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Continued economic reforms would attract more foreign investment
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This Trade Policy Review of the Southern African Customs Union (SACU)
has allowed us all a far better understanding of the “new” SACU, of
its trade policies, and of the policies and aspirations of its
members. Our dialogue has been thorough and comprehensive, stimulated
by the full and open engagement of the high-level delegations of
Botswana, Lesotho, Namibia, South Africa, and Swaziland, as well as
the insightful comments made by the discussant. Members
commended the SACU countries for the progress achieved in their
economic reform programmes since the previous time their trade
policies were reviewed in 1998, and noted that trade and investment
liberalization had played a key role in these programmes.
Members
acknowledged efforts made by SACU in trying to simplify its tariff
structure. However, they noted that SACU's trade regime remains
complex; the tariff structure still comprises ad valorem,
specific, mixed, compound, and formula duties. The imposition of
formula duties raised concerns about compliance by SACU countries with
their tariff bindings and with their obligations under the Customs
Valuation Agreement. Concerns were also expressed about differences in
tariff bindings among SACU countries, and about the large use of
anti-dumping and other contingency trade remedies by South Africa on
behalf of the customs union. Some Members
emphasized that lack of harmonization within SACU in certain key
non-tariff measures, such as quantitative restrictions, customs
procedures, standards and technical regulations, sanitary and
phytosanitary measures, competition policy, and internal taxes,
distorts trade flows, and undermines the utility of having a common
external tariff. In this regard, Members welcomed the 2002 SACU
Agreement, which provides for a more democratic institutional
structure, a dispute settlement mechanism, a new system regarding the
common revenue pool and sharing formula, and further harmonization of
policies throughout the customs union. Members expressed hope that,
once in force, the Agreement would contribute to the further
integration of SACU into the global economy. Members
praised SACU members for their commitment to the multilateral trading
system, and for their strong support for the Doha Development Agenda.
Several Members called attention to the complications of trade policy
making stemming from SACU states' membership in overlapping
preferential arrangements. This was not only difficult to manage,
given the limited resources of the countries, but could also detract
from multilateral efforts. In the light
of their recent macroeconomic performance, SACU countries were
encouraged to move ahead in implementing structural reforms, including
privatization, and market and product diversification. Fiscal reforms
and new sources of government revenue would be necessary to address
the expected negative effects of further tariff liberalization and
increases in health-related budgetary expenditures, notably on
HIV/AIDS and poverty alleviation.
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Members also
sought further clarification on:
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export and
investment incentives;
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standards,
technical regulations, and SPS measures;
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public
procurement regimes;
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protection of
intellectual property rights;
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agriculture,
including food security;
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mining;
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manufacturing, particularly motor, textiles and clothing industries;
and
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services
(telecommunications, tourism, transportation, financial services,
energy).
Members
appreciated the replies provided by the delegations of SACU, and
looked forward to further responses. In
conclusion, I believe that through this Review we have gained a better
understanding of the progress made by SACU since 1998, and of the
challenges that lie ahead. The very strong participation by SACU in
this meeting, the large number of questions posed, and the active
discussion, indicate the importance Members attach to this Review. I
encourage SACU countries to improve their multilateral commitments,
both in goods and services, and to pursue the implementation of their
reform programmes, with a view to enhancing the transparency,
predictability, and credibility of their trade regimes, and adherence
to the WTO principles. Trading partners can help by ensuring that
their markets are fully open, and by providing appropriate technical
assistance to SACU.
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