Tighter rules on regional trade

South Africa's proposal to tighten the rules of origin to govern trade within the Southern African Development Community (SADC) makes economic sense, analysts told IRIN on Thursday. "South Africa produces much bigger volumes than most of its SADC counterparts, and the insistence on tight rules of origin is meant to prevent SADC countries from repackaging imported goods and trading them in the region on behalf of 'fly-by-night' operations," the analysts said. South Africa, together with Lesotho, Namibia, Swaziland and Botswana, grouped in the Southern African Customs Union (SACU), wants SADC to agree to a plan whereby tariffs would be significantly lowered on goods that have a proven substantial local content, especially in the clothing and textile sectors. "Weaker rules of origin, which were apparently preferred by some SADC states, were a recipe for disaster," a South African trade and industry official was quoted as saying by South Africa's 'Business Day'. "Tightening the rules of origin would help to keep jobs in the SADC countries," the analysts said, adding that as goods move freely between the SACU countries, the liberal trade regimes of most SADC countries would come under closer scrutiny. "This move will minimise the practice of dumping products in the region by operations chasing incentives," the analysts said. Negotiators are meeting in Botswana this week to finalise SADC's 1996 free trade protocol ahead of next week's meeting of the region's trade and commerce ministers who would be expected to sign the document. The region's heads of state are scheduled to meet in September where a free trade deal, if concluded, would be ratified, press reports said.