Trade and Industry

Tuesday, 21 October 2008

Implementation of the SADC Trade Protocol and the Intra-SADC Trade Performance

  • Year: 2008
  • Organisation: TIPS
  • Author(s): Mmatlou Kalaba;Mbofholowo Tsedu

The Southern African Development Community (SADC) has been implementing the trade protocol for more than seven years. The aim is to liberalise trade flows between members and eventually lead to deeper integration in the region. As member states are preparing to enter another layer of integration in the form of a free trade area, it is also an appropriate moment to evaluate the performance of the implementation of the trade protocol. In this paper, an assessment of intra-SADC trade performance is done by focusing on intra-SADC export share, comparing intra-SADC share with other regional blocs and intra-country trade share. The results show that despite impressive growth in total exports between 2000 and 2006, intra-SADC trade remains weaker. A comparison of SADC with other regional blocs shows that intra-regional trade provides the necessary impetus for deeper integration and regional progress. However, SADC is lagging behind most regions. SADC's growth of extra-regional trade was more than with fellow members. Trade between countries also reveals that more than two thirds of total trade is with South Africa. Potential causes for this outcome include exports of raw materials and intermediate goods, failure to meet tariff reduction requirements, increasing commodity prices, existence of other forms of barriers as well as the challenges relating to weak manufacturing capacity, poor physical infrastructure and unresponsive supply side bottlenecks. As SADC enters another level of integration, it should make sure that the necessary mechanisms to address these challenges are in place so that the region can realise the associated benefits.