Jump to content

an Eldis Resource

Liberalising trade in Southern Africa: implementation challenges for the 2008 SADC FTA and beyond

Economic realities in the Southern African Development Community

Authors: E. Mudzonga; E. Naumann; M. Pearson; Friedrich-Ebert-Stiftung
Publisher: Institute for Global Dialogue, South Africa, 2008

Full text of document

This report consists of proceedings of the Fifth Southern African Forum on Trade (SAFT) held in South Africa. The Forum evaluated regional achievements, examining particularly the gap between rhetorical political aspirations and the economic realities in Southern African Development Community (SADC).

The authors argue that multiple trade agreements signed by some SADC countries (particularly the Economic Partnership Agreements (EPAs) are a challenge to SADC customs administrations. Therefore it is important to continue building capacity in trade analysis, particularly for those involved in trade, in order to ensure smooth flow of business. In addition, the report underlines the following general recommendations in terms of enhancing SADC progress: 

  • there is the need for a paradigm shift in SADC, away from a simple trade-based and market-led perspective of regional integration
  • the Regional Indicative Strategic Development Plan (RISDP) should be reviewed and reformed, particularly the trade component with its emphasis on unrealistic integration milestones
  • the SADC region needs to implement a mechanism to monitor trade compliance, to ensure that member states implement agreed programmes
  • SADC should also look at developing compensatory mechanisms for countries that are likely to lose from trade liberalisation
  • the regional agenda should be refocused to support sustainable production capacity, and address supply-side constraints and the high costs of trade and services in the region
  • given the limited time remaining, an alternative approach to a custom union (CU) could be an enhanced FTA, which is more realistic and provides more scope for trade creation than a CU.

Furthermore, in the immediate future, the following actions are recommended: 

  • SADC member states should prioritise the consolidation of the agreement, strengthen the trade facilitation agenda, liberalise stringent rules of origin (RoO), and improve cooperation
  • drastic action is required to eliminate non-trade barriers, to converge external trade policies, to deal with border delays, to simplify customs procedures and RoO
  • member states should publish applicable tariffs well in advance in order to help the business community in its planning.

The authors state that the other option for ensuring sustained integration in case of SADC failure is to devise alternative means of raising state revenue.