SADC launches free trade area
Bathandwa Mbola
18 August 2008
Eleven of the 14 member states of the Southern African Development Community (SADC) have officially launched a free trade area (FTA).
Launched during the 28th SADC Summit in Johannesburg at the weekend, the agreement ushers in a new era of economic integration and industrialisation for the sub-region.
With the goal of eliminating tariffs and trade barriers among member countries, the FTA agreement is part of the SADC's ongoing efforts to deepen long-term regional integration in order to accelerate economic growth and reduce poverty for the millions of people living on the continent.
From August 2008, producers and consumers will pay no import tariffs on an estimated 85% of all trade on goods between 11 countries: Botswana, Lesotho, Madagascar, Mauritius, Mozambique, Namibia, South Africa, Swaziland, United Republic of Tanzania, Zambia and Zimbabwe.
Angola, the Democratic Republic of Congo and Malawi will join the FTA later.
It is expected to create a regional market worth about $360-billion, benefiting a total population of 170-million people.
The SADC FTA programme also includes establishing a Customs Union by 2010, a Common Market by 2015, a monetary Union by 2016 and a single currency by 2018.
Speaking at the launch, President Thabo Mbeki, who is also the new SADC chairperson, said member states needed to assess how best they could advance the integration effort and the region's trade performance, noting that the most serious constraints to growing the region were underdeveloped structures and supply capacity.
"We must intensify our collective efforts to build and diversify the region's productive capacity to expand the range of products that can be traded" while striving to increase the value addition of those exports, Mbeki said.
"In this context, our sectoral work at harmonising regional industrial, agricultural and competition policy should be prioritised as we move forward."
Cross-border infrastructure development would be essential role to advancing integration, Mbeki added.
The implementation of the FTA area for SADC started in 1996 with the signing of a Protocol on Trade, which entered into force in January 2000 and was implemented from September 2000, following arduous negotiations on tariff reduction schedules and rules of origin.
Since then, liberalisation of tariffs has taken place at different rates, with developed countries reducing tariffs at a faster rate. South Africa, Botswana and Namibia removed most tariffs in 2000, while countries such as Mauritius gradually reduced their tariffs between 2000 and 2008.
For least developed countries such as Mozambique and Zambia, tariff reductions were introduced during 2007-2008.
Source: BuaNews
