Working Papers

The SACU Tariff Board: Original Design and Implications of Subsequent Developments

The SACU Tariff Board: Original Design and Implications of Subsequent Developments

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11 Nov 2015

Author(s): Gerhard Erasmus

With the signing of a new Southern African Customs Union (SACU) Agreement in 2002, the Member States agreed to a new design for conducting the operations of this Organization. This would have meant a radical departure from SACU’s previous modus operandi and the dominant role of South Africa in administering the Common External Tariff (CET) and determining tariff policy; including the use of the tariff as an industrial development instrument.

The proposed Tariff Board and National Bodies would have allowed for joint decision-making and common policies on the administration of SACU’s CET. The Agreement contained provisions to this effect and a plan for subsequent follow-up action to adopt a common industrial development policy and an annex on the functioning of the Tariff Board. The Agreement also provided for an ad hoc SACU Tribunal.

The contract on these particular aspects was never implemented. This paper discusses the implications of the subsequent developments for the functioning of SACU and for the BLNS States. What could these countries now do in order to deal with their domestic trade governance needs; such as new legislation and new institutions? What considerations should guide their decisions? What should new national legislation provide for and how will future SACU CET operations be conducted?

SACU seems to be in need of a new understanding among the Members on the future of this longstanding CU; which has contributed directly to the existence of a well-integrated regional market for trade in goods and commerce between the Members. SACU is also an excise union and four of the Members belong to the Common Monetary Area. Great care should be taken not to unravel this arrangement and undermine the benefits which all Members enjoy.

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