WTO members review Seychelles’ accession to the SADC Trade Protocol
World Trade Organisation members reviewed Seychelles’ accession to the Southern African Development Community (SADC) trade protocol at the 18 September 2018 meeting of the Committee on Regional Trade Agreements. Members welcomed progress being made in the economic integration of the African region.
For Seychelles’ accession to the SADC trade protocol in 2015, the parties involved remarked that it will enhance trade in the region and lead to economic growth. Seychelles eliminated tariffs on 91.7% of its tariff lines for imports from other SADC members. By 2026, 97.5% of Seychelles’ tariffs will be liberalized. The other SADC parties will liberalize between 93.8% and 100% of their tariffs for imports from the Seychelles.
A number of changes on rules of origin, sanitary and phytosanitary standards and provisions on technical barriers to trade have also been made to the SADC protocol which was considered in 2007 by the Committee.
Seychelles said its accession creates opportunities for further trade with Southern African neighbours and serves as a stepping stone for boosting intra-African trade. It further noted that the trade protocol is fully compatible with WTO rules and provides predictability for commerce, thus establishing better trading conditions.
Namibia on behalf of SADC said the Seychelles, though a small economy, was a strategic trading partner. The accession of Seychelles will lead to further regional integration, Namibia said. Other members who took the floor at the meeting commended the parties for the review process and remarked positively on the growing integration among African economies.
The chair of the Committee, Ambassador Julian Braithwaite (United Kingdom), told members that 80 RTAs currently in force have not been notified to the WTO as of 11 September, acknowledging however that the Turkey-Singapore free trade agreement had been notified after the list was circulated.
The chair further noted that factual presentations for 29 RTAs involving only WTO members and those for a further 36 RTAs involving non-members remain pending, counting goods and services agreements separately. The WTO Secretariat reiterated its call to members to submit data and comments in a timely fashion. The chair said he was continuing consultations with relevant members to resolve the matter. It was however also noted that members needed to take a closer look at the reasons for the lack of notifications and ways in which to improve notifications of RTAs.
Accession of Seychelles to the SADC Trade Protocol (Goods)
Seychelles became a member of Southern African Development Community (SADC) in September 1997, but withdrew in 2004. In 2008 the Seychelles was readmitted to SADC and became party to the SADC Trade Protocol in May 2015. Of the fifteen countries that are members of SADC, two (Angola and the Democratic Republic of Congo) have not yet implemented the SADC Protocol on Trade and thus are not members of the SADC free trade area. Madagascar is a signatory to the SADC Trade Protocol but its accession to SADC has not been notified to the WTO.
The Seychelles is a party to three RTAs notified to the WTO including its accession to the Southern African Development Community (SADC). The Seychelles is smaller than its SADC partners in terms of GDP (2016) but has a much higher trade to GDP ratio for the period 2014-2016. South Africa is by far the largest of the SADC countries in terms of its GDP (2016) which is more than double the combined total of other SADC countries. In 2016 the Seychelles ran a global merchandise trade deficit, as did all of its SADC partners except Botswana and Eswatini.
In terms of exports (2016), South Africa was the Seychelles’ third largest export destination (after EU28 and the United Arab Emirates). Mauritius and Madagascar ranked 5th and 10th respectively. In terms of imports (2016), South Africa was the Seychelles’ fourth largest source of imports (after the Cayman Islands, EU 28 and the United Arab Emirates). Mauritius and Madagascar ranked 8th and 25th respectively.
In terms of developments in recent years in global and intra-trade between the Seychelles and its SADC partners, the Seychelles has run a constant and expanding trade deficit on a global basis and with its SADC partners over the period surveyed (2000-2016). South Africa is the Seychelles’ largest source of imports from its SADC partners followed by Mauritius. With the exception of 2011, the Seychelles’ exports to SADC countries are dwarfed by its imports. The bulk of the Seychelles’ exports to SADC countries are destined for South Africa and Mauritius.
Bilateral trade patterns between SADC countries and the Seychelles over the period 2000-2016 show that South Africa, Namibia and Eswatini have run a consistent trade surplus with the Seychelles over the period surveyed, while with Mauritius the trade balance is mixed. Gaps in trade data between the Seychelles and other SADC partners make it difficult to identify trends.
Review of the commodity structure of trade of the Seychelles’ imports from its SADC partners, as well as of the Seychelles’ imports and exports to the world (2010-2014) on the basis of HS section product categories, reveals that more than half of the Seychelles’ imports from most of its SADC partners is composed of one or two commodities (e.g. prepared foods from Malawi and Zimbabwe, vehicles from Madagascar, chemicals from Eswatini and animal products from Lesotho), whereas imports from Mauritius and South Africa which account for the bulk of imports from SADC partners are more diverse.
The Seychelles’ imports of prepared foodstuffs, machinery, wood pulp and chemicals accounted on average for 48.9% of its imports from Mauritius in 2012-2014, while imports of machinery, foodstuffs, vehicles and chemicals accounted on average for 53.6% of its imports from South Africa over the same period.
Review of the commodity structure of trade of the SADC partners’ imports from the Seychelles, as well as their imports and exports to the world (2012-2014) on the basis of HS section product categories reveals that Mauritius is the largest importer of products from the Seychelles with imports averaging US$34 million in 2012-2014 and composed almost entirely of animal products. Likewise, Madagascar’s imports from the Seychelles, averaging US$7 million over the same period are composed almost entirely of animal products.
For the other SADC partners’ imports from the Seychelles the average trade volume over the period 2012-2014 averaged less than US$1 million. Textiles, machinery and vehicles are among the most common products traded.