Is SACU still viable for SD?
Thématique :
SADC
By Teetee Zwane, The Swazi Observer
As the Doha Development Agenda (DDA) negotiations continue, it would seem Swaziland has more contentious issues to deal with in terms of its membership in the Southern African Customs Union (SACU), trade experts say.
Under the World Trade Organisation (WTO), of which the country is a founding member, Swaziland is classified under small and vulnerable economies, which are allowed better flexibilities under some proposed trade modalities as compared to developed countries.
Trade Promotion Unit (TPU) Director Sizwe Ntshangase said the country was faced with a predicament because it cannot benefit from flexibilities allowed to small and vulnerable economies, which do not apply for customs unions.
"It now really becomes a question of choosing between revenue and trade," he said, during the last day of a two-day workshop on multilateral trade negotiation and regional integration, which was facilitated by the Common Market for Eastern and Southern Africa (COMESA) and the ministry of foreign affairs and trade at Timbali Lodge yesterday.
He added that while the country cannot afford to lose its SACU membership because of the benefits accrued from such, Swaziland still has to come up with a workable solution in this regard. The Kingdom currently receives most of its revenue from the SACU pool.
"The challenge now is on how to work our strategy within the customs union. We are trying to establish positions on both the DDA negotiations on agriculture and SACU," he added.
On the other hand, Ntshangase said Swaziland cannot leave SACU and at the same time, it cannot negotiate independent of the customs union as it was already committed as part of a group and not an individual country in this regard.
"So, do we stick to higher tariffs or reduce these in order to benefit, for instance, from resulting cheaper inputs in the longrun," he wondered.
Meanwhile, TPU's Lynette Gitonga added that the key issues for Swaziland in the DDA negotiations include agriculture and non-agriculture market access (NAMA) tariff negotiations, which were a contentious issue because the country belongs to a customs union with a significantly developed country, South Africa.
She said this leads to a predicament for the four vulnerable economies (other SACU member states), which was why a proposal on SACU (NAMA) tariffs had been made.
"Another issue involves the protection of special and sensitive products, on which the countries are indecisive with regard to what products should be classified as such," she added.
On elimination of subsidies, another issue under negotiation, she said Swaziland was also faced with a dilemma when it came to this. "Of course, it is a double-edged sword for Swaziland," she noted.
Gitonga said this was so because subsidies could also hurt a country, in terms of trying to develop its industries where it has to compete for markets with products from subsidised countries.
Another key issue she touched upon was on trade in services, which Gitonga said developed countries were arguing should not only be restricted to high skilled, but also low skilled workers.
Other key issues for the country, under the DDA negotiations, include the horizontal process, SACU proposal in NAMA, elimination of subsidies by developed countries, elimination of non-tariff barriers, preference erosion, trade facilitation, which comprises clearance of goods, goods in transit, transparency and needs assessments.
Others being trade in services request and offer processes (mode IV), flexibilities for small and vulnerable economies, increased aid for trade, special and differential treatment for developing countries.
As the Doha Development Agenda (DDA) negotiations continue, it would seem Swaziland has more contentious issues to deal with in terms of its membership in the Southern African Customs Union (SACU), trade experts say.
Under the World Trade Organisation (WTO), of which the country is a founding member, Swaziland is classified under small and vulnerable economies, which are allowed better flexibilities under some proposed trade modalities as compared to developed countries.
Trade Promotion Unit (TPU) Director Sizwe Ntshangase said the country was faced with a predicament because it cannot benefit from flexibilities allowed to small and vulnerable economies, which do not apply for customs unions.
"It now really becomes a question of choosing between revenue and trade," he said, during the last day of a two-day workshop on multilateral trade negotiation and regional integration, which was facilitated by the Common Market for Eastern and Southern Africa (COMESA) and the ministry of foreign affairs and trade at Timbali Lodge yesterday.
He added that while the country cannot afford to lose its SACU membership because of the benefits accrued from such, Swaziland still has to come up with a workable solution in this regard. The Kingdom currently receives most of its revenue from the SACU pool.
"The challenge now is on how to work our strategy within the customs union. We are trying to establish positions on both the DDA negotiations on agriculture and SACU," he added.
On the other hand, Ntshangase said Swaziland cannot leave SACU and at the same time, it cannot negotiate independent of the customs union as it was already committed as part of a group and not an individual country in this regard.
"So, do we stick to higher tariffs or reduce these in order to benefit, for instance, from resulting cheaper inputs in the longrun," he wondered.
Meanwhile, TPU's Lynette Gitonga added that the key issues for Swaziland in the DDA negotiations include agriculture and non-agriculture market access (NAMA) tariff negotiations, which were a contentious issue because the country belongs to a customs union with a significantly developed country, South Africa.
She said this leads to a predicament for the four vulnerable economies (other SACU member states), which was why a proposal on SACU (NAMA) tariffs had been made.
"Another issue involves the protection of special and sensitive products, on which the countries are indecisive with regard to what products should be classified as such," she added.
On elimination of subsidies, another issue under negotiation, she said Swaziland was also faced with a dilemma when it came to this. "Of course, it is a double-edged sword for Swaziland," she noted.
Gitonga said this was so because subsidies could also hurt a country, in terms of trying to develop its industries where it has to compete for markets with products from subsidised countries.
Another key issue she touched upon was on trade in services, which Gitonga said developed countries were arguing should not only be restricted to high skilled, but also low skilled workers.
Other key issues for the country, under the DDA negotiations, include the horizontal process, SACU proposal in NAMA, elimination of subsidies by developed countries, elimination of non-tariff barriers, preference erosion, trade facilitation, which comprises clearance of goods, goods in transit, transparency and needs assessments.
Others being trade in services request and offer processes (mode IV), flexibilities for small and vulnerable economies, increased aid for trade, special and differential treatment for developing countries.
