SACU states renegotiate terms

Globalisation is forcing Southern Africa to rethink traditional ways of doing business, and the five-member Southern African Customs Union (SACU) comprising South Africa, Namibia, Botswana, Lesotho and Swaziland is attempting to meet the challenge by renegotiating its original 1969 charter. A spokesman for the South African Department of Trade and Industry who is involved with the negotiations told IRIN on Tuesday: “We envisage a completely new agreement. Of course some of the fundamentals would remain the same but the whole point of these negotiations is to create a new mutually beneficial agreement for all SACU members.” He added that the new agreement would attempt to move away from simply being a customs union to more of a regional economic grouping which would be more relevant to its members. The spokesman told IRIN that one of the main areas of discussion has been policy changes and reform. He said that in sectors such as agriculture and industrial development change was needed “to harmonise all the various policies so that there could be greater regional benefit.” According to the spokesman the recent Free Trade Agreement (FTA) between South Africa and the European Union (EU), has had no real “impact” on the negotiations: “Obviously we have experienced some problems. One of them being the anxiety expressed by some members over the decline in the revenue pool that is expected.” Under the FTA, EU goods would enter South Africa with no import duties. “The deal that South Africa has with the EU needs the blessing and cooperation of SACU, without it the agreement could never really be successful,” the spokesman added. But one regional economist told IRIN that countries like Swaziland and Lesotho stood to lose because “their economies depend heavily on tariff-based revenues.” She said: “How do you tell countries like these that everything is going to be okay when they stand to lose up to half of their annual budgets?” Recently the EU announced that it was giving Swaziland about US $1.3 million to deal with the economic impact of the FTA and to build economic capacity in that country. The EU added that it was looking at offering a similar kind of package to Botswana, Namibia and Lesotho. Meanwhile, the 14-member Southern African Development Community (SADC) has expressed concern over the FTA agreement as it attempts to build a region-wide free trade area. “In the end all these regional economic groupings are going to have sit down with each other and discuss a more integrated and focused approach. If we have everybody running in different directions then the region is never going to achieve sustainable economic growth,” the economist added.