SADC’s Free Trade Area slow to pick up
2010-01-12 Walta Information Centre, Addis Ababa
Resources > By Topic > REGIONAL TRADE ARRANGEMENTS > SADC
Members of the Southern African Development Community (SADC) are avoiding the implementation of some frameworks of the Free Trade Area (FTA), a grand intra-regional trade liberalisation programme which, despite its broad ambitions, is progressing at a snail’s pace.
Trade experts agree that the FTA, officially launched in 2009, is slowly and painfully edging forward.
The 14-member SADC plans to liberalise trade and make the flow of goods and services, which is being hindered by non-tariff barriers (NTBs), easier and more rewarding.
Trade liberalisation sees the scrapping of taxes that will cut revenue for some SADC members, whose smaller economies rely heavily on revenue collection.
However, governments have devised a means to re-coup these losses by imposing other NTBs which fly in the face of the broader ambitions of the FTA.
South Africa-based trade analyst Trudi Hartzenberg has warned of the slow implementation of the FTA, urging SADC members to uphold the same commitment to liberalising intra-regional trade that they show when signing protocols which give birth to the programmes.
Hartzenberg, Executive Director of the Trade Law Centre for Southern Africa (tralac), said that much still needs to be done in order to fully implement the FTA.
The FTA is the second phase of a comprehensive regional integration plan which aims to establish the region as a customs union by 2010, a common market by 2015, and achieve a monetary union by 2016.
Hartzenberg argued that greater trade facilitation within the region as well as the scrapping of non-tariff obstacles to trade should be prioritised or the agenda will remain a pipe dream.
“There is a lot of work that needs to be done to facilitate trade. Complete implementation has not been reached yet,” she told a Namibian-based weekly, The Southern Times.
Under the FTA, 85 percent of goods in intra-regional trade is expected to cross borders free of duties. While complete tariff liberalisation is expected to be achieved by 2012, Hartzenberg believes the structural problems are weighing heavily against the implementation of the FTA.
Intra-regional trade still accounts for slightly more than 22 percent of the region’s total trade, the low level being blamed largely on non-tariff barriers.
Other factors hampering the implementation of the FTA include lack of proper transport infrastructure and inadequate energy supply sources.
Research has indicated that it takes 91 days on average to comply with all trading requirements for intra-regional SADC trade, compared with between 53 and 60 days for trade between SADC and other markets outside the regional ambit.
Published in: Resources > By Topic > REGIONAL TRADE ARRANGEMENTS > SADC