by Munetsi Madakufamba This is the third in a Jour-part series on trade
The Southern African Development Community (SADC) Trade Protocol, which may be signed at this month’s summit meeting in Lesotho is set to spur efforts toward regional integration.
Zimbabwean Minister of Industry and Commerce, Nathan Shamuyarira, was quoted in the Herald, a Zimbabwean daily, as saying that the draft Trade Protocol “is very important in the life of SADC because it will begin the process of making SADC a common market”.
“The idea is to have a common market within 10 years and we hope that will be achieved.” he says, adding that, if signed, the draft protocol was going to mark a turning point in the actualization of the concept of regional integration.
A SADC sector document on Industry and Trade says the protocol aims to “facilitate, increase and promote intra SADC trade through the elimination of tariffs and non-tariff barriers; and to allow for competition and free and fair trade amongst SADC countries”.
There is consensus within the region that balance and level of intra-regional trade are a cause for concern. As a result an urgent amicable trade agreement should be concluded to put an end to unfair trade practices and hopefully boost regional development.
An informed source in the SADC body of experts on trade and law, set up to draft proposals of the Trade Protocol, says the main objectives are to:
• liberalise intra-regional trade in goods and services on the basis of fair, mutually equitable and beneficial trade arrangements;
• ensure efficient production within SADC reflecting the current and dynamic comparative advantages of its members;
• contribute towards the improvement of the climate for domestic, cross-border and foreign investment;
• enhance the economic development, diversification and industrialisation of the region;
• establish a Free Trade Area among SADC member states.
The protocol is also expected to adopt anti-dumping measures as well as common customs regulations to quell illicit cross-border trade.
To achieve these objectives, member countries are expected to eliminate tariff and non-tariff trade restrictions through phases with a view to establishing a Free Trade Area. That means South Africa’s controversial General Export Incentive Scheme (GElS) will be a thing of the past.
“When the common market is established, there will be no trade barriers or tariffs between member states,” says Shamuyarira. He also says companies will compete on the basis of efficiency within the broad framework of a SADC market.
SADC Executive Secretary, Kaire Mbuende, says the issue of time frame, within which trade impediments will be phased out, has so far been the major obstacle delaying agreement on the draft protocol. Countries hardest hit by the lack of a protocol, for instance Zambia, were pressing for a shorter period while on the other hand, countries like South Africa were advocating for a longer duration.
According to World Trade Organisation (WTO) regulations, such a time frame, as may be agreed on by members of a regional grouping, cannot be more than 10 years.
However, at ministerial level, differences of that nature have finally been ironed out following a major breakthrough early this month in Dar es Salaam, Tanzania, where SADC trade and industry ministers have adopted the draft Trade Protocol.
The ministers are confident that the protocol will bring about desirable results. “The southern African countries are making a determined effort to harmonise their economic policies and to improve the social condition of our people generally. So we hope these efforts will yield results as soon as the Trade Protocol is signed and ratified,” said Shamuyarira after the meeting.
President Mandela of South Africa also thinks highly about the Protocol and he says for his country, “… integrated development of the region is a priority of the highest order and the goal is to build SADC into a formidable force of development”.
He says a free trade agreement is one way of doing that and, once achieved, it would “enhance the member countries’ collective and individual standing in a world characterised by fierce competition for limited resources”.
But South Africa’s political will needs to be sanctioned by its business community and trade unions which, until recently, have shown much rigidity in according other countries preferential treatment.
Once signed by SADC heads of state and government, the protocol would have to be ratified by at least two-thirds of the member countries before becoming operational.
But ratification might be a while as member countries will need to take the document for further consultation with their respective parliaments or cabinets as well as various stakeholders before they can fully commit themselves. (SARDC)
