A Common Market is an agreement between two or more countries removing all trade barriers between themselves, establishing common tariff and non-tariff barriers for importers, and also allowing for the free movement of labour, capital and services between themselves.
The SADC Common Market is one of the primary goals of SADC in the area of Trade, Economic Liberalisation and Development and it is projected that the region will reach this milestone by 2015. Prior to reaching this milestone, SADC must establish a Customs Union, which was projected for completion by 2010.
Each of the Trade, Economic Liberalisation and Development milestones is intended to bring the SADC region closer to a Common Market, which in turn is hoped will enhance industrial development and increase competitiveness across all sectors.
Despite current delays in reaching the preceding milestones, SADC is working hard to overcome the challenges presented by the Customs Union, with the long-term goal of establishing a Common Market.
SADC is currently faced with two major challenges as the levels of integration move from the Free Trade Area, through Customs Union and on towards a Common Market:
- Addressing the conflicts that may arise from attempting to service obligations from membership in multiple regional and international bodies, such as customs unions and common markets.
- Development of policies and strategies that are targeted at supporting vulnerable groups, rural and urban poor, small businesses, informal operators and women.
Rules of Origin
The Rules of Origin are the criteria used to determine the national source of a product. Governments practices different methods for determining Rules of Origin. Some apply the criterion of change of tariff classification, others the criterion of percentage value added, and others the criterion of manufacturing or processing operation.
In a globalising world it is becoming increasingly important that harmonisation is achieved on these practices by SADC Member States, in order to introduce consistency.