ABSTRACT
This chapter provides a thorough description of the main objectives, principles and provisions of the 1969 customs union agreement. The agreement from 1969 contains a new formula for the distribution of revenue, makes provisions for regular consultations between the members and specifies a number of measures for fostering industrial development in the smaller countries. In a memorandum of understanding attached to the agreement, the governments of the Botswana, Lesotho and Swaziland countries undertake to establish customs and excise administrations that are capable of administering the terms of the agreement. The creation of a Customs Union Commission comprising representatives of all contracting parties provides a forum for discussions and consultations in matters related to the customs union agreement. In the traditional theory of customs unions, the gains from regional economic integration derive largely from advantages of scale and increased specialization, according to comparative advantage, which can be exploited in a larger common market.
