SADC FREE TRADE ARRANGEMENT BENEFITS & OPPORTUNIES Presented by: Sam Legare Africa Trade Relations Desk

CONTENT Background Overview of SADC FTA Pillars of implementing the Agreement Current implementation status Specific benefits and opportunities Market access requirements Contact Details

Background 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 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 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 Status Member States % of tariff lines free of customs duties Date at which the % was achieved SACU 99 January 2008 Zambia 95 Mozambique 94 Tanzania 91 Mauritius 86 Zimbabwe Madagascar 84 Malawi 32 July 2007

Identification & removal of NTBs 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 & Opportunities (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 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 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