Counting down to Sadc FTA
Trade barriers will soon be history following an agreement in which Southern African Development Community (Sadc) countries, including Malawi, plan to do away with them.
South Africa Trade and Industry Minister, Rob Davies, was quoted by the Trade and Law Centre (Tralac) last week saying Sadc Free Trade Area (FTA) is coming soon.
Tralac is a trade bloc whose members have agreed to eliminate tariffs, importation quotas and references on goods and services.
“Market integration is well-advanced in Sadc. The Sadc FTA should be fully implemented in 2012 with almost all tariff lines [products that have tariffs imposed on them] traded duty-free,†Davies said.
The customs union in the 15-member bloc was supposed to be established by 2010, but it faced some serious setbacks, including overlapping membership of most member States in other existing customs unions.
Sadc officially attained an FTA in 2008 which was an initial step towards creating a customs union by 2010, a common market by 2015, a monetary union by 2016 and a single currency by 2018, according to a Sadc FTA programme.
Davies said South Africa is working with Sadc nations to implement their obligations.
This meant a focus on co-operation, promoting regional production and infrastructure, addressing non-tariff barriers, and simplifying rules and standards.
Malawi’s Ministry of Industry and Trade spokesperson Wiskes Nkombezi said Malawi is committed to the implementation of tariff phasedowns under the Sadc trade protocol.
“Sadc market integration is indeed getting advanced and as Malawi, we want to be part of that integration so that we reap the benefits of this regional integration initiative.
“We envisage that our businesses will benefit from lower tariffs and in this case, zero customs tariffs, when products are exported into Sadc member countries,†he said.
Davies said negotiations had already begun to form a regional common market with the first stage to cover trade in goods.
These negotiations, according to him, would have a deadline of April 2014 with implementation in 2015.
Davies said the common market will involve 26 countries with a population of 600 million and a combined gross domestic product (GDP) of $1 trillion.
He observed that this would then provide the market scale that could launch a sizeable part of the continent onto a new developmental trajectory.
This agreement will also form the basis of the continent’s wide FTA that will in turn help to overcome challenges of small and fragmented economies.
“A larger, more integrated and growing market would enhance the interest of foreign investors in Africa and provide an important underpinning for continuing to enhance intra-African trade,†Davies said.
