REQUEST FOR TENDERS ANALYSIS OF IMPLICATIONS OF THE PROPOSED ESTABLISHMENT OF A TRIPARTITE FTA BETWEEN COMESA, SADC AND THE EAC ON SACU

Transcription

1 REQUEST FOR TENDERS ANALYSIS OF IMPLICATIONS OF THE PROPOSED ESTABLISHMENT OF A TRIPARTITE FTA BETWEEN COMESA, SADC AND THE EAC ON SACU RFT Number: PDR/02/2010 Issued on: 13 December 2010 Closing Date: 21 January 2011 Delivery Address: Attention: Secretary, Tender Committee Southern African Customs Union (SACU) - Secretariat Private Bag Corner Robert Mugabe & Sam Nujoma Avenue Windhoek, Namibia Technical Enquiries: Mr. Rolf-Joachim Otto Deputy Director: Trade Negotiations Tel: (+264) Fax: (+264) rolf.otto@sacu.int

2 SACU Secretariat Page 2 Table of Contents 1. Introduction Objectives Specific Terms of Reference Policy Analysis Trade Analysis Approach Steering Committee Deliverables Timeframe Submission Dates Financial Arrangement Confidentiality Ownership of Tenders Modification of Terms Tender Format Evaluation of Tenders & Award Criteria... 9 Appendix A Format of Proposal... 11

3 SACU Secretariat Page 3 1. Introduction The three Regional Economic Communities (RECs) in Eastern and Southern Africa, namely the Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC) and Southern Africa Development Community (SADC) are implementing their individual regional integration programmes in trade and economic development covering the establishment of Free Trade Areas, Customs Unions, Monetary Union and Common Markets, as well as regional infrastructure development programmes in transport, information communications technology, energy and civil aviation as a first step towards the realisation of the continental integration. The overarching objective of the three regional organizations is to expand trade, alleviate poverty and improve the quality of life for the people of the Eastern and Southern African Region. However, expanding trade amongst the three RECs has been a challenge mainly due to overlapping memberships by the Member States of the different RECs. The EAC, which is already a Common Market, has four Member States in COMESA and one Member State in SADC. Five of the SADC Member States are members of the Southern African Customs Union (SACU). There are, therefore, ten countries in the region that are already members of customs unions. All the ten Member States are also involved in negotiations aimed at establishing alternative customs unions to the ones they currently belong to. It is in the context of the foregoing challenges that the three RECs saw the need to initiate a process of coordination and harmonization of their regional integration programmes. As a result, a Tripartite Task Force was established to forge collaboration that has focused on harmonisation of programmes in the area of trade, customs, civil aviation, free movement of people and infrastructure development. In recognition of the importance of promoting effective ownership of the tripartite process, the Tripartite Task Force in 2007 recommended that a Tripartite Summit of Heads of State and Government of COMESA, EAC and SADC be convened to give political endorsement and direction to the process of cooperation and harmonisation. When the Heads of State and Government of COMESA, EAC and SADC met in Kampala on 22 October 2008, they conveyed in their Communiqué a sense of urgency in calling for the establishment of a single Free Trade Area covering the 26 countries of COMESA, EAC and SADC. The political leaders directed the Secretariats of the three organisations to prepare all the legal documents necessary for establishing the single Free Trade Area (FTA) and to clearly identify the steps required for its establishment. In light of these developments, the SACU Council of Ministers has decided that research should be undertaken to analyze the implications on SACU of the proposed establishment of a Tripartite Free Trade Agreement (FTA) between COMESA, SADC and the EAC. Council agreed that this research should be managed by the SACU Secretariat. The following terms of reference have been developed to guide the consultants in executing the study. 2. Objectives The purpose of the study is to assess the implications on SACU of a possible Tripartite FTA between COMESA, SADC and the EAC. The study will analyze the trade, economic, policy and regional integration implications of such an agreement for SACU, as well as

4 SACU Secretariat Page 4 provide recommendations on an approach for SACU in this process. It is important that this study analyses the potential impacts of the proposed FTA, with a specific focus on SACU. In light of this, the study should amongst other things: Provide a background on the proposal to negotiate a tripartite FTA; Analyse SACU Member States readiness to negotiate such an FTA; Analyse the current trade flows between SACU Member States and COMESA, SADC, EAC Member States, as this will enable SACU to make an assessment of the benefits and costs to its Member States that may result from the proposed FTA; Make an assessment of the competitiveness of SACU Member States industries, to determine the products which they may promote to access these countries (this will entail looking into the economic trends of each SACU Member State); Assess the recent international trade policy developments and the possible implications for the FTA; Identify and describe existing barriers to trade in the tripartite for SACU Member States; Analyse the impact of the bilateral trade agreements SACU Member States have with Member States of COMESA, SADC or EAC on the trade flows; Analyse trade taking place between SACU and these three regional trading blocs vis-à-vis SACU s trade with other trading partners or regional trading blocs; Analyse the tariff structure as applied by each regional trading bloc in its trade amongst Member States, as well as with countries outside the bloc; Analyse the impact of the overlapping membership, within these four RECs on the intended purpose of the FTA; Analyse the scope of the FTA and recommend what would be suited for SACU; and Review other relevant studies, policy documents and literature on the specific topic. Since the FTA would be quite comprehensive, the study should also aim to analyze how SACU could benefit additionally from this FTA. 3. Specific Terms of Reference The following core tasks have to be undertaken by the consultants doing the study. The structure of this study, will be divided into two sections, section one will address the Policy Analysis issues while section two will address the Trade Analysis issues Policy Analysis Background information This section will provide information on the factors that lead to the decision to enter into negotiations on a Tripartite FTA between COMESA, SADC and the EAC. It will also provide an update on progress made so far, as well as the process going forward. It should also highlight the negotiating process followed and the institutional setup established for this purpose with a view to determining how SACU can or should participate and influence possible negotiations.

5 SACU Secretariat Page Economic profile of COMESA, SADC and EAC This section should present a brief overview of the economic environment as it currently exists in COMESA, SADC and the EAC. The focus should fall on the main macroeconomic indicators, presenting a time series where possible, preferably a minimum of last five years. In addition, an effort should be made to identify future trends Treaties establishing COMESA, SADC and the EAC The treaties establishing the three blocs have to be analyzed. This should include an in-depth analysis of the regulatory frameworks governing trade within each bloc, amongst the three blocks, as well as trade with third countries, specifically SACU and/or SACU Member States. What is important is to identify the institutional set-up of each bloc and how a move towards the establishment of the FTA will affect regional integration and trade in SACU Trade Agreements with third parties This section should list all the bilateral and multilateral trade agreements COMESA, SADC and the EAC as a whole or as Member States are parties to. For each agreement, an indication of the type of agreement, product coverage and timeframe for implementation is needed. They should be analyzed from the point of view of how they could be impacted by the formation of a Tripartite FTA and could also influence SACU s position as a preferred trade partner. The study should also include an overview of commitments from the three blocs or their member states as individuals under the WTO Overview of policy related structure of the COMESA, SADC and the EAC This section should focus on the following aspects, but could also include other aspects identified as relevant by the consultants: i. Trade Policy matters An overview of existing trade policies in the three blocs should be presented (as far as is possible), as well as the way trade policy is determined and applied and how it will affect SACU. ii. SACU approach towards the negotiations The consultant should develop scenarios on how SACU should or could participate in the negotiations, explicitly highlighting, short, medium and long term strategies. It should also take into account the experiences that SACU has gained with the implementation of similar agreements within the region.

6 SACU Secretariat Page Trade Analysis General equilibrium analysis The consultants should utilize general equilibrium analysis to identify the economic and trade impact of a Tripartite Free Trade Agreement between COMESA, SADC and the EAC on SACU, as well as the economies of SACU countries. It should also analyze the following impacts: Employment; Revenue implications for SACU, specifically the BLNS Trade diversion or trade creation. In this regard consultants should analyze the trade policy effects on: trade creation and diversion; welfare; tariff revenues; and Net trade effect and Change in consumer surplus. Where trade data limitation might prevent the full utilisation of a general equilibrium analysis, consultants should consider utilising partial equilibrium analysis or any other econometric models that might achieve the same result Overview of trade related structure of the COMESA, SADC and the EAC This section should focus on the following aspects, but could also include other aspects identified as relevant by the consultants: i. Tariff Structure The tariff structure as applied by each regional trading bloc in its trade amongst Member States, as well as with countries outside the bloc should be analyzed. The analysis should also identify exceptions to the tariff structures applied to intra-trade, as well as to extra-trade. The existing tariff structures that currently apply to trade amongst the three blocs should be identified. In addition, the consultant should also determine the number of SACU tariff lines that will have to be phased down as a result of the tripartite FTA and the anticipated revenue loss, but also potential economic gains. ii. Institutions This section should look at the way tariff policy is determined and tariffs are set in COMESA, SADC and the EAC. It should also list how trade defence instruments (anti-dumping, safeguards, countervailing measures, etc) are administered and implemented.

7 SACU Secretariat Page Trade statistics This section should present a clear picture of the trading environment of the three blocks. It should present trade flows within COMESA, SADC and the EAC, amongst COMESA, SADC and the EAC, as well as with third parties. All of the trade flows must include trade flows per country and per region. The statistics used should include data for the last 10 years, taking into account possible data constraints. Finally, the analysis should address, but not be limited to the following aspects: Major export products; Major import products; Major trading partners; Products traded with SACU (taking into account that SACU Member States are also SADC Member States); Trade balance with the world; Trade balance with SACU; Trade trends; and Trade map analysis Other The consultants should make recommendations on any other aspects that should or could be included in this study. 4. Approach The consultants will meet with relevant officials in the SACU Secretariat to discuss the issues identified in the Terms of Reference. These discussions will also address the need for visits to the SADC, EAC and COMESA Secretariats and a sample of COMESA, SADC, EAC and SACU Member States, as well as the background and other information required for the completion of the study. 5. Steering Committee The work of the consultant will be overseen by a Reference Group consisting of one official from each SACU Member State, plus two officials from the SACU Secretariat. The SACU Secretariat will act as the liaison and contact centre for the study. The Reference Group should be involved at each stage of the study and these TOR therefore provide for the Reference Group meeting on occasion to consider reports as submitted and also to assist the Consultants where the need arises. 6. Deliverables An inception report should be submitted at the initial stage of the study to enable SACU Member States to appreciate how the consultants will undertake the study, the methodology that will be used, the methods of analysis to be used and how information will be obtained from various stakeholders. The inception report should be submitted within 2 (two) weeks from commencement of the study. It will be distributed to the

8 SACU Secretariat Page 8 Reference Group for comment, which should be submitted within 2 (two) weeks after receipt of the inception report. The Consultant will produce a draft report within 12 (twelve) weeks of starting the Study covering all aspects of the Terms of Reference. This report will be circulated to the Reference Group upon receipt. The Reference Group will be given 2 (two) weeks for comments after receipt of the draft report. Taking into account the comments on the draft report, the consultant will make a presentation of the revised report to the Reference Group. On the basis of the outcome of this presentation, the Consultant will produce a final report within 2 (two) weeks of the presentation. An electronic copy of the all the reports shall be supplied to the Secretariat for appropriate distribution. 7. Timeframe It is anticipated that the study will take 18 (eighteen) weeks to be completed and submitted to the Secretariat. 8. Submission Dates The Tender should be delivered or posted to the address specified above in two (2) hard copies. One of these should be a technical proposal whilst the other should be a financial proposal. The technical proposal should be inserted in a separate envelope, clearly marked Technical Proposal and the financial proposal should be placed in its own separate envelope clearly marked Financial Proposal. All envelopes should be sealed, showing no identification of proponent and clearly marked as indicated below: Analysis of implications of the proposed establishment of a Tripartite FTA between COMESA, SADC and the EAC on SACU RFT: PDR/02/2010 The deadline for submission of the tender is 21 January 2011, 13h00 Namibian time. 9. Financial Arrangement Bidders are solely responsible for their own costs in preparing the Tender. Payments for all services covered by this RFT shall be made on receipt of appropriate invoices, the satisfactory completion of work, and adhere to the Secretariat s Financial Policies and Procedures. 10. Confidentiality Tenders submitted will not be revealed to any other bidders and will be treated as contractually binding. The Secretariat reserves the right to seek clarification or verification of any information in the Tenders.

9 SACU Secretariat Page 9 All information pertaining to the SACU Secretariat obtained by the bidder as a result of participation in this RFT is confidential and must not be disclosed without written authorisation from the Executive Secretary of the Secretariat. The successful bidder will be expected to sign a Non-Disclosure Agreement before a contract is awarded. 11. Ownership of Tenders All Tenders, including supporting documents, submitted to the Secretariat become the property of the Secretariat. 12. Modification of Terms The SACU Secretariat reserves the right to add, modify or omit certain portions of the Tenders scope at any time at its sole discretion. This includes the right to cancel this RFT at any time prior to entering into a contract with the successful bidder. 13. Tender Format Bidders are requested to address the issues and requirements in Appendix A to ensure that each Tender receives full consideration. 14. Evaluation of Tenders & Award Criteria a. Eligibility Only Tenders received as specified in section 9 above will be considered. Tenders will not be evaluated if the bidder s current or past corporate or other interests may, in the Secretariat s opinion, give rise to a conflict of interest in connection with this RFT. b. Qualification Criteria Tenders not so excluded will be initially evaluated by reference to the following qualification criteria: i. Completeness of tender documentation as specified in Appendix A of this document, and ii. Stated ability of the bidder to meet all the minimum requirements specified in section 15 of this document. c. Award Criteria The contract will be awarded from the qualifying Tenders on the basis of the most economically advantageous proposal applying the following award criteria, listed in order of priority: i. Proof of technical knowledge in the area of the required focus of the study;

10 SACU Secretariat Page 10 ii. Proof of previous relevant experience; iii. Proof of qualifications and skills composition of the Team who will undertake the exercise; iv. Availability of Consultant to undertake the exercise; and v. Cost of undertaking exercise (including any specified costs related to travel, accommodation; printing & binding).

11 SACU Secretariat Page 11 APPENDIX A FORMAT OF PROPOSAL Bidders should address all the issues and requirements in the sequence in which they appear in this Appendix. 1. General Information a) One page letter of introduction identifying the bidder and signed by the person(s) authorised to bind the organisation to statements made in the proposal. b) Title Page listing the RFT Number, Organisation Name, Postal Address, Physical Address, Telephone No., Fax No., Mobile No., Address, Website and Full Names of two Contact Persons. c) Profile of the Consultancy Firm or consortium. d) A record of previous similar consulting assignments undertaken by the firm or consortium. e) Proof of qualifications and experience of key staff that will carry out the assignment, including the team leader. f) Full Contact Details of any third-parties involved in the proposal. g) Description of role or element of proposal to be fulfilled by any third-party. h) Confirmation of acceptance by the bidder and any third parties of the conditions of proposal. i) Certified copies of a Certificate of Registration or Incorporation with relevant national authorities. j) Certified copy of a current Tax Clearance Certificate from relevant national authorities. 2. Reference Sites Bidders must provide a minimum of two customers (names, addresses and telephone numbers) who may be contacted for references in connection with the proposed assignment. 3. Schedule of Costs All costs must be quoted in South African Rand (ZAR). The schedule must take the following format: a) The total cost of the proposal (best and final offer). b) A full breakdown of the price. c) An itemised breakdown of the cost of any options being proposed beyond the specified Terms of Reference. d) The applicable rate of VAT in respect of each product and service being proposed. e) Details of any other costs, taxes or duties which may be incurred. f) Confirmation that the proposal remains valid for 60 days after the closing date for receipt of proposals. 4. Additional Information Bidders may provide any other information which may be relevant to this proposal.