Free trade deal struck

Trade and commerce ministers of the Southern African Development Community (SADC) have agreed amendments to a proposed free trade agreement (FTA) paving the way for its adoption by heads of state next month, South African government officials told IRIN on Thursday. Edwin Smith, the spokesman for South Africa’s Trade and Industry Minister Alec Erwin, said the FTA will come into effect on 1 September this year. “The main thrust of the FTA entails the phased reduction and eventual elimination of customs duties by member states on goods originating in each other’s territories,” Smith told IRIN. The heads of state of SADC are expected to sign the agreement when they meet next week in the Namibian capital, Windhoek. Smith said agreement on the reduction of tariffs has been the major issue of contention in the negotiations since the protocol was initialled in 1996. He said, however, last week’s meeting of trade and commerce minister in Tanzania approved amendments acceptable to all 14-member states. Under the agreement, the five-member Southern African Customs Union (SACU) has undertaken to accelerate the reduction of customs duties on goods originating in the other SADC countries. “This means that in the short term, non-SACU members will enjoy preferential access to the SACU market,” Smith said. SACU consists of South Africa, Botswana, Lesotho, Namibia and South Africa. Smith said this concession is intended to stimulate production in all neighbouring countries and to improve their export performance. “In turn, this will contribute to economic growth and increased foreign exchange earnings in the non-SACU SADC countries,” Smith said. He added that South Africa has already reduced its tariffs on goods entering its market from SADC member countries: “The South African parliament ratified the 1996 protocol in November 1999 and came into force in January this year after it was ratified by two-thirds of the SADC member states.”