Customs trade deal yet to be revived
The Malawi-Mozambique-Tanzania-Zambia (MMTZ)— Southern African Customs Union (Sacu) is yet to be resolved, as the Sacu countries are not set to reopen discussions on the issue, government has said.
The MMTZ-Sacu trade agreement allowed countries such as Malawi to export textile and garments to the Sacu market comprising Botswana, Namibia, Lesotho, South Africa and Swaziland duty free.
Ministry of Trade and Industry spokesperson, Wiskes Nkombezi, said in an e-mailed response to a questionnaire that, among other reasons, the four countries were not ready to reopen negotiations on the issue.
“Sacu countries were not yet ready to reopen discussions on the issue because they felt MMTZ were supposed to have moved to the level where they can produce using the Southern Africa Development Community (Sadc) rules of origin regime for textiles which is double transformation.
“Furthermore, with regards to Malawi, Sacu countries were linking the extension to Malawi’s implementation of tariff phase down under the Sadc Trade Protocol. Since the country had lagged behind in reducing tariffs as agreed, Sacu thought Malawi just wanted to be free-riders,” said Nkombezi.
He was optimistic that with the new 2012/2013 fiscal budget, things might change since a commitment has been made to reduce tariffs.
For the past two years or so, the local textile industry has not created additional jobs, instead textile employees continued to lose jobs.
Experts in the industry have attributed this to the absence of the MMTZ-Sacu trade agreement. Over the past two years, government officials have been assuring the textile industry that they are in talks with Sacu for the extension of the trade deal, but nothing has happened.
Last year, deputy secretary general of the Textile, Garments, Leather and Security Services Workers Union (TGLSSWU) MacDonald Chuma feared that the local textile industry would collapse in the absence of a new deal.
“The MMTZ-Sacu trade agreement used to be a lifeline for the local textile industry. The industry was expanding because of the huge Sacu market. In the absence of the market for the past three years, about 4 000 jobs have been lost.
“We are just keeping our fingers crossed that something will be done, but the situation is bad. The companies cannot continue to keep people when there is nowhere to export the textile,” said Chuma.
The agreement was supposed to have ended in 2006, but has been extended for all these years waiting for the local industry to attain the double transformation regime in line with the Sadc trade protocol.
