Linda Ensor
12 June 2008
Cape Town — SA did not agree with some Southern African Development Community (SADC) members that work should begin immediately to achieve a regional customs union by 2010, trade and industry deputy director-general Xavier Carim said yesterday.
Updating Parliament's trade and industry committee on the progress made in various global and regional trade negotiations, Carim said SA as well as other SADC members believed that working towards a customs union would be premature.
It would also require enormous effort on issues that would not address the fundamental structural problems confronting economic integration in the region.
"Our approach is that the region's limited resources should consolidate the SADC free trade area," Carim said. Issues that had to be addressed included improving the "rules of origin" regime, enhancing trade facilitation and addressing nontariff barriers. Work was also needed to build the region's productive capacity.
"The key policy issue that arises both in the Southern African Customs Union and the SADC is that the region has not responded to improved market access in SA. South African imports from the region are increasing, but low- value commodities drive most of the growth.
"Intra-regional trade is diversifying slowly. The most serious constraint to balanced regional trade remains undeveloped production structures in the region."
Carim noted that good progress had been made with the integration of trade within the SADC. About 85% of goods traded in the region were duty free, and by 2012 99% would be duty free.
The SADC free trade area will be launched at the next SADC summit in August.
The long-term challenge for southern Africa's industrial policies was to expand the range of products that could be exported and increase the value-added component of those exports, Carim said. The immediate challenge confronting regional integration was the European partnership agreements, which were causing fragmentation. Under these agreements, the SADC had at least five sets of separate trade relations and regimes with the European Union (EU), each very different.
"This will complicate, even foreclose, efforts to build a single trade regime in the region and between the region and the EU, which remains the region's most important trade partner."
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