SADC On Track For “Free Trade” By 2008

By Chengetai Madziwa – SANF 04 no 03
The SADC region is on track towards meeting the major objective of its trade protocol which is to “achieve a Free Trade Area by 2008, when substantially all trade would be duty free.”

Implementation of the SADC Trade Protocol and other instruments affecting the economic development of the region has shown remarkable progress in 2003, the SADC Executive Secretary, Dr Prega Ramsamy said in his year-end briefing.

The Trade Protocol is the most important legal instrument in the region’s quest for economic integration, and is in its third year of implementation since ratification in January 2000.

Eleven countries have so far been implementing the protocol on trade and SADC is now preparing for the midterm review of the protocol, which will take place in 2004. The findings of this review will indicate the levels of trade that have taken place under the protocol preferences.

SADC’s new Directorate for Trade, Industry, Finance and Investment (TIFI) has channelled most of its efforts during the past year towards harmonizing policies aimed at strengthening the region in the global economy.

Substantial progress has been made towards customs cooperation with respect to harmonization of documentation and procedures, and in preparation for a Memorandum of Understanding (MOU) on Cooperation and Mutual Assistance among Customs Administrations.

As SADC prepares to strengthen its intra-regional trade, it remains aware of global developments which affect the region’s market share in the world trading arena, Ramsamy said. The region has thus continued to reaffirm its commitment to multilateral trading systems on the basis of transparency and predictability.

In the last World Trade Organisation (WTO) meeting in Cancun, Mexico, the SADC region and other developing countries presented their view that the key challenge confronting the multilateral trading system is to ensure that development issues are addressed.

Developing countries stressed the importance of putting back on track the Doha Development Agenda negotiations.

Concerning the negotiations for Economic Partnership Agreements (EPAs) with the European Union under the Cotonou agreement, SADC Ministers of Trade and Industry met in Blantyre late last year to consider the SADC guidelines for negotiating EPAs.

The SADC Ministers emphasised the need to set up a structure to support and coordinate the negotiation process, and the need to mobilize resources and build capacity to discuss EPAs.

Angola, Botswana, Lesotho, Mozambique, Swaziland and Tanzania have so far confirmed their participation in negotiating a SADC EPA.

The region has also made significant progress in harmonizing macroeconomic policy intended to strengthen the region’s economy. SADC member states have signed a MOU on Macroeconomic Convergence, which recognizes the importance of macroeconomic stability in the region. They have also signed the MOU on Cooperation in Taxation and Related Matters, which provides a framework for progress towards tax cooperation within SADC.

The TIFI directorate has been working towards the implementation of these MOUs and is also developing a draft Protocol on Finance and Investment, which Ramsamy says should be ready by June this year.

ADC has also made significant progress in implementing its Protocol on Mining as well as improving the quality of manufactured products.

“We are paying particular attention to investment promotion, entrepreneurship development and ensuring that the manufactured products meet internationally recognised standards and quality in order to compete favourably in the global economy.”

The Executive Secretary said the region seeks to effectively harmonise policy related to trade and economic development, and has identified the following priority areas for 2004:

  • Consolidate implementation of the Trade Protocol, finalise the midterm review and initiate preparatory work for the negotiations for a Customs Union;
  • Consolidate implementation of the Protocol on Mining, finalise the SADC Industrial policy and strategies document, and design an implementation programme that would enhance industrial and mining competitiveness globally;
  • Co-ordinate the development of regional positions and inputs for WTO and Cotonou negotiations;
  • Consolidate implementation of the signed MOUs under finance and investment, and finalise the development of the Protocol on Finance and Investment. (SARDC)