/ 14 November 2006

Mbeki: SADC trade imbalance still exists

The regional trade imbalance in Southern African Development Community (SADC) countries has remained in favour of South Africa despite major tariff removals, President Thabo Mbeki told the SADC parliamentary forum on Tuesday.

The forum consists of representatives from the legislatures of SADC member countries.

”In reality, the trade imbalance in our region remains virtually unchanged,” Mbeki said.

This was despite measures taken to implement the 1996 SADC trade protocol that directed the creation of a free trade area (FTA).

Intra-regional trade had increased from 20% to 25% of total regional trade in the ”six or so” years up to 2003 but it was largely exported manufactured goods from South Africa. Much smaller volumes were imported into South Africa.

Mbeki attributed this to underdeveloped production capacity and inadequate infrastructure in other SADC states and not trade tariffs.

”Our country has already removed duties on over 90% of goods originating from SADC countries.”

It was important to ensure the dominant South African economy did not entrench the underdevelopment of other SADC states, he said.

Programmes to promote greater regional trade should enable producers to emerge and take advantage of additional market-access opportunities.

Clear guidelines were needed for an FTA work programme and only a solid basis for a functional FTA would allow moving towards a customs union, Mbeki said.

SADC aims to establish an FTA by 2008 and a customs union by 2010.

A customs union would allow a common external tariff, for goods from the rest of the world, to be collected and shared.

The Pan African Parliament (PAP) took precedence over the long-term objective of a regional Parliament, the SADC leadership had concluded.

Mbeki said he knew the forum was not ”entirely happy” with this and said it should continue to advocate for a regional Parliament.

The forum should also be involved in accelerating the slow pace of regional integration.

PAP president Getrude Mongella, speaking before Mbeki, said the PAP was prepared to work with national and regional parliaments such as the SADC parliamentary forum.

The forum’s chairperson, Amusaa Mwanamwambwa, also said the PAP’s future strength would require the establishment of regional parliaments.

Mbeki said regional integration had often failed in the developing world and careful preparation was needed to make it sustainable. — Sapa