SADC FREE TRADE SADC FREE TRADE ARRANGEMENTARRANGEMENT

BENEFITS & OPPORTUNIESBENEFITS & OPPORTUNIES

SADC FREE TRADE SADC FREE TRADE ARRANGEMENTARRANGEMENT

BENEFITS & OPPORTUNIESBENEFITS & OPPORTUNIES

Presented by: Sam Legare

Africa Trade Relations Desk

CONTENTCONTENTCONTENTCONTENT

• Background

• Overview of SADC FTA

• Pillars of implementing the Agreement

• Current implementation status

• Specific benefits and opportunities

• Market access requirements

• Contact Details

BackgroundBackgroundBackgroundBackground• Mandate – Develop, promote and support beneficial participation of SA agriculture in international trade

• The Desk – Responsible for SA agriculture trade relations with African countries

• Through the implementation:- SACU Agreement- SADC FTA (Protocol on Trade)- Other trade cooperation

agreements

• Together with the DTI - Facilitate and monitor the implementation of the above Agreements

Overview SADC Free Trade AreaOverview SADC Free Trade AreaOverview SADC Free Trade AreaOverview SADC Free Trade Area

• Regional Free Trade Agreement between 14 Member States ( Exc – Angola and DRC.)

• The agreement establishing SADC FTA = Protocol on Trade : signed in 1996 and effected in 2000

• Objective: Liberalize and promote intra-SADC trade.

• Goal : 85% total trade taking place free of tariffs and other forms of trade barriers by 2008

• How? – Pillars of liberalizing and promoting trade:

- Reduce tariffs among themselves (Tariff phase down)

- Identify and remove NTBs against themselves

- Adopt simple and trade facilitative Rules of Origin

Tariff Phase Down ProcessTariff Phase Down ProcessTariff Phase Down ProcessTariff Phase Down Process• All Member States submitted their Tariff Phase

Down Offers ( 2000)

• Offer – Commitment showing gradual (How & When) elimination of tariffs on all products traded

• Offer – Instrument of implementing the FTA and is gazetted by Member States on annual basis

• Products are categorized (A, B, C and E) in terms of duration of tariff reductions

• Offers are reciprocal and asymmetric.

• SACU (RSA, Botswana, Lesotho, Namibia and Swaziland) made a single offer

Tariff Phase Down StatusTariff Phase Down StatusTariff Phase Down StatusTariff Phase Down Status

Member States

% of tariff lines free of customs duties

Date at which the % was achieved

SACU 99 January 2008

Zambia 95 January 2008

Mozambique

94 January 2008

Tanzania 91 January 2008

Mauritius 86 January 2008

Zimbabwe 86 January 2008

Madagascar

84 January 2008

Malawi 32 July 2007

Identification & removal of Identification & removal of NTBsNTBs

Identification & removal of Identification & removal of NTBsNTBs

• Any trade barrier other than a tariff

- Different quality, standard, technical regulations, etc required for same products

- Unnecessary export or import licensing, quotas bans, etc.

- Ad hoc import / export requirements without notifying trading partners in time

• Agreement – Identify and eliminate all forms of NTBs and refrain from imposing new ones

• NTB Identification and Elimination Mechanism recently adopted in July 2008

Benefits & OpportunitiesBenefits & Opportunities(SADC FTA)(SADC FTA)

Benefits & OpportunitiesBenefits & Opportunities(SADC FTA)(SADC FTA)

• The FTA afford RSA products preferential market access into each SADC Member State:

• FTA provides for elimination of all forms of trade barriers:

- Tariffs ( >85% of total trade is currently free)

- NTBs ( Elimination Mechanism already in place)

- TBTs ( Common technical regulation framework)

• Powerful tool in fostering regional integration and integration into world economy e.g. EU

Market Access RequirementsMarket Access RequirementsMarket Access RequirementsMarket Access Requirements• Compliance with SADC Rules of Origin:

- Ensure that only originating goods enjoys tariff preferences

- RoO specify conditions for products to confer originating status

- Goal - Encourage regional value addition

• Compliance with SPS Measures of the trading partner

- Measures adopted by countries to protect their animal, plant and human from foreign diseases

- SPS Agreement adopted: Obligate Member States to accept other’s SPS measures as equivalent to theirs.

- Basis for harmonizing Member State’s conflicting SPS measures

Contact DetailsContact Details Contact DetailsContact Details

• National Department of Agriculture

• Directorate : International Trade : Africa Desk

• Tel No : 012 319 8026/7/8

• Fax No : 012 319 8001

• Email : SamLe@nda.agric.za