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Motlanthe warns on free trade area

15th November 2011

By: Sapa

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The establishment of a free trade area in Southern Africa is best not done abruptly, Deputy President Kgalema Motlanthe warned on Tuesday.

Responding to questions in the National Council of Provinces, he noted that discussions had commenced within the Southern African Development Community on the establishment of a free trade area.

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"But by merely and simply establishing a free trade area and therefore curtailing the existence of Sacu [the Southern African Customs Union] would no doubt squeeze the life out of some [member] countries."

Motlanthe said several Sacu members depended on their share of the revenue generated by the customs union for their survival.

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"In fact, some of them survive because 60% of their earnings come from the Sacu revenue. So if you closed that facility abruptly, you'd cause problems."

He said any transition should take place in a "phased" way.

"The options of establishing a free trade area in a phased way might be more prudent and advisable."

South Africa could only benefit from having neighbours with strong, thriving economies. If neighbouring states had mineral deposits or other resources that needed developing, it was in South Africa's interests to "inspire" such development.

"In the long term, it is in our interests to ensure that these countries do develop... and not in [our] best interests to take a simple, selfish, inward-looking approach," Motlanthe said.

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