Sacu sings same song over regional monetary union

A MEETING last weekend between the five countries of the Southern African Customs Union (Sacu) agreed that the members would explore the possibility of forming an economic community monetary union.

The meeting of trade ministers and negotiators held in Swaziland appeared to gloss over differences in the bloc over the economic partnership agreements (EPAs) signed with the EU by Botswana, Lesotho and Swaziland and initialled by Namibia, which had caused a measure of resentment from South Africa.
Sacu comprises of South Africa, Swaziland, Lesotho, Namibia and Botswana.Trade Law Centre (Tralac) director Trudi Hartzenberg described the monetary union idea ‘as an interesting one’, noting that Swaziland, Lesotho, Namibia and South Africa already shared the South African currency – although these countries also had their own currencies for reasons of national pride, which were pegged to the rand.
It would only mean that Botswana would have to be drawn into the common currency area and would have to give up much of its independence in terms of determining monetary policy through its own central bank.
Tralac researcher Paul Kruger said he could not see Botswana ‘going that way’, noting that there were already so many difficulties at the current level of regional integration.The Institute for Global Dialogue’s Brendan Vickers said Swaziland, Lesotho and Namibia already did not enjoy control over interest rate decisions, which were determined by the SA Reserve Bank.
Not only would Botswana lose some of its monetary policy sovereignty, but it had different approaches to industrial policy to those of South Africa, Vickers asserted.While South Africa was adopting an ‘interventionist’ approach to industrial policy, including the support of downstream industries, Botswana wanted to open its economy to competition especially in the services sector, Vickers said.Hartzenberg welcomed the announcement that the countries supported the development of a Sacu trade and tariff policy.A competition and unfair trade practices policy had been developed some time back, she pointed out, but Sacu had not adopted it.Difficulties over the signing of the EPAs seemed to have waned. Hartzenberg noted that there were only 53 goods lines where there were tariff differences between the trade and development co-operation agreement – which governs the relations between the EU and South Africa – and the EPAs. ‘This is such a red herring,’ said Hartzenberg.
This followed suggestions that South Africa would be forced to strengthen customs controls within the region to avoid the trans-shipment of goods – including cheap clothing – from Europe to the Sacu states that had signed interim EPAs.
Vickers added that only Namibia wanted to raise tariffs on the importation of beer from Europe out of the 53 tariff lines.
These were 53 out of hundreds of items where there was agreement.- Business Report