Capacity Constraints The Management of Compliance with COMESA Obligations Enhancing Transparency Dispute Settlement The Issue of Membership and RTA Configuration Summary 202 Chapter 8 Summary and Conclusion 203 Appendix I Article XXIV, GATT Appendix II The Enabling Clause 211 Appendix III Understanding on the Interpretation of Article XXIV of the General Agreement on Tariffs and Trade Appendix IV Dates and Summary Reports of the Meetings of the Negotiating Group on Rules 219 Appendix V Submissions on Regional Trade Agreements to the Negotiating Group on Rules 221 Bibliography 223 COMESA Materials 241 GATT/WTO Materials 243 Table of Treaties 247 Table of Cases 249 Index 251
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