The Southern African Customs Union (SACU) comprises Botswana, Namibia, Lesotho, South Africa and Swaziland (BNLS countries) and four other Southern African countries—Malawi, Mozambique, Tanzania and Zambia (MMTZ countries).
Since 2000, MMTZ countries have been exporting textiles and garments to the SACU duty-free and this status is due to expire shortly.
If the trade agreement were not revived, more than 6,000 jobs in Malawi will be at stake.
SACU is unable to extend the trade deal due to delay in submission of certain information and statistics demanded by MMTZ countries.
Earlier SACU had agreed to grant Malawi's request for an increase by four million to 12.5 million pieces in textile export volumes after it fulfilled outstanding requirements.
A report stated that a condition is being laid before the extension as agreed upon by SACU.
The condition defines that South African Developing Countries (SADC) exporters must attain capacity for the double-transformation regime in line with the SADC Trade Protocol.
Double transformation means that a country should have capacity to produce fabrics and garments, for such garments to enjoy preferential market access under regional trade terms.
SADC member states are required to meet the double transformation criteria.
Until this year, Least Developed Countries (LDC) including Malawi was expected to meet a less stringent rule of origin of single transformation, to enjoy preferential access to regional markets.
Now Malawi is also required to upgrade to the double transformation regime, which is rather difficult to achieve.
However, the Ministry of Trade and Private Sector Development of Malawi are optimistic of obtaining duty-free extension from SACU.
On the other hand the MMTZ/SACU deal is being considered as an adhoc agreement.
Meanwhile, SADC member states are waiting for the trading bloc to become a free-trade area (FTA) by 2008.
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