Regional Trade Integration, Economic Growth and Poverty Reduction in Southern Africa

4 Status and Progress of SADC Regional Trade Integration

4 StatusandProgressofSADCRegionalTrade Integration Tendai Chigwada and Fudzai Pamacheche BackgroundtoSADCintegration The SADC region has been in existence since 1980. Initially, it was formed as a loose alliance of nine majority-ruled states in southern Africa (the Frontline States), known as the Southern African Development Coordination Conference (SADCC), with the main aim of coordinating development projects in order to lessen economic dependence on the then apartheid-South Africa. The transformation of the organisation from a Coordinating Conference into a Development Community (SADC) took place on 17 August 1992 in Windhoek, Namibia, when the Declaration andTreaty was signed. The Community’s vision is that of a common future, a future within a regional community that will ensure economic wellbeing, improvement of the standards of living and quality of life, freedom and social justice, and peace and security for the peoples of southern Africa. The objectives of the Community as stated in the Treaty are to„ achieve development and economic growth, alleviate poverty, enhance the standard and quality of life of the peoples of southern Africa, and support the socially disadvantaged through regional integration;„ evolve common political values, systems and institutions;„ promote and defend peace and security;„ promote self-sustaining development on the basis of collective selfreliance , and the inter-dependence of member states;„ achieve complementarity between national and regional strategies and programmes;„ promote and maximise productive employment and utilisation of resources in the region; 78 REGIONAL TRADE INTEGRATION, ECONOMIC GROWTH AND POVERTY REDUCTION IN SOUTHERN AFRICA„ achieve the sustainable utilisation of natural resources and the effective protection of the environment; and„ strengthen and consolidate the long-standing historical, social and cultural affinities and links among the peoples of the region. OrientationofSADCtradeliberalisationpolicies In southern Africa, trade policy orientations have been characterised by shifts between protectionism and liberalisation. For instance, in the 1980s, most SADC states were characterised by control of imports through licensing , quotas, high tariffs, administrative exchange rate allocations and various non-tariff barriers. However, by the early 1990s, the general economic failure of government interventionist policies and economic decline, coupled with a number of fundamental changes in the regional and international outlook, brought about shifts in development paradigms and, with them, a shift from protectionism to trade liberalisation.1 For many SADC countries, trade policy is guided by the rules and disciplines of regional (Common Market for Eastern and Southern Africa [COMESA], East African Community [EAC], Southern African Customs Union [SACU], African, Caribbean and Pacific Group of States–Economic Partnership Agreement [ACP-EPA] and African Growth and Opportunity Act [AGOA]) and multilateral (World Trade Organization [WTO]) trade arrangements of which they are members, as well as bilateral agreements and autonomous structural adjustment programmes supported by the IMF and the World Bank. With the support of the international financial institutions (the World Bank and the IMF), most SADC countries embarked on autonomous structural adjustment, market-oriented programmes, of which trade liberalisation was a key component. These measures were reinforced by the liberalisation of trade within the SADC trade integration framework, and more importantly, within the multilateral trading system (WTO). Trade liberalisation has seen the lifting of restrictions on trade through the removal of non-tariff trade barriers and the reduction of tariffs . In essence, the private sector is the main player in trade development and the government is the facilitator. Thus, most SADC countries, although at various levels, are pursuing more open trade policies by further liberalising trade within regional and multilateral frameworks. Trade liberalisation is seen as a vehicle for STATUS AND PROGRESS OF SADC REGIONAL TRADE INTEGRATION 79 enhanced domestic productivity, efficiency, improved quality and low prices, which ultimately lead to improved consumer welfare. The common denominator in terms of the trade policy orientations and objectives of SADC countries include:„ Commitment to autonomous trade liberalisation which many countries embarked on prior to the establishment of WTO adoption of SADC trade protocol, or the launch of the COMESA Free Trade Agreement (FTA) launch„ Commitment to regionalism (regional trade liberalisation) as a building block towards multilateralism„ Seeking increased market access for their exports in the world markets through the WTO„ Use of preferential market access currently available under AGOA, ACP-EU and WTO, especially for least developed countries (LDCs)„ Pursuit of a significantly liberalised economy based on tariffs, to include tariff rationalisation, reduction and unification„ Adherence to WTO rights and obligations. Government policy and regulation has attempted to codify the country’s WTO obligations„ Focus on the promotion of exports and...