HomeBusiness DigestObstacles seen in SA's free trade area

Obstacles seen in SA’s free trade area

SOUTHERN Africa’s goal of a free trade area by 2008 is threatened by conflict in the region and a reluctance by some countries to open up their markets, analysts and South African officials said yesterday.

FONT face=”Verdana, Arial, Helvetica, sans-serif”>The 13-member Southern Africa Development Community Sadc wants a free trade area by 2008 but slow growth of industry and manufacturing and political problems have kept countries from taking steps to reach that goal, analysts said.

“There has been a lack of commitment from some member states,” said Angus September, director for Sadc at South Africa’s Department of Trade and Industry (DTI).

Some countries were not keen to open up as quickly as Sadc protocols required, fearing their economies could be undermined by cheaper goods produced in the region or overshadowed by South Africa’s giant economy, the analysts said.

Other countries such as Angola —emerging from a three-decade civil war that ended in 2002 — and Democratic Republic of Congo, which is nursing a fragile peace process, are unlikely to be ready in time.

September of the DTI said South Africa had sought to jumpstart the process by take in everything from Sadc at a zero tariff rate apart from clothes and textiles.

But Pretoria found Sadc countries protective, and believed they saw complete opening as a risk to their economies, he said.

In Zimbabwe, industry officials conceded that there was resistance to removing some of the protective barriers shielding the economy, which has experienced severe problems in recent years amid an ongoing political crisis.

“(South Africa) wanted us to give preferential treatment to other Sadc countries, which is something we were not prepared to do,” said Confederation of Zimbabwe Industries chief economist and negotiator, Farai Zizhou.

Meanwhile, some countries including Zimbabwe and Zambia had made free trade difficult by raising tariffs when they should have been cutting them.

“Some countries are constantly revising their tariff offers, sometimes upwards which is not a good idea for business,” said Hilton Zunckel, senior researcher at think-tank Trade Law Centre for Southern Africa (Tralac) in the wine town of Stellenbosch.

“The case of Angola and the DRC is that institutionally, they are not ready for the implementation as yet,” Zunckel said.

He said while other countries were looking to 2008, South Africa wanted zero tarrif ratings in 2005 in many instances.

The Sadc protocol does not cover sugar — because of lucrative contracts with the European Union and the United States for producers from some developing countries — and automobiles.

South Africa has banned the import of second-hand vehicles to bolster its own industry.

Intra-Sadc trade totals around 10 percent of the region’s total trade. Sadc comprises Angola, Botswana, the DRC, Lesotho, Malawi, Mauritius, Mozambique, Namibia, South Africa, Swaziland, United Republic of Tanzania, Zambia and Zimbabwe. Madagascar has applied for membership and will be admitted later this year. — Reuter.

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