RULES OF ORIGIN: ISSUES OF CONCERN, PROSPECTS AND HOW TO CAPITALIZE THEM*
Sylvester Madzvova

As defined by the Kyoto Convention (International Convention on the Simplification and Harmonization of Customs Procedures entered into force in 1974) rules of origin are "…. the specific provisions, developed from principles established by national legalization or international agreements applied by a country to determine the origin of goods". Therefore they are a set of rules that determine the country in which a product will be deemed to have originated. Rules of origin of Free Trade Agreements limit the use inputs from outside the preferential trade zone. A correct definition or interpretation of rules of origin may help to enhance demand for domestically produced goods, promote national technological development, and maximize labor income. Stringent rules of origin can increase demand for the domestic factors if the substitution effect prevails over the effects caused by the decrease of the scale of operation in the domestic plant, and the reallocation of output between domestic and foreign plants. Policy decisions regarding rules of origin that intertemporally foster domestic technological evolution should be made at the greatest level of desegregation that is feasible. The treatment of origin in trade and economic integration agreements is crucial for making the most of access to markets.

How are they used in SADC

The SADC rules of origin are the most complicated set of rules under the WTO. This is because they have specific requirements such as the use of regional inputs, specified processes or a combination of the two or more criteria and requirements, the platform of negotiation based on request and offer on a bilateral level.

Members often use rules of origin as non-tariff barriers to trade. This is contrary to the theoretical understanding that the rules of origin would promote regional development through import substitution achieved by forcing the producers to source inputs in the region.

Ideal set of rules but why the very little prospects

The above set up would have been an ideal, had there been no other underlying and prevailing interests that determine the degree of strictness of the SADC rules of origin. SADC countries have been accused of using rules of origin for other purpose that are not in the interest of promoting regional trade and industrial competitiveness. These purposes include, protection against antidumping, enforcement of consumer safety standards and protection of the environment. For example, South Africa proposed to tighten the rules so as to govern trade within SADC "…. tight rules of origin are meant to prevent SADC countries from repackaging imported goods and trading them in the region on behalf of 'fly-by-night' operations". It has to be clearly stated that this statement and several more related to this are often used by the South African trade negotiators, to protect the so-called sensitive industries from competition by potentially competitive industries in the region. These include motor vehicle, chemical and plastic industries. Evidently in the textile and clothing industry, South Africa is not willing to change its position on "double transformation" requirement for Zimbabwe and Mauritius. Yet an agreement has already been concluded between the MMTZ (least developed countries of the SADC region - Mozambique, Malawi, Tanzania and Zambia) and Southern African Customs Union (SACU) on the derogation of using "single transformation." It is worry because of the comparative advantage that the industries in the respective countries have.

The position by the SA officials is a direct response to the demands. Looked at from another angle, this position puts the government in a very precarious position in that these interests that it presents are often at odds with the needs and demands of the SA labor-force.

Some countries offer zero duty to products that are not produced in the region, such as computer equipment, while requesting strict rules on products that are produced in the region e.g. textile and clothing products (chapter 39; 3901 to 3114) plastics in primary form (3916 to 3926) semi-manufacturers and articles of plastics. Sometimes environmental concerns are linked to these issues. But these contravene the objectives of rules of origin. These are not the best way of addressing environmental issues. Use of subsidies in the collection of waste and direct controlling of waste material are examples of some very effective ways of dealing with such issues.

There are a lot of examples of incidences where rigid rules are used by members putting to threat the spirit of regional cooperation. If there were a balanced assessment of sensitivities and interests among members SADC would have been recognized as an effective and beneficial trade block. It becomes very clear that the building blocks for a SADC trade block are there but there are many stumbling blocks. The strong economies like South Africa should recognize their roles and play a pivotal part in the development of the region.

Prospects for COMESA

The COMESA countries' treatment of origin is traditional first-generation, with general criteria of origin and an administrative part that covers declaration, certification, control and sanction procedures. The current qualifying criterion is that a direct consignment from a member state to another has to be wholly produced by the member state, or have been produced partially from materials from outside the member state, or of undetermined origin by a process of production that affects a substantial transformation of those materials.

The Common Market for Southern and Eastern Africa (COMESA) envisages a free trade area that will culminate into a customs union as its goal. Its rules of origin that would operate as an equitable instrument capable of responding to the different conditions of production prevailing in the participating countries. It could be used also to remove sectoral distortions or biases, particularly if the economies involved are dependent upon each other. Moreover these rules, as a whole, are not very demanding and thus make it possible for third parties to enjoy the benefits of integration.
What are the challenges?
As it is progressively perfected to a customs union, COMESA should ensure that the payment of a common external tariff - CET - becomes more important than the rules of origin for gaining access to the enlarged market. Goods circulate freely in the international economic unit, as is the case in the European Union, where the rules of origin are applicable only to imports from third countries that enjoy preferences in its market. They are also used to identify the origin of goods subject to corrective measures or restrictions of some kind. This has been termed non-preferential origin. This refers to the replacement of rules of origin by the CET. In other words, the perfecting of integration goes beyond the treatment of origin and eliminates it as unnecessary. It is not that the common tariff confers origin, but that it balances the conditions for the free circulation of goods in an enlarged market, irrespective of their origin. The possible adverse effects of demanding rules of origin, such as unfairness, sectoral discrimination, restrictions, or limitations on competitiveness, shrink or disappear entirely with the described application of the CET. There are some countries for example Kenya, Malawi and Zambia that are concerned about the threat on their local industries in the short term. They wanted COMESA to allow members to impose quotas on sensitive products which they said were being dumped on their markets harming their industries. There is need for authorities to revisit the PTA era rules and enrich the presently approved set of rules. There is no problem in internationalizing trade provisions i.e. making them internationally acceptable, but there is a problem when such changes are made for the sake of it, hurriedly and without weighing their costs and benefits.
Does the region require strict or relaxed set of rules?

When strict rules of origin are imposed on industrialists they argue that they require flexibility in sourcing of raw materials and inputs from all possible sources - international, regional and local sources, for them to be internationally competitive. It is important in the SADC and COMESA regions to try and promote the sourcing of raw materials and other intermediate products from the region. This would encourage innovations and discourage overall reliance on the international market. Only those raw materials that are not available in the regional market can then be given the special consideration for their importation. Industrialists are not aware that many of the raw materials that they want to buy from the international market are products whose raw material origin is the African continent. There is need for such resources that would make the regional industries more competitive and increase their economies of scale.

Why is regionalism the answer?

Regional integration is often undermined by the spirit of selfishness in seeking the fruits of integration in the short run at the expense of long-term. It is true that in the long run it would appear as if local industrialists are losing out to other competitive industries in the region but in the long run when local is regional it will be very beneficial to all the participating countries.

Countries in the Southern and Eastern Africa should carefully consider the preferential trade arrangements that are offered to them by various international trading partners before they sign the agreements. Some of the arrangements are designed to undermine regional cooperation among the countries in question. The African Growth Opportunities Act (AGOA) was hurriedly accepted by most of the countries in the region without considering its consequences. The arrangement offers market opportunity for the textile and clothing industries but it could be short-lived and detrimental to the spirit of integration. AGOA has complex set of rules of origin and the eligibility criteria. The forward market rule applied in the arrangement will tear apart the ever linked textile and clothing industry in the region in 2004 when it ceases to be operational. The AGOA eligible countries including the least developed countries as defined by the US will not be able to export their clothing and textile products to the US market if they have been produced through the use of non-AGOA eligible countries' yarn or cotton. These countries include Zimbabwe which happen to be one of the big exporters of good quality cotton and yarn in the region.

The negotiations with the EU under the auspices of ACP/EU trade cooperation scheduled for the last quarter of the year 2002 require very careful consideration. These could preferably be done in a coordinated approach by all the African countries involved as a group, on specific interests e.g. sugar, banana, cotton exporters, net food importers etc. Otherwise these agreements would undermine the already promising regional trade arrangements and the hopeful thought of an African union. At the last ACP EU joint meeting that was held in Cape Town from the 18th to 21st of March 2002, the ACP countries came out with a strong message on the negotiations on the trade, rules of origin and SPS [ACP-EU 3382/02/fin.]. The resolutions drafted by the ACP group had a clear and strong massage to the EU the use of rules of origin: '… the main purpose of rules of origin is to promote industrial development and create jobs in the ACP countries and avoiding trade deflection.' Having noted this they went on to call for the EU to review various aspects of the rules of origin which the ACP allege to be very complex and not in conformity with the principal objectives of the Cotonou Agreement. Ì

[*The article is summary of a longer paper will be published soon under the SEATINI Working Paper Series]

NIGERIA: IMF SURE TO WEAR DOWN RESISTANCE, SAY ANALYSTS
IPS/Emad Mekay

Nigeria's decision to withdraw from programmes agreed with the International Monetary Fund (IMF) is a brave move that will not last against pressure from the economic powerhouse, analysts here say. Although last week's decision was initially hailed as a rare instance in which a developing nation's government has publicly confirmed the view of IMF critics, who say the Fund dictates economic policies to poorer nations, many observers say the body is still firmly in control.
"The IMF has a great degree of leverage over the Nigerian government and while the government may seriously believe it owes its first allegiance to its own people, rather than to the IFIs (international financial institutions), there are definite limits to how far it can pull away from their influence," said Salih Booker, director of Africa Action, a Washington-based advocacy group.

Other activists, including some who have long campaigned for the Fund to take a hands-off approach towards poor African nations, agree that Nigeria is likely to back down.

"I think they (the Nigerians) will more than likely fold, or even walk away from this position if pressure is applied - which is why it's all the more important to mark the small victories as they happen," said Soren Ambrose of the 50 Years Is Enough Network.

Nigeria owes $30 billion to Western creditors and IFIs and needs IMF certification for consideration of debt relief, analysts note. The Fund has rebuffed successive governments' attempts to secure major debt relief because Nigeria is an oil-exporting country. Creditors, including the IMF, acknowledge that the debt burden is a problem for the impoverished nation but argue that since debt servicing consumes only about 10% of its oil revenues, the government should look elsewhere for financing.

The Paris Club, an informal grouping of lending countries, relies on the IMF and the World Bank to certify the economic behaviour of indebted countries before it decides on debt relief. Analysts say that while claiming to be sympathetic to President Olusegun Obasanjo's pleas for relief, the IMF has taken a hard line, saying there is no hope of debt relief without a solid track record of establishing a free-market economy.

"The IMF's real agenda in African countries is to secure debt repayments, to open these economies to multinational corporations," Booker said.

Following the signing of a stand-by agreement with the Fund in August 2000, Nigeria received a debt-restructuring deal from the Paris Club and a $1 billion loan from the IMF. Both were contingent on economic restructuring. Since then, slumping world oil prices and a global economic slowdown have added to the strain on Nigeria's budget and prospects for its 126 million people. Poverty has been cited as among the main reasons for ongoing ethnic and communal tension. Sixty-six percent of the country now lives below the poverty line and the proportion is growing.

On Thursday [14 March, 2002], about 500 pensioners in Nigeria's southern Edo State staged a protest over unpaid benefits. Last week, hundreds of employees in the commercial capital, Lagos, demonstrated for several hours over not getting paid. Retired soldiers and policemen have also long complained about not receiving their pensions. The IMF says the economic troubles are related to the government failing to meet key targets. In a statement released after last week's decision, it said the level of government spending this year could well exceed state resources, thereby generating inflation and hurting the poor.

State officials retorted that fiscal austerity, the product of IMF-monitored programmes, is to blame for domestic unrest and poverty. The Fund has had a difficult relationship with other African nations, including Kenya and Zimbabwe. Nigeria's decision is seen as a culmination of those tense ties, according to analysts. There is "a constant tension that African governments feel, being forced to be more answerable to the demands of external creditors than to the needs of their own people. In countries where IMF policies have measurably lowered standards of living and left countries even more dependent on foreign creditors, there is certainly a difficult relationship between governments and the IMF," said Booker.

African governments are now spending more to service external debts than on healthcare for their populations, many of which are facing an HIV/AIDS pandemic. Ambrose said that other African countries should take heart from the Nigeria stance. "That opens the door a centimetre or two more to other governments standing up to the IMF."

The Fund reacted coolly to the controversy. An official told IPS that the IMF has decided to give Nigeria "a breather" as the government grapples with a citizenry angry at how it is handling the economy.

But Booker had a different view. "IMF officials are not making a big deal out of the decision because they know they have Nigeria under their thumb, whether the government likes it or not," he said. "With its massive burden of foreign debt, Nigeria cannot simply bow out of the game." Ì

[Reproduced by permission from SUNS No. 5081 of 18 March 2002.]

REGIONAL INTEGRATION
[Extracted from The Post, Lusaka, 12 April, 2002]

THE government's acknowledgement of the fact that regional co-operation and integration is not only critical but imperative to the development of Zambia is comforting. Foreign affairs deputy minister Catherine Namugala's assurance that the Zambian government would not falter but continue to pursue regional integration to the best of its ability in order to advance the realisation of the full potential in the region is even more comforting.

Our region, and indeed our entire continent, has no worthy, honourable, independent alternative to economic integration. If it doesn't achieve meaningful economic integration, it will have no place in the world of the future. With meaningful integration our region could also become an important economic unit. But our integration and unity are conceivable only with independence, within the framework of our own interests, and not integration based on the neo-colonial, neoliberal globalisation. And we don't think anybody is justified in calling himself or herself a politician - in any sense of the word - if he or she doesn't have a clear understanding of the need for regional integration, if he or she doesn't take this reality into account, and if he or she isn't aware that this reality must inevitably be faced.

The current world economic order doesn't seem to aid any of the efforts, policies and strategies we are banking on to reduce poverty in, and develop, our countries. Despite more than ten to fifteen years of economic reforms, liberalisation and privatisation to attract foreign investments we are still not benefiting significantly from global capital flows because much of this is flowing to only a handful of developing countries in South-East Asia and Latin America. This is despite the enormous global capital flows from the private sector. According to the United Nations Industrial Development Organisation (UNIDO), Africa was being by-passed by these flows despite being the region in most need of financial support particularly from the private sector.

It does not surprise us that as a result, unprecedented global prosperity has gone hand-in-hand with unprecedented poverty levels of over 80 per cent in countries like ours and growing general global inequality. It's also not a surprise to us that currently, wealth and income seem to be concentrated in a few hands and that global capitalism was apparently disconnected from the concerns of those whose lives it affects. Since when has global capitalism been concerned about equality, fairness and genuine justice or the lives of those it affected? From the days of mercantile capitalism and its slave trade, through classical colonialism with its crude extraction of raw materials from our countries, to today's neo-liberal colonialism the situation of our people is basically or fundamentally the same - marginalised, exploited, ignorant, diseased, hungry and generally poor.

Of course, we are not saying there are no improvements in the world - some relatively good things have happened in the world. But our situation is still relatively the same - backward, poor and desperate. We are permanently at the bottom of things in the world. Therefore to try to solve the problems of the future with tools of the past will not be sufficient for us. We cannot escape and hide away from today's highly globalised world but we have to find the most beneficial ways of engaging in, or with, it. We can't keep on relying on methods and formulas - colonial and neo-colonial ones - which have throughout the ages or times failed us and left us permanently weak and desperate. It may hurt to do things our way but we must be intelligent and invent new approaches to our problems in order to survive in these conditions without ever ceasing to be part of the so called globalised world. We have to struggle, work hard, research and stretch our intellectual abilities and sense of humanity to the utmost if we have to harbour any hope for survival in what appears to be a very difficult world for us. We should not accept the dogmas - the International Monetary Fund and World Bank neoliberal doctrines - which we are being manipulated to accept as our own programmes or development strategies and to which we are daily being told there are no sensible alternatives. These are unusual, difficult times. No country is isolated from the rest of the world today. No country lives or could live in a glass house. What one nation - no matter how small - does, can have repercussions in other nations.

We have a pressing need as Africans to unite. We think the correct strategy is to unite; take the initiative and demand the establishment of a more fairer international economic order. African political leaders who fail to see this will have to answer to history for it. We hope they will accept their responsibility, understand the problem, state it in correct terms, and struggle for the implementation of a new international economic order. We must choose concrete, realistic, and definitive solutions - not take the path of agony. We must choose a clear, intelligent, effective solution - not head toward Calvary. We think we have been struggling uphill for long enough. We have suffered not only the torment of Calvary but also that of Sisyphus, who had to keep pushing a boulder up a hill and every time he was about to reach the top, it would roll back down and he would have to start all over again. Our situation is worse than Calvary because Calvary was climbed quickly; we have been climbing our hill for a long time, and we keep on having to start all over. Calvary is preferable to Sisyphus' torment, and if we have had our Calvary, we should also have a resurrection.

What we want is to find a real solution for the problem, but what will happen is that imperialism and the industrialised capitalist countries will try to prevent the implementation of these solutions and divide the people; they will give a little aid here and there so that each will remain with his own Calvary - and not even a Calvary, but with the agonising torture of pushing the boulder up a never-ending hill. But one day the peoples are going to demand, "How much longer do we have to put up with these conditions?"

And then they will find solutions - they may shed blood in internal strife when - as almost all of us have foreseen - the people, tired of waiting, tired of being fooled once again take weapons to destroy to its very foundations a whole social and economic order designed to exploit them. However, we prefer an orderly solution; internal and external unity; and a real, definitive solution for Africa's problems of dependence and underdevelopment. Ì

ADMISSION TO EAST AFRICAN COMMUNITY DELAYED

The admission of Burundi and Rwanda to the East African Community (EAC - comprising Kenya, Tanzania and Uganda) has been delayed, The New Vision Ugandan government-owned newspaper quoted Jikaya Kikwete as announcing on behalf of the EAC Council of Ministers on Thursday [11 April, 2002].

"The council felt strongly that ultimately the Community may have to include those two countries. However, the council was of the view that this was not the appropriate moment for Rwanda and Burundi to be admitted," the council's report, which was later adopted by the presidents of the three East African countries, said. It said the community was still in a formative stage and it would not be prudent to admit new members now, the paper said. The ministers said the admission should be made after the protocol for the establishment of a customs union had been finalised, signed and made operational. "At that time, the application of Rwanda, Burundi and other foreign countries would be considered," the report said. Burundi and Rwanda applied for membership in 1999 and 1996 respectively.

The council also said that in the interest of the EAC, any admission of foreign countries would be based on strict conformity with the criteria provided for under the treaty. One of the conditions was that an applicant country had to be democratic. "In view of all these considerations and decisions, the council directed that the applications by Rwanda and Burundi will be kept under active review and the applicants kept duly informed," the council's report added. Ì

[Reproduced by permission from the UN Integrated Regional Information Networks, 10 April, 2002]

WAIT TO REAP REWARDS OF STRUCTURAL ADJUSTMENT

Ordinary Mozambicans have yet to see any real changes in their daily lives despite official World Bank figures suggesting that the country has performed well under the heavily indebted poor countries (HIPC) initiative.

An Economist Intelligence Unit report said on Wednesday [10 April, 2002] that Mozambique had satisfied the stringent conditions set by the World Bank and the International Monetary Fund (IMF), and was in line to receive a further US $4,2 billion reduction of its foreign debt - the remainder of promised debt relief. As a result, its debt service obligations fall to only 6 percent of exports and 10 percent of government revenue over the 2010 period, compared with 2023 percent in 1998, according to the report.

Analysts, however, caution that while US $4,2 billion may sound like a lot of money, debt repayment remains unsustainable for many of the poor countries targeted under the HIPC initiative. The initiative, sponsored by the World Bank and the IMF, aims to reduce the money some of the world's poorest countries owe to foreign creditors. "Even assuming that all the projections are correct, 10 percent of government revenues is still an enormous amount for a poor country like Mozambique to be paying out to foreign creditors.

"While this may be a "best case" HIPC scenario, it is still not good enough. Given the needs in Mozambique, the damage that Mozambique suffered from years of war, full cancellation of the debt to international financial institutions and other major foreign creditors is required," senior research fellow of Africa Action, William Minter, told IRIN on Wednesday [10 April, 2002]. Mozambique became the third country to obtain HIPC debt relief. However, the Jubilee 2000 Coalition - a global grouping of charities set up to lobby for third world relief - said that while "the deal looks good on paper, many Mozambicans still do not have access to proper clean water, sanitation or primary education".

"Yes, the figures may appear encouraging, but it is too soon to judge if the HIPC initiative will have any impact on ordinary people. Most Mozambicans remain poor. In fact the gap between the rich and the poor has widened. Although the government has increased spending on social welfare, it is negligible as to make any difference," Jubilee 2000 co-coordinator of Economic Justice and External Debt Sector, Gaime Chivite, told IRIN. Chivite said Mozambique might find itself in a new debt trap if it continued to borrow huge sums of money from private lenders to finance large developmental schemes. "Although there are no guarantees that investing in large-scale projects would increase exports, the government needs to be cautious or old debts may be subsumed by new ones," he said.
Donors told IRIN on Tuesday that they favoured providing development aid to Mozambique because it had a record of good governance and transparency. Ì

[Reproduced by permission from the UN Integrated Regional Information Networks, 10 April, 2002]

DIRECTOR'S COMMENT: RULES OF ORIGIN AS IF REGIONAL INTEGRATION MATTERED

Rules of origin (ROs) can be either a barrier or an instrument of regional integration. In the Southern African situation it seems nobody has a clear idea on how it should be used. There is remarkable lack of discussion on what could be the single most important issue impacting on the prospect, or otherwise, of regional integration in the SADC area. In default of a clear sense of direction on the part of policy-makers in the region, it looks that the ROs have become, in effect, a barrier to regional integration. It is time somebody takes notice. Otherwise policy drift in this vital area can, and will, add to the already fragmenting regional future in the SADC area.

Rules of origin, as defined in the 1974 Kyoto Convention, are simply a set of rules that determine the country in which a product (or service) is deemed to have originated. It is important to know the origination of a product because on this depends whether an imported product should enter a country with zero tariff, with high tariff, or with some other limitation, such as quotas. Also on this depends the collection of data about the sources of goods and services traded across borders. Beyond this simple notion, however, the ROs get into all kinds of very technical problems. They also create administrative mire for customs officials.

But the problem is not primarily technical. It is primarily political. In other words, the technical jungle and the resulting administrative morass is the creation not of customs officials, often maligned by traders, but of politicians and those who lobby them - namely, traders and industrialists. It is important to explain this further so that those who are really responsible for the present mess in ROs in the region take up their responsibility seriously - namely, politicians, parliamentarians and the business community.

In the European Union, for example, ROs are a diminishing aspect of regional integration. By and large goods and services enter the enlarged European market without tariffs or quotas. In other words, there is a Common External Tariff (CET), tariffs that Europe imposes on the rest of the world. But within the Union, the CET has made ROs more or less redundant, unnecessary. And this happy situation for Europe as a whole was achieved mainly through political decision by those at the highest level of state authority, and often against the wishes of national industrialists and traders, many of whom wanted to retain tariff walls, and therefore Rules of Origin, as a means of protecting their domestic markets. Here, as in many instances, sections of the private sector are a hindrance to regional integration. It is only the political will to unite on the part of the highest-level decision-makers, backed by a powerful bureaucracy at the level of the European Commission, which succeeded in overcoming the conservativeness of sections of the business community.

Within the SADC region there is remarkable absence of political will to integrate. Talk about "regional integration" is just that - talk. The reality is that the decision-makers at the highest level are so preoccupied with their domestic economic and political problems that they have neither the time nor the will to seriously examine the direction in which they should take the Southern African Development Community, or the processes by which a "development community" in the region could be created. One outcome of this is that the decision-makers are vulnerable to pressures coming from two powerful sources: one is internal to each country in the region, and the other external to the region.

The internal source of lobbying against integration consists of traders and industrialists who want to protect their national markets from competition from within the region. For example, in the case of textiles, exporters from Zimbabwe and Mauritius face stiff Rules of Origin criteria (called "double transformation" ROs) before they can enter the South African market. In the motor vehicle sector there are so many interests at stake that a special technical committee had to be set up to work out an agreement on it. And so on.

The extra-regional source of pressure comes from countries like the United States and the European Union. For example, there is a separate Free Trade Agreement (FTA) that the EU has signed with South Africa, and by extension the Southern Africa Customs Union (SACU). This has complicated the current EU negotiations with the rest the members of the SADC because South Africa is not part of those negotiations. The region cannot even agree on its geographic configuration in relation to the negotiations with the EU. What is "SADC" in the context of negotiations with the EU? Nobody knows. Similarly, the American Growth and Opportunities Act (AGOA) of the US government leaves it to the discretion of the US government to decide which country in Africa meets with the Act's rigorous "eligibility criteria". For example, Zimbabwe does not meet these criteria. The rest of the region is falling over each other to secure the benefits of AGOA. But they have to keep Zimbabwe out of any arrangements, for example, on the textiles industry. Also, these benefits are likely to be short term, in any case, and subject to annual review by the US government. Also, furthermore, the much-talked about New Partnership for Africa's Development (NEPAD) is similarly a powerful divisive force for Africa. Africa is being divided into the "the insiders" and "the outsiders" of NEPAD right in front of our eyes.

It is in the light of these divisive and centrifugal national and extra-regional forces that we must understand why there can be no agreement on the "technical" aspects of the Rules of Origin. As stated earlier, these are not technical issues; they are fundamentally political. There are too many forces that want to use the ROs as a means of protection rather than as a means of encouraging integration. What is needed is a political decision at the highest level in some of the major players in the SADC region to catch the bull by the horn, and move the region in the direction of integration. This means, among other things, moving towards treating ROs as a tool of integration rather than, as at present, as a means of protection of narrowly conceived, short term, national interests. The ROs must be displaced by CETs. The sooner this is achieved, the better it is for the region.
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