In its efforts to promote Regional Integration among Member States, the Southern African Development Community (SADC) has taken steps in support of Trade Liberalisation throughout the Southern African region.
Trade Liberalisation refers to the process of opening markets to international trade by reducing trade restrictions including tariffs and non-tariff barriers on the import and export of goods.
SADC supports increasingly free trade as part of its agenda to eradicate poverty in Southern Africa. As part of its long-term goals for Regional Integration, SADC established a Free Trade Area in 2008. Within this area, member states removed tariffs on trade with one another, but were free to levy their own external tariffs on imports from non-member nations. By January 2008, 12 Member States have signed free trade agreements, reducing tariffs on 85% of intra-regional imports. Angola, Democratic Republic of Congo and Seychelles are yet to join the Free Trade Area. The non-participating Member States are currently being assisted by the Secretariat to accede.
SADC continues to work for the effective implementation of the Free Trade Area and provides support to improve the capacity of Member States to engage in trade negotiations and implement trade agreements.
As part of its mission to increase trade among SADC Member States and external markets, SADC signed a Protocol on Trade in 1996. In setting out SADC’s policy on trade, the Protocol acknowledges the importance of a liberalised trading environment for economic development, diversification and industrialisation of the region. Therefore, to promote such liberalisation, the Protocol advocates that Member States harmonise their national trade policies to encourage free trade as a means of greater cooperation among Finance, Investment, and other sectors. Along with these policies, Member States should establish links between free trade and industrial policy coordination, as well as identify other sectors for liberalisation cooperation. However, the Protocol notes that such liberalisation must be undertaken on the basis of fair, mutually equitable, and beneficial trade arrangements that complement other SADC Protocols.
Towards a Customs Union and Common Market
Moving forward, SADC is building on the benefits of the Free Trade Area in its next goal of establishing a Customs Union, which adds a common external tariff against non-member countries to the free internal trade within the area. The eventual goal is a SADC Common Market, which has the benefits of free internal trade, a common tariff, and free movement of labour and capital among Member States.
Read more about Free Trade, Customs Union and a SADC Common Market under Integration Milestones.
Expanding the Free Trade Area
In 2008, the Tripartite Summit of the leaders of SADC, the Common Market for Eastern and Southern Africa (COMESA), and the East African Community (EAC) proposed a single Free Trade Area covering 26 countries, including almost half of Africa's population - greater than 500 million people. The 2011 Tripartite Summit Agreement indicates that all necessary preparatory work is expected to be complete by 2012.
Successful amalgamation of the existing Free Trade Areas of SADC, COMESA, and EAC would allow for tariff-free, quota-free, exemption-free trade across a much larger region. The proposed Tripartite Free Trade Area would foster greater intra-regional trade in the Tripartite region through a number of complementary programmes:
- Promotion of customs cooperation and trade facilitation;
- Harmonisation and coordination of industrial and health standards;
- Combating of unfair trade practices and import surges;
- Use of peaceful and agreed dispute settlement mechanisms;
- Use of simplified rules of origin that recognise inland transport costs as part of the value added in production;
- Relaxation of restrictions on movement of business persons, taking into account certain sensitivities;
- Liberalisation of certain priority service sectors on the basis of existing programmes of the three organisations;
- Promotion of value addition and transformation of the region into an information and knowledge-based economy through a balanced used of intellectual property rights and information and communications technology; and
- Development of robust infrastructure programmes designed to consolidate the regional market through interconnectivity of all modes of transport and the promotion of competitiveness through adequate supplies of vital resources.