Sacu and Mercosur finally agree trade pact

AFTER THREE years of talks the Southern African Customs Union (Sacu) has finally concluded a preferential trade pact with Mercosur – the South American trade bloc originally signed up in 1991 by Argentina, Brazil, Paraguay and Uruguay. Bolivia, Chile, Colombia, Ecuador and Peru currently have associate member status. Venezuela signed a membership agreement in 2006, but before becoming a full member its entry has to be ratified by the Paraguayan and the Brazilian parliaments. The current four full member countries make up a trade bloc with a total population of over 237-million, with an estimated total gross domestic product of US$2.4- trillion (million million) a year – rating Mercosur the fifth largest economy in the world, according to International Monetary Fund (IMF) figures. The Sacu/Mercosur tie-up is an extension of the original trade deal agreed in 2004. And, according SA’s chief trade negotiator, Xavier Carim, all the technical negotiations have now been concluded in a deal which includes 2 000 product lines considered duty-free imports to both trade blocs. But the intended agreement still excludes a big proportion of the goods manufactured in the two regions. Automotive products, for example, still face import tariff barriers – and what are described as “new generation” issues, such as services and investment, are also not included. However, Carim told the press, the agreement included a provision for the future broadening of the deal. It will now go before the various governments for approval under their national laws before being ratified, but it is expected to be finalised and in-force before year-end.