India and South Africa today vowed to conclude the ongoing talks for having a India-Southern African Custom Union (SACU) Preferential Trade Agreement (PTA) the deadline for which was the first quarter of 2012. The agreement seeks to open up greater opportunities for professionals and liberalise each other’s markets.
The Southern African Customs Union (SACU) consists of Botswana, Lesotho, Namibia, South Africa, and Swaziland. Commerce and industry minister Anand Sharma, who is currently visiting South Africa, met his counterpart Rob Davies in Johannesburg and decided to expedite the talks which have been going on since October 2007. So far, around ten rounds of negotiations have taken place.
Ever since the talks started, a successful conclusion was not possible as negotiations ran into regulatory issues. In 2011, India and South Africa have already had a bitter experience on regulatory issues concerning a merger between Indian telecom giant Airtel and South Africa’s MTN which faced the problem of dual listing. South African officials had urged India to consider dual listing of MTN so that it could retain its African ownership but Indian laws do not allow such a concept. Thus the deal, which was worth $23 billion and was expected to be the biggest merger ever, had to be called-off.
Under a PTA, the negotiating countries reduce their tariffs on a particular number of products from the level they maintain with countries that are not members of the agreement. However, unlike Free Trade Agreements (FTA), PTA does not slash or eliminate duties from a large number of tariff lines.
Both sides have set a target of achieving $15 billion worth of bilateral trade by 2014 from the present 14 billion.
