In proposing an enhancement of SACU competition policy

Abstract

The South African Customs Union (SACU) is one of the many regional trade arrangements that litter the African continent. However unlike its counterparts it is unique in terms of the huge disparities between the economic states of its member states. SACU is currently struggling to redefine itself from its historical trimmings as a plumped up South African foreign policy tool to a regional body that caters for the needs of all its member nations. Key to this purported transformation would be how SACU copes with the increased presence of foreign multinational companies within the common market and coupled to this the persistent threat from established South African companies on infant industries within smaller SACU states. This dissertation highlights the potential role of competition policy as a market correcting mechanism within the regional context. It does so by shedding insights as to the workings of competition law, its natural impediments, modifications it would require and the objectives which it can be used to achieve. It considers the current state of competition law within SACU both on the domestic and regional front and compares them with examples found in other regional arrangements. It strives having regard to peculiarities within SACU to draw attention to shortfalls in its current approach to competition issues and makes a case for the modifying the current modus operandi. It proceeds from the viewpoint that without a fortification of SACU current approach to competition issues, the huge lacuna currently existing would deprive the regional body of any true gains to be made from trade liberalisation. It also proposes a regional competition policy as a means of controlling the ever present threat of established South African to infant industries in smaller SACU states and hopes this instrument will have the secondary effect of easing political tensions within the union. It makes an important call that special consideration be given towards smaller SACU states noting the cost and burden of implementing competition policy. It also considers the role competition law plays within a development framework dispelling prevailing conceptions within certain schools that it stunts growth of industries. It factors into its analysis, the ongoing negotiations between the European Union and SADC. It holds these processes as placing a further impetus on SACU nations to consider a movement from the current positive comity form which competition policy takes in the region by declaring it to be a weak form of cooperation and unsuited to effectively managing the new challenges that successfully negotiated EPA’s would place on competition authorities within SACU. Ultimately it proposes that SACU requires a strengthened competition policy to secure the gains from international trade but that more importantly it requires the right form of policy, a policy created in consideration of its history, current tensions, developmental needs, that foresees the potential for harm inherent in the EPA process and a policy that appreciates the burden a generic law might place on its member states. Its solution to the current crisis is a hybrid system incorporating elements of the EC supranational competition directorate and CARICOM special and differential treatment provisions.