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601. SACU Revenue Sharing Formula: Towards a Development Agreement

Author:
Masedi Motswapong and Roman Grynberg
Publication Date:
07-2012
Content Type:
Working Paper
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
The South African Customs Union (SACU) Revenue Sharing Formula (RSF) has been revised substantively twice; once in 1969 and in 1994-2002 since the creation of the customs union in 1910 and each time the changes in the treaty were a reflection of the historic changes occurring in Southern Africa. The apartheid regime created a RSF that served to increase the share of revenue of Botswana, Lesotho and Swaziland (BLS), leaving the South African share as a residual of revenues. As this made South Africa a residual claimant it was unsustainable and required reform in the post-apartheid era. The 2002 formula increased the share to the Botswana, Lesotho, Namibia and Swaziland (BNLS) and removed South Africa as a residual claimant but did not change the fundamental economic relationship between members. While the International Monetary Fund (IMF) supports orthodox fiscal adjustment imbalances this paper argues that the order of magnitude makes those adjustment implausible and a new political arrangement is needed between South Africa and Lesotho and Swaziland to create a viable way forward for Southern African Development Community (SADC). It is argued that even in the case of Botswana and Namibia a new developmental formula, based on investing SACU revenues for regional and national development projects is needed to relieve those countries that have suffered the effects of polarization.
Topic:
Development, Regional Cooperation, Regional Integration, Economic Development, Integration, and Economic Cooperation
Political Geography:
Africa, South Africa, and Botswana

602. What do the COMESA Customs Union and COMESA-EAC-SADC Tripartite Free Trade Area mean for Zambia’s import trade and trade tax revenue?

Author:
Caesar Cheelo, Njeleka Malata, and Joseph Tembo
Publication Date:
02-2012
Content Type:
Working Paper
Institution:
Zambia Institute for Policy Analysis and Research (ZIPAR)
Abstract:
Zambia has participated actively in the Common Market for Eastern and Southern Africa (COMESA) and Southern African Development Community (SADC) regional integration programmes. Within SADC it is now reportedly a full participant in the SADC Free Trade Area (FTA), granting duty-free and quota-free access to goods originating from the SADC region. It is also a founding participant in the COMESA FTA and is now looking ahead to participate in the establishment of the COMESA Customs Union. The country is also committed to participate in the recently announced Tripartite FTA, which will establish a free trade area and then eventually a customs union, consolidating the regional economic communities of COMESA, SADC, and the East African Community (EAC). Quite often the actual or potential short-term or transitional impacts of the tariff reforms associated with regional integration are not well known. This is the case with respect to Zambia’s commitments to further integration under the forthcoming COMESA Customs Union and Tripartite FTA. ZIPAR therefore undertook a study to assess the potential effects for Zambia of the forthcoming trade reforms implied in both the COMESA Customs Union and the Tripartite FTA. The study made two starting-point observations: on the one hand, the Tripartite FTA is expected to consolidate the internal markets of the three regional economic communities and facilitate duty- and quota-free trade within the common market, subject to rules of origin. This means the Tripartite FTA will define Zambia’s internal trade policy position with other member states. On the other hand, the COMESA Customs Union, with its Common Tariff Nomenclature, Common External Tariff structure and common Customs Management Regulations, will define Zambia and other COMESA Member States’ common external trade policy position. Given Zambia’s ratification of these trade arrangements, it is important for policy-makers to understand the significance of the trade policy reforms implied in both the COMESA Customs Union and the Tripartite FTA. This paper therefore seeks to determine the implications for Zambia of the trade reforms that the country will undertake. It applies the following methods of ex-ante analysis: (1) Import trade and tariff profiling using simple descriptive statistical analysis of trade for the period 2000-2010 and of tariff structures in 2010; (2) Analysis of required trade policy reforms; and (3) Analysis of revenue implications and economic effects using the World Bank’s Tariff Reform Impact Simulation Tool (TRIST). Trade and customs data as well as other data were obtained from authentic national and international sources including the Zambia Revenue Authority, COMESA Secretariat, Central Statistical Office, Ministry of Finance, World Trade Organisation and World Bank, among others. The paper’s reference period is 2010.
Topic:
Regional Cooperation, Economy, Tax Systems, Free Trade, and Imports
Political Geography:
Africa and Zambia

603. Predictions on Power Structure and Policy Changes of the Kim Jong-un Regime

Author:
Chang-Hyun Jung
Publication Date:
06-2012
Content Type:
Working Paper
Institution:
East Asia Institute (EAI)
Abstract:
The East Asia Institute takes no institutional position on policy issues and has no affiliation with the Korean government. All statements of fact and expressions of opinion contained in its publications are the sole responsibility of the author or authors. The new stage of North Korea’s leadership succession began with the rise to power of the third generation leader Kim Jong-un. On 15 April 2012, the newly-appointed First Secretary of the Workers’ Party of Korea Kim Jong-un made his first public speech during a military parade to commemorate Kim Il-sung’s centenary. It was the official announcement of the opening of the Kim Jong-un regime toward the world. A series of political events from the Meeting of Party Representatives to the Kim Il-sung centenary celebrations clearly show that the third generation of leadership is emerging as a new core power group backed by the second generation. This move means more than just a generational shift in North Korea’s power structure. It indicative of possible changes in policy lines on its internal and external affairs. Kim Jong-un conducted political reshuffles before and after the Meeting of Party Representatives in April 2012, as part of actions to implement a moderate shift in generation and to firmly secure his control over the military. Since smoothly establishing the hereditary succession process, Kim Jong-un not only moved toward assuming political leadership but also swiftly acquired a firm grip on the power elites in the party, government, and military by reorganizing and uniting power elites. It would seem Kim Jong-un’s rule is stable, at least in terms of power structure. The power structure of the Kim Jong-un regime has turned out to be a single leadership where the country is ruled by one strong man rather than a collective leadership. Instead of having “specific figures” as a regent or a guardian through a decentralization of power, North Korea seems to prefer to support the new supreme leader through “collective consultation.” The policies designed and implemented during the last three years of Kim Jong-il’s rule were in fact intended as a policy transformation process to prepare preparation for Kim Jong-un’s rule. These policy directions have been maintained since Kim Jong-un came to power. His first public speech on 15 April can be translated as an announcement on limited changes for a “knowledge-based economy.” This established a new period while inheriting the values of Jaju or independence from the Kim Il-sung era and Songun or military first politics from the Kim Jong-il era. In particular, Kim Jong-un emphasized the significance of “peace,” by stating in the speech, “for our party and the Republic’s government that consider powerful state construction and people’s livelihood improvement to be their general goal, peace cannot be more valuable.” Under Kim Jong-un’s rule with the keyword of “knowledge-based economy,” North Korea is expected to place priorities on improving people’s livelihood and will take on more flexible policy decisions from 2013 when the next administrations in South Korea and the United States will be established. As such it is an inevitable option for North Korea to rebuild its economy and attract foreign investment. Against this backdrop, the administrations in South Korea and the United States should not pressure North Korea but rather wait and respond calmly until the policy lines of the Kim Jong-un regime on economic change and openness are clearer. Above all the first priority should be placed on stable management of North Korean issues, given that many of the participants of the Six-Party Talks will enter into power transition process at the end of 2012. First, the U.S. administration needs to resume contacts with North Korea in order to implement the Leap Day Deal in which Pyongyang would place a moratorium on missile and nuclear tests, as well as freeze its nuclear programs. If the diplomatic pressure from the international community successfully leads North Korea to give up its nuclear activities and ease tensions, it would create the right environment for the resumption of the Six-Party Talks. Second, it will be worthwhile establishing contact through high-level channels to develop a clearer picture of what are Kim Jong-un’s intention regarding North Korea’s nuclear activities. In providing new opportunities for the North Korean leadership, a policy shift by Pyongyang may take place. Third, it is important that the Lee Myung-bak administration reopens channels for inter-Korean talks even at low-level so as to not leave too much of a burden for the next administration. Offering to hold inter-Korean family reunions for the second half of the year 2012 would be a good start. Fourth, the next administration in South Korea should be committed to establishing a more sustainable North Korean policy that can maintain consistency regardless of any power shift by comprehensively reflecting public opinion during a time when conflict among South Koreans on approaches toward North Korea is becoming worse. Whoever comes into power in South Korea after the presidential election, the main agenda of inter-Korean relations will be on the next inter-Korean Summit. Kim Jong-un has already expressed his willingness to talk, stating “(we) will go hand in hand with anyone who truly desires the country’s reunification and peaceful prosperity.” If the third inter-Korean Summit can be held in 2013, it would be a significant breakthrough in building confidence between two Koreas and solving the North Korean nuclear crisis as well as making progress toward peaceful coexistence.
Topic:
Diplomacy, Regional Cooperation, Authoritarianism, and Leadership
Political Geography:
Asia, South Korea, and North Korea

604. China, Japan, South Korea Trilateral Cooperation: Implications for Northeast Asian Politics and Order

Author:
Andrew Yeo
Publication Date:
11-2012
Content Type:
Working Paper
Institution:
East Asia Institute (EAI)
Abstract:
How significant are trilateral relations in Northeast Asia? Does increasing trilateral cooperation between China, Japan, and South Korea undermine existing U.S. bilateral relationships? Can Japan and South Korea use trilateral relations to hedge between the United States and China? Or do these middle powers help create a buffer between great power rivals by establishing trilateral relations with both the United States and China? This essay explores trilateral cooperation in East Asia paying particular attention to developments in trilateral relations between China, Japan, and South Korea. Although trilateral cooperation among Northeast Asian states will likely continue to grow, proponents of U.S. bilateral alliances need not be alarmed about such trends. Taking a positive-sum view of trilateral relations, policymakers should encourage trilateral developments, whether they include the United States or China, to the extent that such institutional arrangements facilitate cooperation and trust-building at the bilateral and multilateral level. This essay is organized into four sections. In the first section I provide a brief overview of trilateral cooperation between China, Japan, and South Korea. I also present data available from the Trilateral Cooperation Secretariat (TCS) website indicating trends and patterns in trilateral relations since 1999. Section two discusses the relative political significance of trilateral cooperation within Northeast Asia and its limitations. The focus here is on the micro-foundations of trilateral cooperation. Section three places the TCS and the Trilateral Summit in a broader strategic context. I address trilateral cooperation in the context of geopolitical rivalry between the United States and China and East Asia’s developing institutional architecture. Section four concludes by arguing that trilateral initiatives are not zero-sum. Although some policymakers fear that traditional U.S. allies may drift closer to China as trilateral cooperation expands, the TCS and Trilateral Summit are but one set of institutional mechanisms situated in conjunction with or on top of bilateral alliances.
Topic:
Diplomacy, International Cooperation, and Regional Cooperation
Political Geography:
Japan, China, Asia, and South Korea

605. Death of an Institution. The end for Western European Union, a future for European defence?

Author:
Graham Messervy-Whiting and Alyson J. K. Bailes
Publication Date:
05-2011
Content Type:
Working Paper
Institution:
EGMONT - The Royal Institute for International Relations
Abstract:
On 31 March 2010 the ten Member States of Western European Union (WEU) announced that the last organs, staffs and activities of that institution would be laid to rest by 30 June 2011. Having resiled from the Modified Brussels Treaty (MBT) of 1954 which created WEU as a successor to the Western Union of 1948, these nations are now working to dispose of the staff, premises and archives at WEU's Brussels offices and its Parliamentary Assembly in Paris. Little public interest has been shown in these moves, perhaps because WEU's operational and political work had already been taken over by the European Union (EU), in the frame of its new European Security and Defence Policy (ESDP), at the end of 1999.
Topic:
Security, Defense Policy, Regional Cooperation, and Treaties and Agreements
Political Geography:
Europe

606. The Single Market in need of a strategic relaunch

Author:
Tinne Heremans
Publication Date:
01-2011
Content Type:
Working Paper
Institution:
EGMONT - The Royal Institute for International Relations
Abstract:
On the 27th of October 2010 the Commission finally published its long-awaited Communication “Towards a Single Market Act” with the ambitious objective of relaunching the Single Market. It is beyond doubt that the market integration project is indeed in need of a serious boost. On the one hand, the “acquis” should be buttressed more firmly against protectionist reactions, citizen distrust and integration lethargy more generally. On the other hand, the untapped growth potential – in domains suffering from persistent bottlenecks as well as in new sectors – needs to be better exploited. It will however be argued in this contribution that, in its present form, the Commission's “Draft Single Market Act” (Draft SMA) does not contain all the strategic building blocks needed to address the key challenge of reengaging the different actors in the market integration project and genuinely revamp the Single Market. Therefore, on the basis of an examination of the gaps and defaults in the Draft SMA's approach, and against the background of the preparatory documents presented by Mario Monti and the European Parliament, some suggestions for possible strategic improvements to be included in the final SMA will be made.
Topic:
Economics, Markets, Regional Cooperation, and Monetary Policy
Political Geography:
Europe

607. Andean-U.S. Dialogue Forum: Toward a Common Agenda for the Andean Countries and the United States

Publication Date:
02-2011
Content Type:
Working Paper
Institution:
The Carter Center
Abstract:
An opening product of the Andean-U.S. Dialogue Forum, this report is intended to spur conversations on more effective cooperation by identifying convergences and divergences in priorities among the countries and the citizens of Venezuela, Colombia, Ecuador, Peru, and Bolivia and the United States. It seeks to open the door to a better understanding of the internal dynamics in each country and to reduce stereotypes that impede cooperation to resolve mutual challenges. This report highlights the transnational issues of energy, climate change, trade, and illegal drugs, recognizing that beneficial progress will demand a collective response from all.
Topic:
Climate Change, International Trade and Finance, Regional Cooperation, and War on Drugs
Political Geography:
United States, Colombia, Latin America, Venezuela, Peru, Ecuador, and Bolivia

608. Decision-Making in Security and Defence Policy. Towards Supranational Intergovernmentalism?

Author:
Jolyon Howorth
Publication Date:
03-2011
Content Type:
Working Paper
Institution:
The Kolleg-Forschergruppe (KFG)
Abstract:
For scholars and practitioners of European politics alike, the distinction between supranationalism and intergovernmentalism has always been fundamental. This distinction has underpinned the various schools of European integration theory, just as it has remained crucial for European governments keen to demonstrate that the member states remain in charge of key policy areas. Nowhere is this considered to be more central than in the area of foreign and security policy, which has consciously been set within the rigid intergovernmental framework of Pillar Two of the Maastricht Treaty and, under the Lisbon Treaty, remains subject to the unanimity rule. And yet, scholarship on the major decision-making agencies of the foreign and security policy of the EU suggests that the distinction is not only blurred but increasingly meaningless. This paper demonstrates that, in virtually every case, decisions are shaped and even taken by small groups of relatively well-socialized officials in the key committees acting in a mode which is as close to supranational as it is to intergovernmental. The political control of foreign and security policy, which is considered sacrosanct by member state governments, is only rarely exercised by politicians at the level of the European Council or Council of Ministers.
Topic:
Security, Foreign Policy, Defense Policy, Regional Cooperation, and Treaties and Agreements
Political Geography:
Europe

609. Crafting Energy Security Cooperation in East Asia

Author:
Jochen Prantl
Publication Date:
04-2011
Content Type:
Policy Brief
Institution:
Centre for Non-Traditional Security Studies (NTS)
Abstract:
Existing work on energy security tends to over-emphasise the prospect of competition and conflict over resources while under-exploring the promise of cooperation. This policy brief provides a framework for understanding energy security cooperation and highlights some building blocks for crafting such cooperation in East Asia. At present, instead of an integrated regime, issues related to energy security are addressed through a patchwork of loosely coupled rules, regulations and institutions, overlapping and sometimes competing, which amount to a regime complex. This policy brief stipulates that an energy security regime complex may have advantages over an integrated regime, most notably in terms of adaptability, flexibility and voice, features which are particularly pertinent in an environment of high vulnerability and uncertainty.
Topic:
Security, Energy Policy, and Regional Cooperation
Political Geography:
Israel and East Asia

610. After the Strategic Concept: Towards a NATO Version 3.0

Author:
Trine Flockhart
Publication Date:
04-2011
Content Type:
Working Paper
Institution:
Danish Institute for International Studies
Abstract:
NATO now has a new Strategic Concept entitled Active Engagement – Modern Defence, agreed at the Lisbon Summit on 19 November 2010. The new Strategic Concept is heaped with high expectations, that it will produce what US Ambassador to NATO Ivo Daalder has called a 'NATO Version 3.0', which will ensure that the Alliance is fit for facing the challenges of the 21st century.
Topic:
Security, Defense Policy, NATO, International Organization, and Regional Cooperation
Political Geography:
United States