POLICY REVIEW: SOUTHERN AFRICAN CUSTOMS UNION
23 and 25 April 2003
Concluding remarks by the Chairperson
> Press release: Continued economic reforms would attract more foreign investment
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.
Members also sought further clarification on:
export and investment incentives;
standards, technical regulations, and SPS measures;
public procurement regimes;
protection of intellectual property rights;
agriculture, including food security;
manufacturing, particularly motor, textiles and clothing industries; and
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.