Gerhard Erasmus, tralac Associate, discusses the prospects for a resolution to the ongoing dispute between South Africa and Zimbabwe over Harare’s latest import restrictions

In what has become known as the “Beitbridge dispute” Pretoria and Harare find it increasingly difficult to discover common ground in order to resolve their trade related differences. The reason is that SADC, the trade arrangement to which they both belong, has been stripped of its potential to provide a rules-based framework for resolving differences and ensuring predictability. Ultimately private firms and consumers have to foot the bill.

Zimbabwe recently adopted a regulation, in terms of Statutory Instrument 64 of 2016 (available here), requiring import licenses on a range of products exported by South Africa to Zimbabwe. South Africa’s official response was the “diplomatic” route. The South African Minister of Trade and Industry has given Zimbabwe three weeks to reopen its doors to South African exporters; an agreement has to be reached by August 24. He wants the parties to resolve the impasse before a SADC meeting of trade ministers in Botswana later in August.[1]

The two Ministers of Trade have had talks but they put forward arguments which can only be resolved through a neutral and objective dispute settlement mechanism. This cannot happen. The SADC Tribunal was disbanded after it had ruled, in 2010, against Zimbabwe because private farms had been expropriated, without compensation, for “land resettlement” purposes. South Africa and Zimbabwe are both members of SADC.

The Zimbabwean Minister of Trade provided a list of the factors which caused his government to impose these import control measures on South African goods. His country’s economy and some of its industries are under strain because of imports from South Africa and other SADC countries. President Mugabe has been more defiant. He has defended the import restriction as “retaliation to a similar protectionist move by Pretoria”.[2] The South African Minister said Zimbabwe should have followed the process in the SADC Protocol on Trade that sets out procedural requirements before imposing trade restrictions. Should there be any variation (by Zimbabwe) regarding the commitments in the SADC Protocol “there should be an application to the Council of the Ministers of Trade.”[3]

His “solution” falls short of an effective remedy. The SADC Council cannot settle disputes like these. The differences involve technical issues and legal principles, such as when safeguards may be justified. What the South African Minister suggests amounts to nothing more than an occasion for airing different (and probably acrimonious) views and claims. And then there is the problem about adopting binding resolutions; SADC political forums take decisions on the basis of consensus. SA’s suggestion will in all likelihood result in compromises and face saving deals.

However, if resolutions on a real solution are adopted, how will Pretoria react should Zimbabwe fail to comply with them? Will it resort to unilateral retaliation? It cannot declare a legal dispute and file an application with a SADC judicial organ because there is none.

It is, however, unlikely that Pretoria will take retaliatory measures. The matter is too sensitive; retaliation is technically difficult, is undesirable, and politically dangerous. Pretoria will want to avoid, specifically with respect to the regime of President Mugabe, the reputation of a regional bully. The relationship between the two nations has already deteriorated over earlier trade rows.[4]

The longer term prospects regarding a proper and legally certain Beitbridge settlement are bleak. Had SADC developed a rules-based culture matters might have panned out differently. This dispute offers an example of where safeguards or provisional safeguards (which are the rules-based response) should have been invoked. The SADC Protocol on Trade provides for them.

The building blocks for a rules-based trade regime in SADC had been put in place but has never been respected and enforced. The present impasse across the Limpopo demonstrates what the costs are. It teaches a lesson about pervasive deficiencies in Southern African trade arrangements.

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