African Union or Not?

African union or not?

By

Anja Schoeman

2010

TABLE OF CONTENTS

1. INTRODUCTION 1

2. THE PROBLEM 1

3. THE FREE TRADE AGREEMENT 3

4. THE POSSIBILITIES 6

5. THE DRAWBACKS 7

6. POLICY ADJUSTMENTS 8

7. CONCLUSION 9

REFERENCES 10

LIST OF TABLES

Table 1.1: BAT Factory Supply to SAA Markets 2

Table 3.1: Economic Indicators of SADC Member States 3

1. INTRODUCTION

In a global world goods and services should ideally be flowing freely between borders of countries, especially seeing as we are now living in one big, global community. This is a bold statement to make and in this essay it will be debated as to the best course of action for the most effective flow of goods and services. As such, the focus of these pages will mainly be on barriers to trade and what could be done to improve the trade situation of South Africa with its neighbouring countries, in particular.

Firstly, we will examine and explore the specific company problem; thereafter we will look at the possibilities in terms of barriers to trade, with specific focus on the SADC free trade agreement (FTA). Finally, to conclude, we will look at a policy proposal on the way forward for trade imports and exports in SADC specifically, with potential to expand into the rest of Africa.

2. THE PROBLEM

Working for a global company inevitably means having to export and import goods on quite a regular basis. When exporting this also usually implies having to pay trade tariffs and duties as well as non-trade barriers (NTBs), which could amount to quite a substantial cost to the company on an annual basis.

In this case the company is British American Tobacco (BAT), having to export goods from South Africa to the rest of the Southern African countries, which includes Namibia, Botswana, Lesotho, Swaziland, Malawi, Mozambique, Zambia and Angola, according to the BAT classification. To fully understand the complexities contained in...