Business Day | 26 August 2013
Slow progress in Africa free trade talks
by Linda Ensor
NEGOTIATIONS between three trade blocs in Africa to create a free trade area were running behind schedule in terms of reaching their 2014 deadline but were nevertheless progressing, Trade and Industry Minister Rob Davies said last week.
South Africa attaches immense importance to the negotiations on a free trade agreement between the Southern African Development Community (Sadc), the East African Community (EAC) and the Economic Community of West African States (Ecowas), which promises to create a huge market for intra-African trade and promote the industrialisation of the continent.
In an update of South Africa’s trade negotiations to Parliament’s trade and industry committee, Mr Davies said South Africa was in the process of developing its market access offers and requests within the National Economic Development and Labour Council as a basis for a position of the Southern African Customs Union (Sacu).
A key challenge to the negotiations would be how to deal with rules of origin, particularly with regard to clothing, to ensure that the benefits of the trade preferences accrued to members of the free trade area and not to third-party countries. There would be intense discussions on this, Mr Davies said.
One of the key principles agreed upon was that there would not be any unravelling of the existing trade agreements between countries within each of the zones and that negotiations would take place between each zone and countries outside it. This would mean that members of Sacu would negotiate tariff concessions with non-Sadc members of the free trade area, most notably countries in the EAC and Egypt.
Agreement had been reached that 60% of tariff lines would be duty free at entry, with 25% to be negotiated and with a five- to eight-year period of implementation. Work was under way on a north-south corridor and industrial development.
The committee approved the adoption of the Sadc trade in services protocol for ratification by the National Assembly, which the department’s deputy director-general, Xavier Carim, said aimed to promote regional integration by creating a single market for the trade in services. The protocol was approved at a summit of Sadc heads of state in Maputo last August.
The protocol sets out the legal framework for this trade and has to be ratified by two-thirds of the members of Sadc to enter into force. It establishes a most-favoured-nation regime, which will require Sadc members to accord each other the best treatment accorded to any one country for trade in services and does not prevent members from entering into preferential agreements with third countries.
The protocol will also not preclude member countries from using subsidies to support development.
Mr Davies said the meeting of the ministerial committee of the World Trade Organisation, in Bali in December, could deliver a "modest package" of measures even though the Doha round has been blocked. South Africa would lobby for greater benefits for developing countries.