by Joseph Ngwawi – SANF 07 No 19
Southern Africa has embarked on an audit of tariffs in member states as the region moves to assess the level of preparedness towards creating a free trade zone in 2008.
The audit of gazetted tariff reduction schedules started in February and will be a barometer with which to gauge the level of commitment by member states towards opening up their industries to regional trade.
The target is to have at least 85 percent of all intra-regional trade in the Southern African Development Community (SADC) at zero tariffs by 2008 when the SADC Free Trade Area is expected to come into force.
Under the SADC Trade Protocol, tariff reduction in southern Africa is a three-stage process, with the first category being goods that were to be liberalised by 2001, the second by 2008 and the third by 2012.
One of the challenges faced by SADC countries in tariff reduction has been the contentious issue of rules of origin.
The rules of origin were one of the issues that delayed the implementation of the SADC Trade Protocol from 1996, when it was signed by most countries, to 2000.
The 14-member regional bloc eventually came up with a 97-chapter handbook of tariff reduction schedules in 2000, which contains laid down rules of origin designed to stop countries from importing to re-export.
Under the trade protocol, a product is required to undergo substantial transformation with a specified amount of local content before it can be exported. This rule is important for various reasons, including protecting domestic industries or preventing countries that have easier access to overseas markets from engaging in trans-shipment of foreign goods.
SADC Council of Ministers chairperson, Timothy Thahane, said audit of tariff reduction schedules will end in April and that the regional bloc is also in the process of updating the 2004 inventory report on non-tariff barriers.
“Ministers noted that plans are advanced to undertake studies on a Customs Union models and compatibility of national trade policies. In addition, a Customs Union Roadmap is being finalised,” said Thahane at the end of the two-day SADC Council of Ministers in the Lesotho capital, Maseru.
The SADC Council of Ministers also approved a US$45.3 million budget and 2007/08 business plans for SADC institutions. The budget is about 12 percent higher than the 2006/07 budget.
Thahane announced that the detailed physical design of the new SADC headquarters in Gaborone, Botswana, has been completed and that financial arrangements will soon be concluded with suppliers.
“The headquarters, which will house 250 personnel, is expected to cost SADC US$25 million which will be amortised over 15 years through Member States contributions,” said Thahane, who is also Lesotho’s Minister of Finance and Economic Planning.
The European Commission will provide €135 million to SADC under a joint regional indicative programme to support regional economic integration, said Thahane.
The Council of Ministers chairperson noted that European Union support for hard infrastructure will be through national indicative programmes as well as the EU-Africa Partnership for Infrastructure which is presently under development.
Thahane also announced that SADC will host a regional conference on poverty and development early next year and that human and financial resources have been committed towards the preparations.
