Some progress is being made in the implementation of the Southern African Development Community Free Trade Area (SADC FTA), with dedicated negotiations on Angola’s provisional schedule of tariffs scheduled to start in January 2023.
This came out of a Trade, Industry, Finance and Investment (TIFI) Thematic Group meeting held on 10th November 2022 and co-chaired by Mr Sadwick L. Mtonakutha, Director of Finance, Investment and Customs (FIC) at the SADC Secretariat, and Ms Annelene Bremer, Counsellor for Development Cooperation from the German Embassy in Botswana.
The meeting received an update on the SADC FTA, Tripartite Free Trade Area (TFTA) and African Continental Free trade Area (AfCFTA) and heard that Angola is making progress in ratifying the FTA and presented its updated tariff offer in February 2021 in preparation for negotiations. Democratic Republic of Congo (DRC) is committed and undertook to present its updated roadmap on accession in due course.
SADC comprises 16 Member States, 13 of which are already implementing the FTA. The SADC FTA members are Botswana, Eswatini, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, United Republic of Tanzania, Zambia and Zimbabwe. DRC and Comoros are yet to join the SADC FTA while Angola has recently submitted an offer to accede to the FTA.
The SADC FTA's main goals are to bring down barriers in trading, specifically tariffs and import quotas, and encourage the free trade of goods and services among its member countries. The update presented during the TIFI Thematic Committee meeting showed that a study on the impact of recurring Non-Tariff Barriers (NTBs) in the SADC Region will be undertaken in 2023.
The meeting heard that the Protocol on the SADC Trade in Services went into force in January 2022, after ratification by 11 Member States. The five Member States that have not yet ratified the Protocol will not enjoy the preferences given under the schedules of specific commitments for services sectors of communication, construction, energy-related, financial, tourism, and transport, regardless of their status in negotiations.
The SADC Protocol on Trade in Services aims to encourage increased intra-regional trade in services through the gradual removal of unnecessary or overburdensome regulations affecting the cross-border supply of services within the SADC Region, a process known as progressive liberalisation.
The TFTA Market Integration pillar has been ratified by 11 Member/Partner States, and only three are now needed for it to enter into force. Six SADC Member States have ratified the TFTA and these are Botswana, Eswatini, Namibia, SA, Zambia, Zimbabwe. However, negotiations have been suspended on the Protocol on Trade in Services, to benefit from results on AfCFTA negotiations. The TFTA is founded upon three main pillars, namely Market Integration, Infrastructure Development and Industrial Development. The Market Integration Pillar focuses primarily on the removal of tariff and non-tariff barriers to trade (particularly trade of goods), followed by a more gradual promotion of trade in services.
The TFTA comprises members of the three Regional Economic Communities in Africa – SADC, the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA) and is the biggest FTA on the continent, stretching from Cape Town in South Africa to Cairo in Egypt, creating an integrated market with a combined population of almost 600 million people and a total Gross Domestic Product (GDP) of about US$1 trillion.
The AfCFTA Agreement has already come into force and is in implementation, but negotiations are still ongoing with regards to some outstanding issues. Four SADC Member States are still to ascent to the AfCFTA and these are Botswana, Comoros, Madagascar and Mozambique.
Trading under the AfCFTA commenced on 1 January 2021. Customs processes, procedures, and instruments that are required for effective trading under the AfCFTA are being refined. The AfCFTA Secretariat is working to complete negotiations on Phase I issues.
The signature of the AfCFTA Agreement remains at 54 African Union Member States, the number of ratifications has increased to 44 and there are 11 countries that are yet to join the AfCFTA family and, among them are Botswana, Comoros, Madagascar, and Mozambique.
There are 46 provisional schedules of tariff concession received, including those from EAC, Economic Community of West African States (ECOWAS), the Southern African Customs Union (SACU), and Economic and Monetary Union of Central African States (CEMAC).
On the rules of origin, 4,746 tariff lines (out of 5391 tariff lines) have been adopted, but there are still 645 lines on negotiations, affecting textiles and clothing, and motor vehicles.
The instruments to implement the AfCFTA Agreement have been approved and adopted, including AfCFTA E-Tariff Book, Rules of Origin Manual, Origin Declaration Form, Certificate of Origin, Supplier’s Declaration, mechanisms for reporting, elimination, and monitoring of NTBs.
Negotiations on Phase II issues are in mixed status, some of them have been finalised and submitted for approval by the Assembly (Protocols on Competition Policy, Intellectual Property Rights and Investment) while others are not yet to be finalised and submitted (Protocols on Woman and Youth in Trade and on Digital Trade).
The AfCFTA is an ambitious trade pact to form the world’s largest free trade area by creating a single market for goods and services of almost 1.3 billion people across Africa and deepening the economic integration of Africa.
The AfCFTA aims to reduce tariffs among members and covers policy areas such as trade facilitation and services, as well as regulatory measures such as sanitary standards and technical barriers to trade.
