Deepening Integration in SADC - Fes-botswana.org

It is therefore, imperative that for the macroeconomic policies to be
conducive to a regional FTA between Member States, and conducive
for the region to conclude an EPA, there has to be targeted trade and
economic policy adjustments among the member states. This will be a
sine-qua-non given that one of the objectives of the proposed EPA is
to stimulate greater supply-side response and investment in the SADC
region. In the field of trade, the SADC Trade Development and
Promotion Strategy lists the obstacles to the development of SADC
trade as:
An inadequate production base;
Inadequate trade policies;
Run down and inadequate infrastructure;
Inadequate market information;
Insufficient commercial skills;
Inadequate involvement of the business community.
There is need to have adequate or consistent national macroeconomic
policies and institutional environment, such as (i) harmonising external
tariffs and moving to a common external tariff as quickly as possible,
and (ii) lack of a national competition policy and appropriate legislation
in place so that countervailing duties can be applied, within the WTO
guidelines, to counteract dumping.
Identification of Costs and Benefits: A range of benefits can accrue
to SADC member states on deepening regional integration over the
short and long term and can be of an economic, political and
institutional nature. The chances of these benefits accruing increase
with the degree of liberalisation undertaken. Yet for some members,
the costs may outweigh the benefits. The two most common forms of
regional integration are free trade areas (FTAs) and customs unions
(Cus), (McLeod Helena, 2003).
A customs union is a more advanced form of economic integration
where internal barriers are fully removed and the regional integration
(RI) has a single external trade policy including a common external tariff.
In economic terms, the main benefits and costs can be divided into:
Static or immediate gains - Trade flow effects; and
Dynamic gains over time - Competition and scale effects.
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