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Pressure on SADC states to clear way for free trade area

Business Day (South Africa)

16 August 2006

Pressure on SADC states to clear way for free trade area

Wyndham Hartley

Parliamentary Editor

CAPE TOWN - Pressure was mounting on Southern African Development Community (SADC) leaders to get economic integration back on track in a bid to meet the 2008 target date for a free trade area in the region, said Deputy Foreign Minister Aziz Pahad yesterday.

He said that if the SADC did not do something drastic, the targets would become harder to achieve.

The SADC had “fallen back a bit from the targets” and therefore, its summit, which opens in Maseru tomorrow, would have to discuss whether the changes made to its bureaucratic structures two years ago were working, said Pahad.

The SADC also needed to come up with mechanisms to ensure that the protocols were being implemented by member states. These included an agreement to phase out tariffs applied to members’ trade, which will lead to the region becoming a free trade area.

Briefing the media ahead of the summit, which will be attended by President Thabo Mbeki, Pahad said SA should play a more aggressive role in ensuring that the regional body did what it was supposed to do. He said SA needed SADC as much as the SADC needed SA.

He said the indications from member states were good for progress to be made in the economic integration of the region. Pahad cited positive developments in Angola’s oil industry that would see 25% growth achieved this year. He also said the region had stabilised. He did not mention Zimbabwe at all.

Pahad said that while economic growth was beginning to take off in the region, the vast majority of its people were still living below the poverty datum line and this would have to be addressed by the summit.

Market integration and the creation of a free trade area were key issues for the SADC development agenda. He said the phasing out of tariffs was “generally on track”. However, the SADC summit will have to concentrate on how to “revitalise” the economic integration agenda.

The free movement of people between member states was also an integral part of the creation of a free trade area, he said.

Pahad said he hoped the free movement of people would be “managed” in much the same way as in other economic unions.

This might include allowing people from neighbouring states to cross borders without a visa. He said SA had signed the protocol on free movement of people but this had to be ratified by Parliament. Some member states had not yet signed.

In 2000, when SA began the implementation of a free trade system for the region, about 25% of goods traded in the region had zero tariffs. The target for 2008 was 85%, he said.

Pahad said this would open up the region considerably. South African exports to the region have increased in the five years 2001-05 from R215bn to R320bn. Regional trade into SA increased from R24bn to R70bn in the same period.

SA’s trade dominance would also be discussed.