logo logo

SADC not ready for customs union: Tralac

SABC News | July 17, 2008

SADC not ready for customs union: Tralac

By Frank Nxumalo

Business chambers from southern Africa believe that talk of a single Southern African Development Community (SADC) Customs Union - that would replace the Southern African Customs Unions (SACU) and Common Market for Eastern and Southern Africa (Comesa) - is premature until a SADC Free Trade Area (FTA) is fully in place.

SADC is set to launch a FTA in about a month’s time on August 17, 2008. However, integration of the region will not be limited to the creation of a FTA. According to the Regional Indicative Strategic Plan, SADC plans to follow this up with a Customs Union in 2010, a Common Market in 2015, a Monetary Union in 2016, and a Single Currency in 2018.

"Although the private sector strongly supports the promotion of intra-SADC trade and investment, they agree that it is unrealistic to introduce a Customs Union until the FTA has been fully and successfully implemented," says Paul Kruger, a researcher with the Trade Law Centre of Southern Africa (Tralac).

Disagreement on integrated market
Kruger also noted that there was still disagreement among member states on the best way of achieving an integrated market for the region as was evident in a SADC meeting earlier this month.

"South African representatives were primarily focused on exporting products to the rest of SADC quickly, efficiently and economically as possible. In contrast, representatives from the rest of SADC were less concerned about trade facilitation and more about the supply side capacity by creating the right environment and conditions for their manufacturing industries," says Kruger.

"This raises the following questions: how feasible is the creation of a SADC Customs Union considering the existence of SACU and the intention of Comesa to become a Customs Union by next year? SADC trade protocols also place a number of obligations on member states to harmonise policies towards the creation of a Common Market and an Economic Union - how will compliance with these protocols be guaranteed, and how will the South African stance be reconciled with the rest of SADC?"

 source: SABC News