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TRADE-SOUTHERN AFRICA: FTA Will ‘‘Choke’’ Small Business

Stanley Kwenda

JOHANNESBURG, Aug 25 2008 (IPS) - The Free Trade Agreement (FTA) that Southern African Development Community (SADC) governments agreed to will boost large South African companies’ reach in the region at the expense of small-scale producers and shops.

Thomas Deve: "It's just an elite deal" Credit:  Stanley Kwenda/IPS

Thomas Deve: "It's just an elite deal" Credit: Stanley Kwenda/IPS

This is according to civil society organisations belonging to the Southern African People's Solidarity Network (SAPSN).

SAPSN contends that the signing of the FTA in the current regional environment will not lead to fair trade. The network adopted a resolution to this effect at its summit which ran parallel to the SADC summit of heads of state last weekend (Aug 16-17). SAPSN represents several non-governmental organisations from across the region.

‘‘We must recognize that such a SADC free trade area will serve the expansionist aims and interests of South African companies, not the equitable and more balanced trade development that enables cross-border trade, especially by small women traders,’’ read a draft of the resolution.

A delegate from Zimbabwe asked, ‘‘where is the fair trade when cross-border female traders are forced to spend hours waiting at the border?’’

Jubilee South Africa’s message was more strident, urging civil society groupings to rally populations in their home countries against the SADC FTA. Jubilee is a non-governmental organisation calling for the cancellation of poor countries’ debt.


The organisation's chairperson, Mallet Pumelele Giyose, said the FTAs will only benefit corporations from South Africa and, in some cases, their parent companies based in the North.

The SADC FTA ‘‘is a deal for South African businesses. There is nothing in it for SADC. All it will do is to choke the life out of small businesses in the region,’’ Giyose told IPS.

He cited examples of how South African big business is spreading its influence across the continent, muscling small businesses out of trade in their home countries.

Giyose lamented the case of Zambia where shopping malls have been taken over by South Africa-based corporations, leading to loss of livelihoods for local producers whose products can't compete with imported products. He added that FTAs are bankrolled by corporate interests that put profit before people.

Thomas Deve, United Nations' Millennium Campaign policy analyst for Africa based in Nairobi, Kenya, gave a slightly different interpretation: ‘‘The SADC FTA is a welcome development but in the region's current state, it is just an elite deal which does not take small business and ordinary people into account. We will not stop campaigning against the FTA, whether it is signed or not.’’

The Millennium Campaign promotes the participation of people in the achievement of the United Nations’ Millennium Development Goals.

A delegate from Zambia at the SAPSN meeting deplored SADC for ‘‘killing’’ markets for small farmers in Zambia. He called on SADC to represent the people's interests and not to parrot the ‘‘gentlemen's club'' of the North which has nothing to do with concern over average people’s lives.

‘‘Cabbages and vegetables are now cheaper in the supermarkets as all farmers are forced to sell their products in the supermarkets,’’ said the delegate.

SAPSN contends that the FTA will not benefit SADC states until the region is fully integrated. This integration process is being undermined by the economic partnership agreements (EPAs) with the European Union (EU) which have been entered into on a bilateral basis, fragmenting the region.

‘‘SADC must reunite as a region and, together, firmly resist the EU's re-colonisation through the EPAs, instead of manoeuvring separately to get EU trade and aid support which is splitting SADC,’’ SAPSN resolved at its meeting.

These views echoed to some extent SADC Executive Secretary General Augusto Tomaz Salamao's remarks that the region will not fully achieve its aspirations if it is not united.

SAPSN also argued that the SADC FTA will further serve to create an open integrated market for EU importers, investors and service corporations.

Meanwhile, the cash strapped Zimbabwean government has suspended exports of basic commodities in a desperate bid to try and replenish empty supermarket shelves. The suspension of exports will last for the next two months. The goods covered under the ban include sugar, cooking oil, salt, soap, candles, rice and sanitary pads.

Basic foods such as sugar, bread, the national staple food maize meal, and cooking oil are often in short supply in Zimbabwe, which was once the regional breadbasket.

The suspension comes amid a political crisis in Zimbabwe that intensified after President Robert Mugabe's re-election in June in a one-person poll widely condemned as a sham. The just-ended SADC summit failed to find a solution to the Zimbabwe crisis while the two main contenders for political power, ZANU PF and MDC, are still at loggerheads in their talks over a deal.

The country's inflation rate has been officially put at 2.2 million percent and at least 80 percent of the population live below the poverty threshold.

 
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