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SADC FTA is implemented

29 August 2008

On August 17th 2008 a SADC free-trade area was formally established involving 12 of the 15 SADC members. It has created a trading bloc of 247 million people where tariffs have been eliminated on 85% of all intra-regional trade. The establishment of free trade in 100% of products is scheduled for 2012. The FTA is seen as a prelude to ambitious plans: a customs union by 2010, a common market by 2015, monetary union by 2016 and a single currency by 2018.

However concerns were expressed over ‘conflict with economic partnership’ deals that SADC states have with the EU. President Thabo Mbeki of South Africa highlighted that the EPAs ‘will have a profound – and even limiting – impact on the process of deepening integration at the regional level’. According to press reports economists in the region have also ‘warned of economic pain and even job losses in the short term’, as a result of the establishment of the SADC FTA. ‘Angola, the Democratic Republic of Congo and the Seychelles have decided not to join until they put their economic houses in order’. Sounding a cautionary note against the general euphoria, South Africa’s trade minister, Mandisi Mpahlwa, called for recognition that ‘regional integration is not only about the removal of tariff barriers’, but also about building ‘both our productive and trade capacity … expanding our agriculture and industrial base’.

Editorial comment

With only two years to go until the planned establishment of a SADC common market, which requires the institution of a common external tariff, the existence of the very different tariff-elimination commitments on trade with the EU across SADC FTA members poses a fundamental challenge to the region. A number of the contentious issues in the current SADC IEPA negotiation foreshadow issues which will arise in a wider SADC context. How these contentious issues are dealt with in the coming months will represent a critical test of negotiating skills, given the widely differing tariff elimination commitments individual members have entered into under the IEPAs in the wider SADC context.

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