This is the second in a four-part series on future SADC-EU relations under the Lomé Convention.

A proposal has been put forward by the European Union (EU) to gradually introduce reciprocal trade between the 15-member group and sub-regions within the African-Caribbean-Pacific (ACP) group of developing nations when Lomé Convention provisions fall away in February 2000.

The EU has identified six sub-regions within the ACP group. Because of its ultimate objective of establishing a single economic space, the Southern African Development Community (SADC) was one of the sub-regions earmarked for the proposed agreements, which, according to the EU, should be compatible with World Trade Organisation (WTO) provisions.

SADC member states, along with other ACP countries, are currently enjoying preferential access to the European market under the Lomé Convention which has been in place since 1975 and will expire next year. Official negotiations for a new framework of agreement commenced in September last year.

For a region to qualify for a Regional Trade Partnership Agreement (REPA), it has to be a free trade area (FTA). The WTO requires that trade in the economic bloc be substantially liberalised. In other words, more than 90 percent of trade should be liberalised within ten years with a two-year grace period.

Another possibility for establishing a regional arrangement is to have a customs union with a common tariff regime. There can also be consideration under article 24 of the WTO of an interim arrangement leading to the establishment of a FTA or a customs union.

Through its various sectoral protocols, particularly the Trade Protocol signed in 1996, SADC's long-term objective is to establish a fully integrated FTA. However, out of SADC's eight sector protocols that have been signed to date, only three were ratified by a two-thirds majority required before implementation can begin.

Perhaps most important, the Trade Protocol, the cornerstone of the perceived SADC FTA, has been ratified by only five countries viz Botswana, Mauritius, Namibia, Tanzania and Zimbabwe.

Given the pace at which the ratification process has been going, a free trade area will not likely be in place in SADC before 2008, the deadline that the organisation sets for itself under the Trade Protocol.

On the other hand, the EU has set a deadline for completion of regional agreements between 2001 and 2005. It is not clear whether the required two-thirds majority will have ratified the SADC Trade Protocol by the end of this year.

Furthermore, there is no formal indication or intention by SADC for the establishment of a common customs union. However, the Southern African Customs Union (SACU) which is within SADC, is indeed a common custom union.

A study commissioned by the European Commission and undertaken by a team of southern African consultants concluded that the 14 SADC members have made uneven progress towards trade liberalisation, and a lot remains to be achieved before a FTA or a customs union, could be in place.

The report, entitled Study on the Impact of Introducing Reciprocity into the Trade Relations between the EU and the SADC Region, says while, in the long run, SADC would be a natural partner for the EU, institutional, political and economic constraints make it difficult, if not impossible, for SADC to conclude a regional agreement in the time-scale envisaged by the EU.

The study report recommends that: "First, extend the EU-South Africa free trade agreement to other SACU members (Botswana, Lesotho, Namibia, and Swaziland). Then, conclude some form of REPA with the three remaining developing countries (Mauritius, Seychelles, Zimbabwe), temporarily leaving out six least developed countries that are better off outside a regional partnership agreement. A SADC-wide REPA with the EU might be envisaged beyond 2010."

The argument behind this recommendation is that least developed countries in SADC (Angola, Lesotho, Malawi, Mozambique, Tanzania and Zambia) would continue to enjoy preferential access into the EU market even when Lomé expires, without having to reciprocate. If the SA-EU free trade agreement was to be extended to other SACU members, only developing countries would be the worst affected in the absence of a REPA.

However, entering into REPAs with separate groups of countries in SADC could defeat the region's integration agenda and further complicate current negotiations for a SADC free trade area under the Trade Protocol.