When do you expect the required number of Member States to have ratified the Trade Protocol for it to enter into force? So far, how many countries have ratified the Protocol?
For a SADC protocol to enter into force, two-thirds of the signatory Member countries of that instrument must have ratified it. In the case of the Trade Protocol, 11 countries of the then 12 Members of SADC have signed. Angola has not signed the Protocol. Thus, 7 Member States have to ratify the Trade Protocol for it to enter into force.

Therefore, the required number of ratifications for the Trade Protocol will be achieved in August 1999. Tariff reductions in the context of the implementation of the Trade Protocol will start in January 2000.

According to the SADC Trade Protocol, at what point in the manufacturing process is a product considered to be originating from a given country?
For a product to be considered to have undergone substantial transformation, we have agreed that 35% local content should suffice at which point the product would be considered to be originating from the exporting country. However, there are certain types of products for which it is difficult to achieve that level of 35% local content, and therefore provision has been made for a shift in tariffs for such goods.

For those particular products where you can’t add 35% local content, you can use other criteria and agree on a lower level of local content provided a number of other processes have been undertaken so that it’s not just a question of labelling, but actual value addition to a particular product.

Given that industries of most SADC countries are at an infant stage, is 35% local content not asking for too much?
If the objective is to industrialise, then 35% is very low. If we go for a lower level of local input, the region will never see development of industries. But, as indicated, there could be flexibility in certain instances and that flexibility would be dictated by the nature of the product.

It was very important for us to actually make a commitment and say that we should do this in less than what is provided under the WTO, and looking at the actual situation today there is substantial free trade area in southern Africa through SACU arrangements and through a whole set of other bilateral arrangements. So we took eight years just to play it safe. But in my view, we don’t need eight years. There could be a specific product that may need a longer period, and from our analysis the sensitive products are textiles, some types of agricultural products and automobiles. We think all these could be done within that framework. There is no product that we feel needs more than eight years.

Some people predict that this arrangement will result in job losses in countries with weaker economies. Don’t you share similar fears?
No. You shouldn’t look at trade and trade liberalisation in isolation. The creation of a single market is aimed at, among other things, making the region attractive for investment. So, some of the losses in revenue in terms of uncompetitive industries closing down may be compensated for by inflow of investments from outside the region. It’s a dynamic situation. We just don’t look at trade in isolation. We have to relate it to investment flow both from within the region as well as from outside the region. Today some countries can’t be considered for investment because they are small markets in themselves, but they could be very attractive locations for accessing the larger markets in the region. It is a much more dynamic situation in which loss of revenues in trade are replaced by investment flows.

So, there will be a process of restructuring, and that process is such that you lose jobs in one sector and create them in another sector. At the end of the day what you want to see is the creation of more jobs than the ones that will be lost, and we strongly believe that in fact that is what is going to happen.

Some of the projections that are made in terms of the importance of a free trade area for creation of jobs have come up with an estimation of up to 1.5 million new jobs being created as a result of implementation of the SADC Free Trade Protocol in the initial phases. But once we move to deeper levels of integration we should expect creation of even more jobs. But let’s face it, there are a lot of industries that are now competitive, not only in regional terms but also in global terms because regionalism is a very important instrument for preparing us for global competition.

If we don’t integrate now and put our industries on a competitive basis, they will be wiped out – not by South African industries or Zimbabwean industries – but industries from South East Asia, China, Europe and America because with the implementation of the provisions of the WTO, tariffs are bound to come down and all our States are members of the WTO which they will have to honour.

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