Intra-SADC Trade Performance Review 2007: (FULL DOCUMENT)

Year of publication: 
2007
Publication image
The Southern Africa Trade Performance Review 2007 builds on the work of the previous two editions of the Review to further map the trade flows of countries in the region, as well as assess their trade performance, with particular reference to intra-regional trade.

This year, the Review has further strengthened the policy insight perspectives provided in the analysis by in-country reviewers, as well as giving a more focused perspective on specific industries of interest. Whilst a smaller sub-set of SADC member countries has been selected in this edition, this analysis has been complemented by the introduction of a new facet to the Review.

To broaden the policy perspectives of the region, two key themes of particular interest to the region are presented in a critical fashion by prominent experts in these fields. With the phase-out of the Cotonou and introduction of Economic Partnership Agreements, all SADC member states have been trying to assess which configurations would be most suitable to them. Chris Stevens of the International Economic Development Group at the Overseas Development Institute (ODI) tries to shed some light on this burning issue, whilst Gregory Mthembu-Salter, an independent researcher and consultant, tackles non-tariff barriers, another crucial issue for trade in the region.  

Overview:
The structure of trade in SADC has not changed much since the community's formation in 1992 – primarily because the structure of the SADC economy has remained unchanged. Most of the SADC members' economies are not diversified and many depend overwhelmingly on a single sector, limiting their ability to resist shocks that impact on their economies.

During the period under review, trade in primary goods continued to be a significant trade trend in the region. In addition, many of the SADC members failed to develop those manufacturing segments that suited their internal needs and they neglected their technological base. As such, the trade deficit of most SADC countries widened as value-added imports from developed countries increased.
 
Very little intra-SADC trade occurred over the review period. Countries traded mostly with the rest of the world, which limited intra-regional trade. Further, while incomes have grown in relation to African and regional standards, 'consumers' in SADC appeared to prefer more technologically advanced, imported goods. To stimulate intra-regional trade, supply-side constraints will have to be addressed.

In terms of trade agreements with other countries and regions, SADC members should forge agreements with partners that are determined by economic principles rather than by political motives. If SADC prioritises the latter rather than the former, consumer welfare will be compromised as a result of trade diversion.
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Trade Performance Reviews