The Limits to Regionalism: The Automotive Industry in the Southern African Development Community

As the southern African region moves closer towards the full implementation of the 1996 Southern African Development Community (SADC) Trade and Investment Protocol, which is intended to lead eventually to a full free trade arrangement, much closer economic ties are developing among the countries of the sub-continent. Indeed, the impetus for regional integration reflects both political imperatives and the economic necessity to consolidate southern Africa’s small national economies into a market of reasonable size.1 Even as a consolidated grouping the 14 SADC member states constitute a minor economic block with a combined regional product of approximately US$180 billion (Table 11.1). As far as the automotive industry is concerned, SADC is even less significant, accounting for less than one per cent of global output. SADC comprises economies of very varying sizes. The region is dominated by South Africa,2 which accounts for 71 per cent of regional GDP and over 95 per cent of automotive production.3 So while South Africa’s relative size may give it some of the attributes of ‘formal’ or ‘informal hegemony’, to use the van Tulder and Audet (Chapter 2) classification the small economic size of SADC as a whole means that it is more aptly described as ‘outside dominated’.