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African Continental Free Trade Area negotiations: WHO is negotiating with WHOM? SACU and the EAC

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African Continental Free Trade Area negotiations: WHO is negotiating with WHOM? SACU and the EAC
26 Jun 2020

Southern African Customs Union (SACU)

SACU is a customs union with a common external tariff applicable to imports from outside the common customs area irrespective of the destination market.

All SACU countries are also members of the SADC FTA; accordingly there is a distinction between the CET tariff rates – preferential tariff rates levied on imports from countries with whom SACU has negotiated a trade arrangement (SADC, EU, MERCOSUR & EFTA) and the general rate of duty (the MFN applied tariff on imports from all other sources).

The SADC REC has 16 countries of which Angola (has recently made an offer), DRC & Comoros are yet to join the SADC FTA. Eswatini is also a member of the COMESA FTA in terms of which goods from Eswatini have preferential access to the other COMESA FTA countries. However, goods imported into Eswatini from COMESA FTA countries are not levied a preferential duty as Eswatini is exempt from reciprocating preferential access due to being a member of SACU. Lesotho is also one of the LDCs which benefits from unilateral preferential market access granted by Morocco.

East African Community (EAC)

The EAC is also a customs union with a common external tariff; however, the rate of duty of the EAC CET levied on goods imported from outside the common customs area does differ depending on the exporting country and the destination market.

The EAC countries can apply to the EAC Council of Ministers for an exception to the CET for a period of one year (1 July-30 June). These products are normally sensitive goods, like sugar, second-hand clothing, vehicles and steel products. These exceptions are to the MFN (general tariff) applied tariff – the different EAC members can apply different rates of duties which are higher or lower than the CET.

Four of the EAC members (Kenya, Uganda, Burundi & Rwanda) are also members of the COMESA FTA. Tanzania is a member of the SADC FTA. South Sudan is neither part of COMESA nor SADC. There are different preferential tariff rates applicable to imports into the different EAC countries depending on the source (COMESA FTA, COMESA non-FTA or SADC FTA) country and the destination market.

As a Customs Union with a CET the EAC countries will be negotiating together, but there are some practical challenges. Burundi, Tanzania and South Sudan have not yet ratified the AfCFTA; South Sudan & Uganda benefit from unilateral preferential market access granted by Morocco and how will negotiations take place given the extent of the overlapping memberships with other African FTAs?

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