Download How do Southern and Eastern Africa feature in South African Trade

South Africa Trade Strategy:
Rearranging the Deck Chairs?
How do Southern and
Eastern Africa feature in SA’s
Trade Policy?
SAIIA, Johannesburg
2nd August 2006
Mark Pearson
SADC Trade: Overview
- Bulk of imports of SADC countries from OECD.
- SACU countries source <2% of imports from rest
of SADC and 17% from within SACU.
- Zambia and Malawi source 57% and 54% resp of
imports from SADC (about 40% from SA).
- Generally, rest of SADC exports commodities to,
and imports manufactured goods from, SA.
- About 19% of SA’s exports go to Southern Africa
region, with 13% going to other SACU members.
- About 70% of intra-SADC trade comes under
existing RTAs – SACU accounts for almost all but
the COMESA FTA important for some countries.
- Overlapping RTAs and 19 bilaterals in SADC.
SADC Trade Protocol: Who needs it?
- South Africa joined SADC in 1994 – main interest
has been in trade, finance and investment. Debate
was whether to be a member of SADC or PTA/
COMESA. SADC favoured – propinquity factor?
But South Africa has shown it does not need a
RTA to expand trade in most SSA countries - led
by an aggressive offensive by Shoprite/Checkers,
Illovo, La Farge, etc. The companies are big
enough to negotiate their own concessions and
investment requirements.
- To expand trade, RSA does not need the SADC
Trade Protocol, but it does need to open up its
markets to the rest of Africa to build the AEC.
ESA RTAs
- SADC TP signed 1996, implemented 2000 – FTA
by 2008 – target is 85% of trade zero-rated –
remaining sensitive products zero-rated by 2012.
Product-specific rules of origin – restrict trade.
RISDP sets 2010 as goal for Customs Union and
Common Market by 2015.
- COMESA FTA launched in 2000 – 11 countries
implementing – liberal rules of origin but most
disputes under FTA on origin. Customs Union by
2008, following a roadmap.
- EAC FTA and Customs Union by 2004. Derogation
for COMESA/SADC now to 2010.
ESA RTAs – Achievable or Pipe Dream?
- SADC Customs Union – will it be an expansion of
SACU? If not will SACU be disbanded or will there
be two CUs? Will the two customs unions be
linked? If SADC CU = SACU will the revenue
sharing formula continue? What is SA’s position?
- Is a SADC CU practical or feasible? 5 countries in
SACU. Six countries negotiating the COMESA CU
– progress being made in implementing roadmap
so on-target for 2008. Tanzania in EAC CU. 2
SADC countries not in, or not negotiating, a CU.
- Option – strengthen SACU and COMESA/EAC
and agree on trade protocol between these? Will
SA take account of developments in rest of Africa?
WTO and the ESA Region
- Countries in the Eastern and Southern African
region have different interests at the multilateral
level, reflected in memberships to different bodies.
SA has offensive interests in Agriculture (G20) and
defensive interests in NAMA (NAMA11).
- Most other countries in ESA region are LDCs different interests to protect – e.g. preferential
market access to EU and US (subject to origin
being conformed) so if tariffs reduced for nonLDCs, preference margins are reduced. LDCs
cannot take advantage of improvements in market
access unless supply-side constraints removed –
AfT and EIF. Also important – Food Aid, SPs, etc.
Effects of DDA breakdown on LDCs
- DDA a “round for free” for LDCs? Not really.
Successful Doha outcome will “cost” all members
but should cost LDCs less so they can migrate.
- LDCs have the most to lose from a failed round
and from maintaining the status quo.
- Bilaterals favour the strongest partner.
- No development component so no
improvement in SDT.
- Can the DFQM market access and
liberalised Rules of Origin be salvaged?
- What happens to AfT and EIF?