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Polity
Published: 17 Aug 2007
SA: Mbeki: Post SADC Summit media briefing (17/08/2007)
Date: 17/08/2007
Source: The Presidency
Title: SA: Mbeki: Post SADC Summit media briefingPost SADC media briefing by President Thabo Mbeki

President Mbeki: This is an ordinary SADC Summit. Its focus was discussed at the Maseru Summit last year.

Economic integration

There was a concern about the rate of progress that the region is making with regard to the challenge of integration. It was decided, because of that concern, there would be an extraordinary summit of SADC in between the ordinary summits. That Summit was held, as you remember, at Gallagher Estate, at home, in October last year, focusing particularly on economic integration. In that context it addressed the program that had been agreed, starting with the establishment of a SADC free trade area by 2008; proceeding to the formation of a customs union by 2010; proceeding to a common market by 2015.

So, the extraordinary summit last year at Gallagher Estate tried to look quite intensively at whether, in fact, we would be able to meet these targets that we have set ourselves. Arising out of that extraordinary summit, the matter was referred back a ministerial committee, to look at it again so that we could take some decisions now. As you have heard, this summit has now confirmed that we must proceed with the free trade area by 2008. It has shifted the date by some months, so that the agreement is that we should have this free trade area declared when the SADC ordinary summit meets next, which is August next year, a year from now.

You know what a free-trade area is. It means that there will be no tariffs that will apply to products originating within the region and traded within the region. So, that becomes a free trade area. That is a very important step. It is a very challenging step. What makes it particularly challenging is, of course, the strength of the South African economy. Where you remove all tariffs within a free trade area, South African goods can enter any of the SADC markets tariff free, in the same way that all goods in the SADC area can enter the South African market tariff free.

So, the particular challenge is the strength of the South African economy, because where you no longer have the possibility of protecting your domestic industry by way of tariffs, then indeed, you could have serious challenges facing industry within SADC. This is why this decision is very important. But you could not address the issue of integration within the region without addressing that matter.

So, all of the countries have made commitments that, indeed, by the time we get to August next year, everybody would have come to this position where we have within the SADC area, tariff-free trade. It is still going to require a lot of work, because some countries will have to reduce tariffs by between 50% and 60% in the period that is left. But everybody has made a commitment: let's indeed, by August 2008, have arrived at a situation where we can indeed declare this free trade area.

There was a related discussion that took place, which is about infrastructure development, infrastructure of all sorts. The SADC secretariat has been working with the New Partnership for Africa's Development (NEPAD) secretariat on this matter. Because, of course, free trade within the SADC area presumes the possibility to conduct trade, transport, customs arrangements, requiring infrastructure of all sorts. And, indeed, a whole variety of infrastructure projects have been identified, which would facilitate this movement of goods within the region.

That is the second important decision that was taken. What must then happen is that we must look at all of these infrastructure development projects, which have got to do with roads; have got to do with ports and harbours; have got to do with railways; they have got to do with the telecommunications network, to ensure that those projects are aligned with national programs.

They are regional but they impact on country programs. For instance, the one that I am sure everybody is familiar with concerns the issue of energy. It is an old agreement that we should develop hydro electrical generation from the Inga falls in the Democratic Republic of Congo, to help to address the energy challenge in the region as a whole. That is agreed. But the generating plant will be in the Democratic Republic of Congo. So, the region needs to talk in detail with the Congolese government about that project. That is what I mean by making sure that you deal with these regional infrastructure projects and relate them to national programs.

So, this second important thing is related to the creation of free trade area, customs union, and so on.

With regard to the customs union, its particular feature is that the countries within SADC would have one tariff system with regard to the rest of the world. So, it does not matter through which country any particular product entered, the same tariff will be charged. That will have its own particular challenges, like the free trade area. One of the matters that arises is that part of state revenues are collected from customs and excise. So when you drop tariffs within the SADC region in terms of the free trade area, you have got to look at the question of how you compensate for the losses in revenue that will result. The same applies with regard to the establishment of this common customs area because, again, with regard to goods that are entering the customs union area, where the customs have been reduced and they are the same everywhere, you might very well have revenue losses which have an impact on budgets.

I am trying to indicate the complexity of the matter, but it is critically important, before I talk about regional integration. You cannot avoid addressing these matters.

Now with the customs union it was agreed that our ministers would meet in October to look at the matter. We have set 2010 as the date for the customs union to come into effect. We will be able to do it. We need to know, what will be the consequences, all round, of all sorts, so that we should be able by the next SADC summit, to confirm on the basis of a practical understanding of the implications, the date for the customs union. So that as the free trade area comes into effect a year hence, we should at that point be able to say: we will be able to have a customs union two years later, with all the implications of that. As well, of course, as I was saying, you have to deal with this matter of the regional infrastructure which facilitates that integration.

The principal outcome of this is a very important step forward, addressing this matter of regional integration. There are some other elements to it, which are necessarily associated with it, issues like trade facilitation, common industrial policies and that kind of thing.

Launch of the SADC Brigade

A further major thing, which is really a culmination of work that has been going on for a very long time, was the launch of the SADC Brigade.

You saw units from 11 different armies and police forces and so on, which were able, as you could see in a physical sense, to march to one step and drill together. It has taken a long time to prepare that Brigade, but it is there now.

I think it is a very strong indication of the progress the region is making towards, not just economic integration but integration in other respects. In fact, as far as I know, it is the first of the Continental brigades that are required by decision of the African Union to form the all-African standby force. It is a very, very important step forward. Today's launch of the Brigade was the culmination of work that has been going on for quite a long time.

DRC, Lesotho and Zimbabwe

At a summit of the organ of SADC on politics, defence and so on, in March this year, three things were discussed.

One was the situation, as it was then, in the Democratic Republic of Congo, relating to conflict that had taken place in Kinshasa involving one of the former vice-presidents of the Congo, Juan Pierre Bemba, who, as you remember, ended up staying in a South African diplomatic compound and then left for Portugal. That summit in Dar es Salaam in March discussed the Congo and took certain positions. But the situation in the Congo has normalised now.

It also discussed the political situation in Lesotho after the Lesotho elections. Some work has been done with regard to that and in the end President Ketumile Masire was appointed as the SADC envoy to deal with the Lesotho matter, which he has been doing. But there are two court cases that the opposition parties have taken to the Lesotho courts concerning the elections and so it was agreed that, since there was these judicial processes, the mediation process would have to be put on hold to allow for the court cases to be resolved and then the mediation would continue. That is where the matter of Lesotho is, which was also discussed in Dar es Salaam in March.

The third matter that was discussed in Dar es Salaam in March was, of course, Zimbabwe, and there were two elements to it.

One of them, as you know, was that we should facilitate discussions between the government, Zanu-PF, on one side and the MDC on the other. So we reported, as directed, to the troika of the SADC organ on politics, defence and so on. We reported to the SADC troika about those discussions and the SADC troika reported to the full summit, essentially to say, this is work in progress. The delegations have been meeting, government and the MDC, on the basis of an agenda that they agreed among themselves. They are continuing to talk among themselves. They are making progress in those discussions and as soon as we have an outcome of that process we will, of course, report to the new Chair of the SADC organ on politics, that is President Dos Santos of Angola. And I would imagine he would probably want to convene a summit of everybody to give a report of that outcome.

But it really is a report of work in progress. As I am sure you heard in the statement, the SADC summit just urged everybody to continue to speed up that process, because like the Zimbabweans, everybody is interested that when the presidential and parliamentary elections take place in March next year in Zimbabwe, they should be held in an atmosphere that would result in free and fair elections without controversies.

With regard to the economic part of that decision, the Dar es Salaam March meeting asked the SADC secretariat to look at the Zimbabwean economy to see in what ways the SADC region can assist Zimbabwe in its economic recovery. The SADC secretariat did that, sent in a team, went in and out of Zimbabwe and spoke to everybody, absolutely everybody, government, business, and labour, to get to a proper sense of what is happening and prepared a report.

It was agreed that that report should be looked at in greater detail by the finance ministers and I am sure that they are going to require the support of other ministers of the region. They will look at that report, as prepared by the SADC secretariat, and liaise and discuss with the Zimbabwe government, in order to pin down in some detail what the region can do with regard to that process of economic recovery. That committee of ministers will no doubt do that, and, as on the political side, they will report to the Chair of the SADC organ on politics and take the matter from there.

So, those are basically the political issues, really a report of work in progress.

But the military one was the conclusion of work that has been going on and the economic one involved some commitments on economic integration, which is also going to require quite a lot of work.

So our own view is that the summit did address the matters it needed to address and, indeed, it has gone very well.

Ms Nkosazana Dlamini Zuma, Minister of Foreign Affairs: There was also one component of strengthening SADC itself to mention. There is going to be a meeting of the Council in October to discuss how to strengthen SADC. There was a study done on all the jobs of SADC, a report will come in October, in an effort to strengthen the capacity of SADC to be able to do all the things that the President has been talking about. That is all I want to add.

Zimbabwe facilitation

Independent Newspapers: This recovery plan for Zimbabwe, will there, will conditions be attached to the plan? Will it be linked to your liaison efforts?

President Mbeki: No, they are not linked in that sense. What the SADC summit said in Dar es Salaam was that there are two major groups of problems in Zimbabwe: political problems, let's deal with them like this; economic problems, let's deal with them like this. It was looking for a global solution to address all of the challenges facing Zimbabwe. Nobody is talking about conditionalities about anything; rather that there are problems that need to be addressed, economic and political, so let us address them. That is all. Nobody has said that there should be conditionalities attached to finding solutions. Solutions must be found and that is all.

Sunday Times: Are there deadlines, Mr President, on the issue of the facilitation that you are undertaking and also on the issue of the economic side of things? That by a specific date, you should have moved thus far.

On the issue of trade, Mr President, I want to check, one of the challenges that might arise on the free trade issue could be the issue of trade diversion, because South Africa obviously also imports goods from Europe, which find themselves also in the other SADC countries. How do you deal with that? And also the question of the current negotiations of the EU partnership, the development partnership, that are going on inside of that.

President Mbeki: As I have said with regard to the political negotiations, and again, I hope you heard the communiqué at the end which said that everybody, SADC and the Zimbabweans, we are all concerned that when the parliamentary and presidential elections take place next year in March, by that time, all of these matters that are subject to negotiation among the Zimbabweans, with our facilitation, would have been resolved. That is what the Zimbabweans themselves are saying.

So you have to deal with all of those matters in a manner that would make that positive impact on those elections. Any deadlines that would be set, would be deadlines that are set by the process. There is nobody who is saying that everything must be concluded by the 31st of August. It is that process that would determine what happens.

With regard to the economic ones, there is urgency. Everybody insisted that there is an urgency for us to get into this matter and that the finance ministers would engage this matter immediately. I think we have to await their work, because the aim is not to describe what is happening in Zimbabwe. The aim is to elaborate measures that can be taken to help to correct the situation.

So, no. It was not said that by Tuesday have a result, rather that the ministers must engage in these matters immediately with a view to seeing what it is that can be done as quickly as possible. I am sure that everybody would want to address the matter with the necessary urgency.

SADC economic integration

With regard to these trade diversion matters, everybody in the region imports something from somewhere. In this customs union, for instance, we import things from all countries and we are one customs union, the Southern African Customs Union and collect customs according to an agreed formula and distribute the revenues from what has been collected as a result of those customs.

So, one of the matters that are very central to these free trade areas and all that, is this issue of rules of origin. It would apply in this area also. It is a matter that is under discussion and, indeed, it was decided now that we need to refine and simplify the formula that we have currently with regard to rules of origin, so that it is simpler and easier to implement. That is what is used to determine what product actually originates from within the region. It is not everything that is traded in the region that would have duty-free status.

If there are products that clearly, in terms of those rules of origin, originate from outside of the region, rather than being produced and manufactured in the region, of course a different tariff would apply. So the rules of origin would deal with the matter of whatever comes into the region. If you make a shed somewhere in the world and then bring it to South Africa and then just stick a label, "Made in South Africa", whereas it has been made somewhere else, the rules of origin would deal with that, indicating that the shed is actually not made here, that it has a false label saying, "Made in South Africa". You would deal with matters of that nature in that way.

Zimbabwe facilitation

City Press: Civil society groups, say that with regards to the talks that are taking place, they would have liked the talks to include them as well, because they can make a contribution to dealing with the situation in Zimbabwe. Do you think yourself that broadening the talks would enhance the talks?

President Mbeki: We have discussed that matter with Zimbabwean civil society. And our view was that these negotiations, like everywhere else, would be negotiations between the political parties in Zimbabwe, as reflected, for instance, in the Zimbabwe parliament.

But we said to the organisations of civil society that we, as facilitator, would keep in contact with them and engage them and make certain that matters that they would want to raise would also be dealt with in the negotiation process. You know that we then had a meeting with them. They came to South Africa, the Zimbabwe civil society organisations, and had a meeting with us on Tuesday this week as part of that process. We engaged them, gave them an account of what is happening in the process, listened to what they have to raise, and in reality, the matters that they raised, which they thought should be dealt with in the negotiations were matters that were already on the agenda of the negotiations.

So they have agreed that we should proceed in the way that we had proposed; that we continue to engage them; that negotiations will go on and that we will keep them informed; that they will feed into the facilitator who will feed into the negotiations and that on that basis, they will support the negotiations. So that particular matter which, you are right, had been raised by them in the past, that they wanted to be sitting around the negotiation table, we have discussed and we have sorted that out. The formula that is used is the formula that was used now on Tuesday when they were in South Africa.