CHALLENGES FACING SACU IN PREPARATION FOR THE NEXT ROUND OF NEGOTIATIONS

BACKGROUND 1.1 The new SACU Agreement Article 31 of the new SACU Agreement provides for the establishment of a Common Negotiating Mechanism. It further requires a Member State to obtain the consent of other Member States before negotiating and entering into new trade agreements. 1.2 SACU Trade Workshop in Namibia held in August 2002 recognised the need for: Developing common negotiating positions Identifying common areas of interest A SACU identity

IMMEDIATE CHALLENGES Establishing a Common Negotiating Mechanism Agreeing on rules of engagement Building capacity around key negotiating areas such as Tariffs, Services and Safeguards Identifying common areas of interest Generating and sharing reliable trade data Ensuring that Trade Ministers (as opposed to Finance Ministers) take the lead in the negotiations Co-ordinating with foreign trade representatives of the SACU States Recognition of the various levels of development especially in relation to the protection of infant industries Trust and confidence amongst the Member States Scheduling of negotiations to suit SACU Prioritizing our negotiations with third parties.

LONG-TERM CHALLENGES Although we have new entity, we also have challenges to face in order to develop the new SACU into a fully integrated regional bloc. The key challenges relate to: Policy co-ordination across the Customs Area Economic growth Creating strong institutions Linking the region to the rest of the World Co-ordinating amongst ourselves as e interact with the rest of the SADC, Africa and the rest of the World. Elaborating on how the new SACU institution will function Creating an enabling environment at all levels for the effective implementation of the new Agreement.

PROGRESS TO DATE WITH VARIOUS NEGOTIATIONS 4.1 SACU/US FTA Common Negotiating Mechanism established to immediately start work on the proposed FTA Work Programme for the FTA agreed upon TOR endorsed by the Ministers Respective Cabinets to be approached for approval 4.2 SACU/MERCOSUR FTA Framework Agreement is in place Exchange of information taking place Preparations to meet with MERCOSUR delegation on-going.

OTHER NEGOTIATIONS 5.1 SACU and Europe (Cotonou Agreement, TDCA and EFT/EFTA 5.2 SACU and WTO 5.3 SACU and Southern Africa (SADC/COMESA) and the rest of Africa (AU/NEPAD) 5.4 The rest of the World

PROGRESS TOWARDS IMPLEMENTING THE NEW AGREEMENT Selection of Windhoek as the host capital for the SACU Secretariat Preparatory work for the appointment of Executive Secretary Development of annexes on Dispute Settlement and Unfair Trade Practices ITAC Bill to establish a national body on the RSA side to work with SACU institutions.