Trade Liberalisation in SADC and the Economic Benefits of belonging to an RTA: The case of Tanzania

Abstract

This paper examines the dynamics of trade liberalisation in the Southern Development Community (SADC), region and the economic benefits that Tanzania derives from SADC membership. The paper uses qualitative analysis and trade indices. The findings show that SADC is far behind its agreed schedule of transforming the region into a customs union and SADC intra-regional trade is very low, only South Africa and Mozambique seem to carry the potential to increase intraregional trade and benefit from SADC in the short run. On the other hand, Tanzania's economic benefits from SADC membership have remained trivial, though her exports and market share have been steadily increasing since the mid 1990s. However, Tanzania does not suffer adversely from the dual membership of EAC and SADC regions, despite its membership in the two overlapping RTAs making its trade regime complex because tariff reductions under EAC customs union are not compatible with SADC's hence resulting in problems in implementing the SADC Trade Protocol. However, the country may not need to withdraw  its membership from either EAC or SADC due to signs of good prospect in the long run under the proposed harmonisation of the EAC and SADC trade regime through the Tripartiite Free Trade Area arrangement (COMESA-EAC-SADC).