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Calls for removal of regional trade barriers

New Era, Namibia

Calls for Removal of Regional Trade Barriers

By Wezi Tjaronda, Windhoek

11 April 2007

Civil society organisations and the business community in southern Africa have called for review of trade policies in order to deepen regional integration.

Although businesspeople and civil society organisations generally support deepening integration in the region, areas that they feel should be addressed include putting in place well-designed competition guidelines and trade policies for Southern African Development Community (SADC) as a whole. They also called for tariff reduction.

While both groups support the removal of restrictions to the free movement of services, the business community focused on the removal of tariffs within the region and the establishment of a Common External Tariff to all other countries within the region, while civil society want restrictions to capital and services within the region removed.

These views are contained in a paper entitled “Perception of Business People and Non-State Actors in Regional Integration - A SADC Wide Survey” in the recently released 6th Yearbook on monitoring regional integration in southern Africa.

The yearbook comprises of a collection of papers on regional integration in southern Africa pertaining to economy, trade, security and peacekeeping, among others.

Regional integration is deemed as an important tool to economic growth and development and in southern Africa, which has comparatively small economies, with emphasis on human development, improvement of living standards and social cohesion.

The most relevant trade barriers cited in the survey include customs procedures, high transport costs, exchange rate uncertainties, import duties and cash to be paid, corruption of officials as well as high regional communication costs among others.

While the business community felt regional integration would
increase efficiency and competition especially within the domestic markets, non-state actors felt that integration would open up new export opportunities and facilities for investments as well as joint venture activities from abroad.

The survey by Mariama Deen Swarray and Klaus Schade was conducted in 10 SADC countries to capture perceptions on regional integration within the region and other regional groupings.

The survey also aimed at establishing the degree to which regional integration receives support from businesses and non-state actors.

Respondents from Southern African Customs Union (SACU) and dual member countries agreed that further regional integration within SADC would benefit economies and increase domestic competition.

Unlike other views that integration will also result in negative aspects such as closing down companies, the majority of civil society and businesses expressed the view that domestic production would increase.

“The majority does not expect companies to close down their operations as a result of regional integration. Most of the respondents anticipate that increased regional integration will result in access to cheaper inputs,” the paper said adding that exports to and imports from other SADC countries are also expected to increase.

Other sub-groups such as SACU were optimistic regarding the potential joint venture and business opportunities that further integration would bring.

Likewise, dual state members of Common Market for Eastern and Southern Africa (Comesa) and SADC also felt that integration would bring about increased imports than export opportunities within SADC.

The survey focused on participation in debate on regional integration, perceived impact of regional integration, business climate and trade in SADC, obstacles to trade SADC and the future of regional integration.

Despite their attempt to promote regional integration, non-state actors especially expressed concern that their participation is not fully exploited.

With only 11 percent indicating that they participate regularly in SADC committee meetings and 20 percent are members to the committee, over 90 percent of the respondents indicated that the participation of NSA should be increased.

The paper said that in an attempt to strengthen regional integration, the issue of barriers that hinder trade should not be overlooked especially for the free trade area envisaged for 2008 to have an impact on trade and investment in the region.

Launching the book last week, SACU Executive Secretary, Tswelopele Moremi, said while regional integration brought opportunities and challenges, the region should improve its competitiveness in order to promote growth as well as to level the imbalances within the region.

The book cites South Africa as the only country that received a positive rating attesting to its strong economy in the region, which means that it received more attention that other markets in the region.