Vol.22 No.194

Friday 16 December 2005    

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Business Week
Countries to decide on regional membership

BESTER GABOTLALE
Staff Writer

12/16/2005 4:27:35 PM (GMT +2)

There is no deadline yet for Southern African Development Community(SADC) member countries with dual memberships to relinquish their memberships to other regional economic integration blocks, according to the Minister of Finance and Development Planning, Baledzi Gaolathe.


"It has been left to the individual countries. There is no compulsion on any country to decide," he told Mmegi in an interview.

Gaolathe says as SADC implements the SADC Trade Protocol and moves towards a Free Trade Area due in 2008, and a customs union in 2010, countries will sort themselves out.

No one country can belong to more than one customs union which is an advanced economic integration model based on common external tariffs.

The Southern African Customs Union (SACU) is in a customs union. SADC is due to become a customs union in 2010, which means SACU members - South Africa, Botswana, Namibia, Lesotho and Swaziland - will be in a quandary.

"When we go into a common market, we may not need SACU as it is," said Gaolathe.

He said SACU was a more advanced economic union compared to others like SADC .

"We are already a customs union. We have common tariffs and once goods enter the region they move freely," he said.

SACU, formed in 1910 is the oldest customs union and has moved faster than any other region in integrating its economies.

Other SADC members - Zambia, Zimbabwe and Mauritius - belong to the Common Market for East and Southern Africa (COMESA), another regional body with an expansive membership.

"Through dialogue, these things will harmonise by themselves," he argued, adding: "It is not a pressing issue."

US Ambassador to Botswana, Katherine Canavan agrees with Gaolathe.

She said for as long as the regional bodies have strategic goals that are the same as the African Union's (AU) it is not a huge problem."

If, said Canavan, the strategic goals of SADC and COMESA were the same, Zambia, which belongs to both, would have no problem.

"It is something that is workable," she said, arguing that some countries have overlapping interests.

"Zimbabwe and Zambia also have east African interests," she said.

"I don't see the overlapping organisations as a problem. It will depend on the flexibility of the secretariats and member countries," she said.

The East African Community (EAC) comprising Tanzania (SADC), Kenya and Uganda has been resuscitated and all these organisations are expanding as they continue to acquire new members.

However, with the on-going negotiations for the Economic Partnership Agreements (EPAs) with the European Union, SADC member states have found themselves negotiating in different configurations.

Angola, Botswana, Lesotho, Mozambique, Namibia, Tanzania and Swaziland are negotiating under the EU-SADC EPAs group, but Zambia, Zimbabwe and Mauritius chose the Eastern and Southern Africa (ESA), a loose configuration, which also includes Kenya, Uganda, and Rwanda.

It is only last week that the Botswana minister of trade and industry, who is the chief coordinator of the SADC/EPA negotiations, met his ESA counterpart from Rwanda, months after he was mandated by the SADC Council of Ministers meeting, held in March in Mauritius to open dialogue with ESA in order to harmonise their EPA negotiations with the EU.

The council feared potential conflict, which could result from the negotiations as a result of the overlapping membership in the two systems, an issue long voiced out by many stakeholders before the commencement of the negotiations.

Their fear is that the two groupings may come up with different agreements with the EU and this could throw SADC into a messy situation as it moves towards a free trade area and a customs union.

South Africa, on the other hand, has a different trade agreement with the EU and participates in the SADC/EU EPAS as an observer.

The Africa Union (AU) has decided to use regional integration bodies as building blocks towards greater integration at a continental level.

The European Union (EU), now reviewing the Cotonou Agreement to make it World Trade Organisation compliant, is negotiating the Economic Partnership Agreements (EPAs) with the African, Caribbean and Pacific countries using regional economic bodies.

The AU and EU believe that individual member countries cannot, on their own, stand their ground in the competitive global trading arena, hence the need for regional economic bodies.

Further, they believe there must be capacity building and promotion of intra-regional trade.

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