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SA Trade minister threatens Swaziland

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By NOMILE HLATSHWAYO - SWAZI TIMES-06-Jun-2009

MBABANE – South Africa’s Trade and Industry Minister Rob Davies is reported to have said his country was prepared to set up trade barriers with neighbours; Swaziland, Lesotho, Botswana and Mozambique.

These trade barriers would be meant to stop a flood of cheap imports entering SA, according to SA’s Business Day. Botswana, Lesotho and Swaziland signed the interim Economic Partnership Agreement (EPA) in Brussels on Thursday. The SA minister sounded the warning after learning that Swaziland and the three other countries broke ranks and signed trade deals with the EU. Davies’ warning is a sign that the almost 100-year old Southern African Customs Union (SACU) is in jeopardy, as its rules prevent signatories from entering separate trade agreements with other countries. SACU is the country’s cash cow and over 60 per cent of the national budget comes from SACU receipts. If SA goes ahead with the threat it would pose serious problems for the country (Swaziland) in particular. The SA minister said his country would step up border controls with Swaziland to prevent goods with easier rules of origin from entering South Africa.

We will not be admitting things which do not comply with the rules of origin under TDCA. We will not be allowing them to come into the SA market and if that means we have to introduce border control issues with Botswana, Lesotho and Swaziland and they have to do likewise, then so be it,” said Davies. Independent economist Muzikayise Dube said there were two types of barriers; tariffs and technical barriers to trade. He said the removal of tariff barriers would mean no duties for goods coming into the region from the European Union (EU).

“The removal of technical barriers means the standards of trade would be raised such that goods coming into the region from the EU or elsewhere would have to qualify to enter by meeting certain specifications and standards set by the EU and the region. What that does is that any commodity that is sub-standard is rejected and whosoever brings those sub-standard goods would be penalised,” he said.

One of the significant changes to trade rules under the EPA is that of more favourable rules of origin for clothing and textiles, a sector SA wants to protect, Business Day said. Dube explained; “There has been a problem in the region with the influx of clothing and textiles from Asia, particularly China. This has raised concerns of dumping, as this clothing is rejected in other countries and then dumped in the region. Sometimes, the goods would be exported into Swaziland, and other countries in the region, and then routed to SA. This has been the main problem and probably the reason why SA now wants to close that loophole in order to stop the influx of cheap imports.”

The problem SA has is that in terms of the SA’s Trade Development and Co-operation Agreement (TDCA) with the EU, garments need to undergo two stages of conversion to be allowed into the SA market, while the EPA rules of origin eases obligations to single-stage conversion.


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