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(TALKZIMBABWE) SADC now a free trade area

SADC now a free trade area
Itayi GARANDE
Tue, 19 Aug 2008 05:25:00 +0000

A map of the Free Trade Area (FAT) is shown on the screen during the 28th summit of the Southern African Development Community (SADC), in Johannesburg, South Africa, Aug. 17, 2008. The SADC officially launched the Free Trade Area (FTA) under the theme of "SADC Free Trade Area for Growth, Development and Wealth Creation" on Sunday.(Xinhua Photo/Xu Suhui)

THE Southern African Development Community (Sadc) which boasts 15 members including Zimbabwe, is now a Free Trade Area (FTA) as leaders attending the just ended summit of heads of states and government have signed the related agreement.

Following along the lines of the European Union and other regional free trade zones the region has made a historic step toward the vision of a fully integrated economic region.

This means most goods produced in the region can now enter member countries free of custom duties. As for January next year, 85 per cent of goods will be exempted from tax in the SADC area aiming to fully liberalize by 2012. This will help to facilitate smooth operation of business among SADC member states and reach out to 230 million consumers in the sub-region.

The memorandum establishing the FTA – an idea first mooted (and adopted) in Maseru, Lesotho after it gained independence from Britain in 1966 – says it is expected to enhance economic growth, create jobs and fight poverty in the region.

The current SADC Chair President Thabo Mbeki launched the trade protocol, and praised the region's joint effort. He warned against taking the agreement for granted as it was a major step in the development of the region.

“I raised this because we need to resuscitate the shared vision and commitment, the unity and cohesion that has characterized Sadc from its inception”, said President Mbeki.

In line with this vision, the South African president pledged the Sadc troika's total commitment to resolving the Zimbabwe crisis, stressing that only Zimbabweans will be able to truly find a solution to the crisis in the country.

Eleven of the 14 countries that are part of the Southern African Development Community (SADC) will participate in the Free Trade Area. These are Botswana, Lesotho, Madagascar, Mauritius, Mozambique, Namibia, Swaziland, Tanzania, South Africa, Zambia and Zimbabwe

Three SADC countries - Angola, the Democratic Republic of Congo and Malawi - plan to join at a later date due to weak economies.

The Free Trade Area precedes a Customs Union planned by 2010, a Common Market by 2015, Monetary Union by 2016, and a single currency by 2018.

The agreement is inspired by the classic principles of comparative advantages, which in this case advocate that member countries should produce and export goods with a comparative advantage, importing good from the region’s countries that they are unable to efficiently produce themselves.

The two-day summit was also marked by the return of the Seychelles, a small archipelago in the Indian Ocean which decided to move out of the Sadc immediately after it joined in 2000 for economic reasons. It is yet to join the FTA.

Labels: FREE TRADE AREA, SADC, SADC FREE TRADE AREA

posted by MrK @ 3:06 PM