Transcript Copy: Briefing to the Media on the SADC Summit by Trade and Industry Minister Mandisi Mpahlwa and Deputy Foreign Minister Aziz Pahad, 12 August 2008, Union Buildings, Pretoria
Minister Mandisi Mpahlwa
One of the key milestones for the 2008 SADC Summit is the launch of the SADC Free Trade Area. The adoption of the 1996 Maseru Trade Protocol, which entered into force in January 2000, paved a way for the launch of the FTA. SADC member states commenced with the implementation of the Trade Protocol in September 2000. One of the objectives of the Trade Protocol was to establish a Free Trade Area over a period of eight years.
The SADC Free Trade Area has been notified to the WTO and examination was done during the meeting of the WTO Committee on Regional Trade Agreements held in May 2007 in Geneva. A Factual Presentation on the Protocol prepared by the WTO Secretariat was considered by the committee on Regional Trade Agreements after which the Committee expressed satisfaction with the presentation and the Chairman declared that consideration of the Protocol was duly finalised and therefore completing the notification process.
An Audit Study conducted in 2007/8 on the implementation of the Trade Protocol concluded that although some countries are experiencing problems in implementing their tariff phase down commitments, the region as a whole has nevertheless achieved liberalization of 85% of intra-SADC trade as of January 2008 and therefore meeting the WTO requirement that substantially all trade among countries in a trade block be duty free. SADC is therefore on target to achieving the overall objectives of 85 % of all intra-SADC trade at zero tariffs by 2008 and the remaining 15% to be liberalized fully by 2012.
However, we need to recognize that regional economic integration is not only about the removal of tariff barriers in our region. The launch of the FTA is not an end in itself but a beginning of a process we need to embark on to build both our productive and trade capacity, improve competitiveness of our industries and address the supply –side constraints that inhibit us form benefiting to better terms of trade in the region. We need to focus on expanding our agriculture and industrial base to promote intra-regional trade. A strong industrial drive is essential in promoting structural diversification of our economies.
More work first needs to be done to consolidate the FTA and make it work by addressing non tariff barriers, including trade facilitation measures, harmonising industrial and competition policies and liberalise trade in service. The focus going forward should be on addressing the real economic constraints that hinder deeper integration in our region.
Infrastructure development is also an essential element for creating conditions that would advance the integration agenda and would have to be prioritised. It is my strong belief that the private sector has a key role to play, especially in the area of regional infrastructure. This is an area that needs attention to ensure that we expand markets; improve market access; and integrate national and regional markets. The lack of regional infrastructure is a major barrier to regional integration and development.
However, the concern remains about the potential impact of the outcomes of the Economic Partnership Agreements with the European Union which is likely to derail our integration efforts. All SADC countries are participating in EPAs with the EU, but in four separate configurations. All these EPAs differ in terms of having different tariff liberalization obligations to the EU. This will complicate the process of establishing a SADC Customs Union especially agreeing on a Common External Tariff. We therefore, need to re-evaluate our priorities given the challenges and endeavour to find practical solutions to deepen SADC integration.
The Summit will discuss among other issues the Regional Poverty Reduction Framework, an implementation plan has been developed and emanates from the SADC International Conference on Poverty and Development.
The Ministers responsible for energy have adopted the Power Sector Investment roadmap with the aim of overcoming the diminished power surplus capacity in the region. The heads of State will thus consider the roadmap.
Food security is also among the critical challenges facing not only the region but a global phenomenon. The Summit will reflect on the food security situation in the region.
The following draft protocols will be considered, draft protocol on gender and development and the draft protocol on science, technology and innovation among others.
As the incoming Chair of SADC, South Africa’s strategy will rest on three pillars namely:
- Deepening regional economic integration
- Intensifying regional infrastructure development
- Restoring and strengthening the political unity and cohesion
One of the things I would like to add is that you would recall that the Maseru Summit of the Heads of State did, precisely for reasons of recognising the need to have a greater focus on deepening our regional integration, establish a Ministerial Task Force on regional integration.
This is Task Force that consists of Ministers of Trade, of Finance, Investment and Economic Development from the region. This is a Task Force that has been working. It is one of the reasons why we were able to bring this greater focus even on ensuring that we indeed launch the Free Trade Area in 2008 as we had intended. Ofcourse the regional date was planned to be 1 January 2008 but it was then decided that we’d do this during the Summit.
The other important remit of this Task Force has been the issue of a road map towards a Customs Union for our region. And so this is one of the reports that will be considered by the Summit.
This is a very important part of our work because our regional indicative strategic development programme has got 2008 as the target date for the Free Trade Area and 2010 as the date for the Customs Union. Those dates remain. They are the basis for the work that we are doing. The importance of this work on the road map is that it is through an examination of such a road map that you can truly assess the ability of the region to achieve that Customs Union by 2010. This is one of the reports that will be submitted at the Summit. This is a Task Force that reports directly to the Heads of State because it was established as a special vehicle to do this work of looking at deepening regional integration.
Deputy Minister Pahad
The Minister has quite sufficiently covered the importance of this SADC Summit. Let me just add a few things. As you are aware, SADC is the primary vehicle for South Africa’s foreign policy to achieve regional development and integration within Southern Africa.
As the Minister has indicated, we do this because we are quite convinced that South Africa’s future is inextricably linked to the future of the African continent and indeed, more specifically, to our neighbours in Southern Africa.
This is an opportune time because the AU Summit in Sharm El Sheik a few months ago took the decision to accelerate the processes of the formation of an African Government which will lead to the United States of Africa. But also decided that this must be a process and that the RECs, the Regional Economic blocks of which SADC is one, are important building blocks to lead to an African Government.
At this Summit we have to, as the Minister has indicated, launch the Free Trade Area, look at the possibilities of moving according to the time-frames of the 2010 Customs Union, and in the context of that see how we can accelerate SADC integration processes to help us reach the stage when we can move towards an African Government, which will eventually lead to the United States of Africa.
This is vital because we have been, over the past few years, going into discussions on whether we should immediately establish the African Government or whether we should develop on the building blocks. We can’t continue to argue as South Africa that the regional building blocks are essential unless we take some major decisions, as the Minister has indicated, at this Summit to ensure that SADC does become an effective building block.
The formal launch of the Free Trade Area is scheduled to take place on SADC Day, 17 August, from 11h00 to 13h00, and this will be an open session.
Given the many challenges we face, there’s going to be a new innovation at this Summit. This is because of the many challenges that we face including the rise in oil and food prices, the impact of the European Union-Africa Caribbean discussion and the Economic Partnership Agreements and its impact on integration, as the Minister has hinted. All demands that we give an opportunity to the Heads of State to go to a retreat. And so, on the afternoon of 16 August the Heads of State will move out of the formal meetings with all the officials and go to a retreat where they will be able to have a better environment to engage openly and frankly on all the key issues that we are facing in the region.
An important element will be the report by the Chairperson of the Organ on Politics, Defence and Security, and that’s Angola. Many of the issues that will be tackled during this report will be issues of peace and stability; the post-conflict reconstruction in the DRC, the successes with that as well as the situation in the East; developments in Lesotho since the intervention of SADC; developments in Malawi since the intervention of SADC, and ofcourse the talks are still progressing in Zimbabwe, it is expected that there will be a report by the Organ Chairperson on Zimbabwe. Another item on the agenda is the recent attacks on foreigners that took place in South Africa in order to give a better understanding of how we have tried to deal with that.
Other issues that will be dealt with under this Organ will be illegal immigration, terrorism, the phenomenon of mercenaries, the energy crisis, the food crisis, disaster management and mitigation, the challenges resulting from the hosting of the 2010 World Cup, the progress re the operationalisation of the SADC Brigade, SADC member states’ involvement in peacekeeping operations. It is quite impressive how many SADC states are involved in UN and AU peacekeeping missions throughout the world. Finally, the progress we are making in the early-warning system which will enable us to deal with conflicts before they happen.
It is quite an extensive agenda. The Ministerial meeting on integration will take place tomorrow (Wednesday 13 August). The Council of Ministers will meet on Thursday and Friday and the Heads of State will meet on Saturday and Sunday.
We do believe that out of this Summit and under our Chairpersonship we must ensure that we are able to take the processes of integration to a much higher level, staring with the Free Trade Area and then moving much faster integrating our economies, the free movement of people, better movement of goods and services in order for us to make sure that SADC does become the powerful institution it can be and has to be.
It is clear that a successful SADC regional economic bloc will make a major impact on other regional economies in Africa. And therefore we will be able to take a much quicker step forward in meeting the Millennium Development Goals by 2015.
We do hope that when you come to the launch of the FTA you will get further information on initiatives we will be taking during our Chairpersonship in order to accelerate the process of development in SADC and in the African continent.
QUESTIONS AND ANSWERS
Question: We have heard Botswana threatening to boycott the Summit if Robert Mugabe attends. Has South Africa invited Robert Mugabe and in what capacity has he been invited to this Summit?
Answer: (DM Pahad) South Africa does not invite any country. Zimbabwe is one of the 14 members of SADC and the Secretariat would have invited all the members of SADC.
The question of who is going to come and who is not going to come, we don’t know. The talks are continuing in Zimbabwe. We have no indication of what the problems are or what progress is being made. I suspect that long before we get to Summit there will be some decisions coming out of Zimbabwe which will then influence everything else.
Question: Minister Pahad, there was a two week deadline given on the Zimbabwe talks, was there an expectation that come the SADC meeting there would have been a deal sealed?
Answer: Deputy Minister Pahad - No. As you know, the Memorandum of Understanding was signed between the Government and the two MDC factions. In that Memorandum it was hoped that all the discussions would be completed within two weeks. These are just time-frames you worked towards.
Clearly there are some issues that still have to be resolved. They adjourned yesterday because of the Heroes Day celebrations during the day. They met late last and will start the talks today.
This thing was not planned in preparation to get some result before the summit. It is just coincidental that things moved as they moved and it just coincided with the SADC Summit.
Of course SADC would want to get a response from the Facilitation. President Mbeki is facilitating on behalf of SADC. They will expect some response. We are all praying and hoping it will be a positive response, which will then help us to move more decisively into doing what we have to do, such as dealing with the economic integration, dealing with poverty and under-development, dealing with all the challenges that we have identified. We hope that there will positive results coming out of the talks.
Minister Mpahlwa – I think it’s important to emphasise a point or two in this regard. As South Africa the host but also as a SADC Community we all have interest that all member states attend the Summit.
I think the thing that should enjoy our central focus is the fact that the parties are talking at the highest level. That is very significant. You can see that there is a momentum that has been generated in this process. It was difficult to get the first meeting. But when it did take place, you could actually see that there is this one image of all the leaders arriving for talks.
As South Africans we should celebrate the fact that the persistence of the President as facilitator, inspite of all the criticism and the negativity around it, has got the parties in Zimbabwe to the point where they are actually talking.
Our President has consistently said that as Facilitator he can only do so much, it is the parties to the conflict that will really resolve that issue. We are at that point now where the parties are talking. I would imagine that a matter such as this would be one of the matters that would be discussed because traditionally, when SADC Summits convene the Facilitator gives reports to the other Heads of State about progress on the Zimbabwe issue. I expect the same thing to happen. Therefore, I would think that that would be one of the matters that would be a subject of some reflection.
Question: Would it be right to say that the talks in Zimbabwe are working against a deadline of producing something in time for the Summit? What level of observation will there be at the Summit, the donor community that is vital for the rescue plan for Zimbabwe? Are they going to be at the Summit? Are they abreast of what is happening, better than we are?
Answer: Deputy Minister Pahad - There is reference group comprising of the United Nations, the AU and SADC. So through those channels everybody gets briefed about progress being made.
We have tried both of us to hint at this, that some report has to be given to Summit, because President Mbeki is acting on behalf of SADC Organ which therefore has to report to SADC Summit.
I don’t think that we should try to determine whether there will be results or not. If they are successful outcomes, that would be a plus. If there is still more time needed for more consultations that shouldn’t lead us to despair. It just means that they are still talking. The fact that the parties are continuing to talk is a positive aspect. And we should stick to that as the Minister was hinting; try to encourage them to continue talking until they find a solution that is in the interest of the Zimbabwean people.
Question: Can Minister Mpahlwa explain how Zimbabwe with its economic meltdown will fit into the Free Trade Area particularly the Customs Union.
Answer: Minister Mpahlwa – One of the things that will happen when the Free Trade Area is launched will be that information will be provided by the Secretariat on the state of affairs in so far as achieving a Free Trade Area. That report, because countries in terms of this trade protocol make commitments of a tariff phase-down. A country makes a tariff offer which says that this is the schedule of a phasing down of tariffs towards achieving substantially all trade within the region being duty free.
And so, with respect to each of the countries a report will provide information about how each of the countries fares in terms of those offers that have been made and the schedule of tariff commitments.
One of the realities of this is that countries sit at different positions in relation to this tariff phase downs. Some countries front-loaded this – South Africa has basically opened up. But some countries have back-loaded, while others have taken a more gradualistic approach. That information will be provided.
I think that you would recall that over time in the African continent Zimbabwe has been South Africa’s leading trading partner. In global terms actually Zimbabwe for a long time was the 13th largest trading partner of South Africa. That must say something about the participation of Zimbabwe in trade within the region.
The exact information and figures and the exact stage Zimbabwe is at in terms of its own commitments and tariffs phase-down, that information will be provided at the right time.
Question: Will SADC be putting any pressure on the Swazi monarch to hold democratic elections?
Answer: There are processes under way in Swaziland which have been going on for some time through SADC and through the Commonwealth to try to see how we can assist Swaziland move towards a more multi-party democracy. This is work in progress and we will continue through SADC and bilaterally assist Swaziland to move in that direction. It is work in progress, mainly driven by the Commonwealth but also involving SADC.
Question: Minister Alec Erwin has been referring all questions about the arms deal to the Department of Trade and Industry. I would just like to know, is the serious fraud office investigations into the DAE contracts with South Africa still going ahead?
Answer: Minister Mpahlwa – I don’t know if that has anything to do with the SADC Summit and the launch of the Free Trade Area. The advice that I would give you is that perhaps we should consider an appropriate forum to talk about issues of the offset programme which the Department of Trade and Industry has been managing.
The information about the work the Department of Trade and Industry is doing is available. There is a series of Annual Reports that have been tabled every year in parliament. If we need to engage on this we should consider the appropriate forum.
Question: Minister, just a practical one. In the absence of the Zambian president Mwanawasa, any news on who will act on his behalf in handing over the Chair and all the things at the Summit?
Answer: Deputy Minister Pahad - South Africa will be the Chair. I assume the vice president will represent Zambia, including the Foreign Minister and the Trade Minister who will come for the integration meeting tomorrow. They will be represented at the highest level.
Issued by the Department of Foreign Affairs
Private Bag X152
12 August 2008