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SACU busy with painful discussions, says Manuel

Business Day, South Africa

SACU busy with painful discussions, says Manuel

18 September 2009

The Southern African Customs Union (SACU) is having very painful discussions at the moment in Swaziland on its very future, said Minister in the Presidency for National Planning, Trevor Manuel.

Speaking at an Institute of International Affairs economic and political conference at Jan Smuts House at Wits University, he said that if the architecture of the common external tariff is changed, you can’t have a customs union any more.

"I think those are very painful discussions," he said.

SA’s finance and trade ministers are reportedly in attendance at the meeting.

Some views have emerged from Europe that South Africa has a low interest in SACU due to the high costs and its other priorities. But Manuel, in fact, seemed to take the opposite view today and said that it is not a good show if southern Africa battles to hold together a customs union between just 5 countries, when integration in Africa is actually needed going forward.

"We are battling to have a customs union between five countries and to keep body and soul together because there are outside interests," he said.

"You can’t belong to 2 customs unions according to WTO rules," he pointed out.

"We need building blocks to attain an eventual Africa common market, else we can’t take our place at the table," said Manuel.

"You can’t bypass the Africa blocs to get a United States of Africa."

"We must construct economies with a different market size and structure and need the infrastructure to support it," was his message on the role and challenge for Africa going forward.

SACU started facing a very uncertain future after 3 member states, Botswana, Lesotho and Swaziland, initialed an interim economic partnership agreement with the EU.

SACU is the world’s oldest customs union going back to 1889’s Customs Union Convention between the British Colony of Cape of Good Hope and the Orange Free State Boer Republic. In 1910, the agreement extended to cover the then British territories of Basutoland (Lesotho), Bechuanaland (Botswana), and Swaziland. Namibia (then South West Africa) was a de facto member as it was part of the South African administration.

In the EPA, each sovereign state pushed for the trade of its own goods and investments with the EU, creating self-dependency, thus cutting dependency on South Africa.

It may be that Manuel – and likely SA’s ministers currently in Swaziland - are of the view that the sub-division of interests and trade groupings serves the EU’s interests rather than Africa’s.