A Free Trade Agreement (FTA) between member states of the European Free Trade Association (EFTA) - Iceland, Liechtenstein, Norway and Switzerland – and the Southern African Customs Union (SACU) – Botswana, Lesotho, Namibia, South Africa and Swaziland - entered into force this week. This agreement is the first FTA that the EFTA States have concluded with another trading bloc, and the first with partner countries in sub-Saharan Africa. It is also the first time that a least developed country (Lesotho) becomes an EFTA free trade partner.

Through the agreement, the EFTA grants SACU states free trade on all goods, with the southern African bloc members promising to progressively dismantle their trade tariffs.
In 2007, the EFTA states exported goods worth US$850 million to SACU member states, while bilateral merchandise imports amounted to US$1.6 billion. The EFTA’s main export products to SACU were pharmaceutical products, machinery and mechanical appliances, while the main products imported from SACU were precious stones and metals, nickel and aluminium.
This FTA was signed in 2006. Its main objective is to achieve the liberalisation of trade in goods in conformity with relevant World Trade Organization provisions.
The dismantling of tariffs is asymmetrical in that the EFTA states liberalise trade in goods in all fields on the entry into force of the agreement while the SACU States will do so gradually until 2014 on almost all industrial products.
The FTA also takes into account the parties’ diverse levels of development by allowing for special treatment to Botswana, Lesotho, Namibia and Swaziland in some respects, and by setting out principles of economic cooperation and technical assistance.
Currently, the EFTA states have established preferential trade relations with 20 states and territories, in addition to the 27-member European Unio