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SADC Customs Union could boost SD’s exports by 30%

Business Section

By FAITH SHONGWE - THE SWAZI TIMES-03-Sep-2009

MANZINI- Establishing the SADC Customs Union could boost Swaziland’s exports to non-SACU member states in the SADC region by 30 per cent.

The Southern African Development Community (SADC), of which Swaziland is a member, has set a target to launch a customs union in 2010. However, several factors, such as the fact that there is still a lot of outstanding work that needs to be undertaken to achieve regional integration have resulted in an unlikely situation of meeting the 2010 deadline.

Senior Trade Policy Analyst in the Trade Promotion Unit Khethiwe Magagula said already, technical working groups had been established that were to look into creating the preliminary ground work for the establishment of the customs union.

These groups include the Common External Tariff group, that has already updated the tariff and statistical nomenclature in line with the international standards, the Legal, Administrative and Industrial Framework that has already produced the first draft of the framework protocol establishing the customs union and various other working groups. “However, we are not quite sure that the 2010 deadline is realistic because there is still a lot of outstanding work that needs to be undertaken to achieve regional integration,” she said.

Magagula was speaking during a workshop hosted by the Common Market for Eastern and Southern Africa (COMESA) Secretariat, Southern African Development Community (SADC) and government on Trade Opportunities and Non-Trade Barriers (NTBs) Reporting held at the Mavuso Trade and Exhibition Centre yesterday.

Magagula further said the SADC countries would be able to be certain if the 2010 deadline would be met after the SADC Ministerial meeting, currently taking place in the Democratic Republic of Congo. Meanwhile, Trade Specialist Dr. Yves Van Frausum said the country’s export performance was sensitive to import tariffs applied in destination markets.

“We started our analysis of trade in Swaziland in 2003 and we were looking at many sectors in the economy. The analysis indicated that the Swazi economy is open, with heavy specialisation in sugar and sugar-based products, wood and wood-based products, among others. Opportunities do exists for Swaziland to promote exports to other markets, for instance, non Southern African Customs Union (SACU), SADC and European Union (EU) or the United States and to re-direct trade to more attractive countries.”

Elaborating on the findings of the analysis, Van Frausum said; “We have also found that Swaziland is sensitive to import tariffs applied in destination markets. Establishing the SADC Customs Union could boost export to non-SACU members in the SADC by 30 per cent.” On another note, Frausum said in order to become an industrialised country; Swaziland needed to expand the manufacturing sector.

“This should include focusing on producing semi-finished steel products, fabricated metal base products and cast products, consumer durables, as well as furniture. These products represented about two thirds of the world’s trade and they also represent about 70 per cent of developing market economies exports in various goods, excluding oils, gas, ores, live animals, cereals and raw wood,” he said. He further said exports of developing market economies in the above sectors represented about 24 per cent of world trade.


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