Trade Performance Review 2007: Chapter 1: Overview

Year of publication: 
2007
Author(s): 
TIPS
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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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