Category : Trade Agreement
The Guide to exporting to the Southern African Development Community (SADC) is part of the International Economics Consulting’s work with the United Nations Development Programme (UNDP) and Ministry of Investment, Trade and Industry (MITI) of Botswana. The guide comprises two major sections. The first section aims to demystify rules contained in the SADC’s Protocol on Trade in terms digestible by exporters, as well as pinpointing the untapped potential opportunities in the SADC market for the private sector in Botswana. The second section lays out the requirements and sources of information to the realization of the potential product exports to the SADC market.
SADC-Botswana Bilateral trade
With a consumer base of 350 million people, the SADC represents a large market for Botswana exporters to tap into. Being a member of SADC and party to the SADC Free Trade Area, Botswana enjoys duty-free access to the SADC region. South Africa and Namibia are the region’s key markets for Botswana. In 2019, South Africa had a share of 9.6% (USD 503 million) of Botswana’s total exports, followed by Namibia with a share of 3% (USD 159 million). Botswana’s exports to SADC however have fallen over the last decade. Diamonds dominated Botswana’s export basket to the region, which accounts for 47% of the exports to SADC, followed by is electrical machinery and mechanical machinery. Besides precious stones, SADC holds immense potential for Botswana’s exports, especially for the Light Manufacturing sector, with untapped potential of around USD 53 million.
The SADC’s Protocol on Trade
The SADC’s Protocol on Trade, signed in 1996 and amended in 2010, is one of the most important legal instruments guiding SADC’s work on Trade. It formed the basis for the establishment of the SADC free trade area, which was effectively launched in August 2008, allowing about 85 % of intra-SADC goods trade flows to obtain the duty-free status (Category A and Category B products). Meanwhile, product exclusions (categories C), although small, remain substantial for some countries, and include such products as prepared foodstuffs, animals and animals’ products, textiles and clothing, and sugar, among others.
The SADC’s Protocol on Trade Rules of Origin (RoO) encourages intra-regional trade and deeper regional integration. This is evidenced in the overarching regional cumulation rules, whereby all Member States shall be considered as one territory for the purpose of determining the origins of a product.
The Protocol also lays out rules on Technical barriers to trade (TBT) and Sanitary and Phyto-Sanitary (SPS) measures for the protection of life, health, environment, and prevention of deceptive practices. With regards to TBT, the Protocol encourages the SADC Member States to implement mutual recognition and to adopt international standards whenever technical regulations are considered necessary. With regards to SPS measures, the Protocol requires Member States to adopt SPS measures based on international standards, guidelines, and recommendations, as well as having them supported by scientific basis. Each SADC Member State has a point of inquiry to provides information on TBT/SPS measures, a list of which is included in the guide.
The Protocol foresees the application of safeguards measures as a ‘safety valve’ in recognition of the possible hardship caused to a country’s economic sector as a result of trade liberalisation. The agreement reiterates the commitments made at the international level – World Trade Organisation. Specifically, this applies to the application of anti-dumping and safeguard measures. Safeguards to protect the infant industry are also foreseen.
The way forward
The guide was prepared to add momentum towards Botswana’s trade promotion initiatives by enhancing the business community’s understanding of trade opportunities through the SADC’s Protocol on Trade. While the guide has not been able to cover all possibly traded products, it provides a methodological approach in manageable steps so that trade public officials and private sectors can replicate in evaluating the trade potential and accessing reliable sources of information to strengthen their preparedness for exporting to the SADC market under the SADC Protocol on Trade.
The Guide has been published by the UNDP and MITI of Botswana.