Angola, DRC slow down FTA

Southern Times | 21-02-2011

Angola, DRC slow down FTA

By Felix Njini

Windhoek – The SADC Secretariat has achieved little progress in getting Angola and the Democratic Republic of Congo (DRC) to joining its trade liberalisation process, the Free Trade Area (FTA), which has been in existence for nearly three years now.

Angola, DRC and Seychelles are three SADC members which are not part of the FTA, a process which is expected to fully liberalise trade in the region by 2012.

Angola is signatory to the SADC Protocol on Trade but has seemingly been dragging its feet in phasing down tariffs to fully participate in the trade liberalisation programme.

SADC countries, COMESA and East African Community (EAC) are already preparing to launch the ambitious grand FTA, which will encompass the three blocs and is widely viewed to offer tremendous trade opportunities.

Regional blocs such as SADC, EAC and COMESA are supposed to be the building blocks for the envisaged grand FTA.

At last year’s summit in Windhoek, SADC Executive Secretary Dr. Tomaz Salomao urged countries which have not joined the FTA to immediately submit a list of tariff proposals and to align their customs laws and procedures to international benchmarks.

Angola and DRC are emerging from decades of internal strife. Seychelles rejoined SADC in August 2009.

While Angola has just started modernizing its customs administration, progress in trade liberalization alongside SADC peers joining the FTA has been slow.

The absence of Angola and DRC in the FTA process is now casting aspersions on the viability of the ambitious programme. While SADC Secretariat has maintained that the FTA has made progress, critics point to the programme’s slow take-off.

’During the initial tariff phase downs between 2000 and 2008 both Angola and DRC had peculiar situations resulting in a delay to their participation.

The economies are undergoing reconstruction following war.

As regards Seychelles it must be noted that it rejoined SADC in August 2009.

When you consider all these factors, then it can be concluded that FTA has been a success and you cannot really say there has been undue delay,’ Boitumelo Gofhamodimo, SADC’s director of TIFI told The Southern Times.

’Both DRC and Seychelles have expressed commitment to join the SADC FTA.

This is the first step which must be followed by the phasing down of tariffs guided by the accession rules and procedures. Consultations are due to take place with DRC to establish how and when the process to facilitate DRC’s participation can commence,’ Gofhamodimo added.

SADC has also been struggling to implement its grandiose trade liberalization idea with member states continuing to impose non-tariff barriers (NTBs) to trade one after another.

So far the Secretariat has pushed forward its tariff phase down deadline in trade in sensitive products to 2012 but its unlikely that member states will comply with the deadline.

Gofhamodimo told The Southern Times that two countries are behind schedule with regards to tariff phase in trade in sensitive products.

Sensitive products are those which are of economic importance to countries and sensitivity is based on revenue earnings, employment creation, infant industry which requires some form of protection.

The products range from motor vehicles, textiles and clothing, beef and sugar among others
. ’Some member states therefore considered that they required protection for some time. Sensitive goods were the last to be liberalized in the tariff phase down schedule, and this process commenced in 2008 and will run till 2012,’Gofhamodimo said.

The FTA, which was officially launched in 2008, was expected to be the springboard for the realization of a customs union in 2010, a monetary union in 2015 and a single currency in 2018.

SADC last year pushed the launch of the customs union to an unnamed date, a hint of problems the trade liberalization agenda is facing within the region.

The Secretariat however maintains that the FTA is on course and targets would be achieved.

’Eleven countries participating who are members of the FTA have reached the 85 percent liberalization threshold. Malawi, which was behind schedule, has recently amended its tariff schedules extensively, thus undertaking further liberalization.

The gazette effecting the change was submitted during the meetings in Namibia last week, and we are yet to establish whether or not it has attained or exceeded the 85 percent threshold,’ Gofhamodimo said.

source: Southern Times