Tuesday, December 16, 2008

Two more years for SD in COMESA markets

By FAITH SHONGWE [Times of Swaziland Sunday] December 09,2008

MBABANE – Swaziland has successfully negotiated for a two-year extension of the special provision under which she exports to the Common Market for Eastern and Southern Africa (COMESA).

Swaziland has been enjoying this special provision for over 10 years and it was meant to expire yesterday.

However, the country has successfully negotiated with the Southern African Customs Union (SACU) for permission to negotiate for the special provision with COMESA. Swaziland’s trade with COMESA would have been difficult if SACU had not agreed.

The seeking of SACU’s go-ahead is in compliance with Article 31, which states that a member state cannot negotiate with a third party; the approach is to move as a bloc rather than individually unless the permission is granted.

Swaziland has not implemented the COMESA Free Trade Area (FTA). COMESA is implementing a FTA and some countries in COMESA are implementing the FTA while others are not. Swaziland does, however, benefit from the FTA through a special provision known as derogation.

Minister of Foreign Affairs Lutfo Dlamini said COMESA had agreed to extend the derogation for two more years, effective January 2009.

"The derogation is not an issue anymore because of the two-year extension. We would like to thank SACU for the role they played in achieving this goal," Dlamini said.

Swaziland is a traditional member of the Southern African Customs Union (SACU). However, the rules of the World Trade Organisation (WTO) do not allow a country to be a member of two customs unions.

This means, therefore, that Swaziland will ultimately have to align with one customs union between SACU and COMESA.

In a recent report the Director of Trade Promotion Unit, Sizwe Ntshangase, said, "The launch of the COMESA Customs Union will be followed by a transition period for the full implementation of the union. In a nutshell, Swaziland will continue to trade in SACU and COMESA, as long as it is technically possible to do so," he said, deciding not to divulge whether or not government had taken a stand with regards to which customs union to align with.

He, however, mentioned that both were important markets for Swaziland.

"Our approach is that every preferential market for Swaziland is valuable and hence it should be preserved and maintained at all costs. Therefore, as much as most of our companies in Swaziland do business with South Africa (and hence SACU), whatever trade with COMESA is equally important.

"This is especially true for a country that is trying to broaden its market base," he said.

The Southern African Development Community (SADC), of which Swaziland is also a member of, is also working towards a customs union by 2010.