New agreement addresses Customs Union inequities

Leonard Neill FOR THE first time in more than 30 years the playing fields will be levelled in terms of trade development between the five members of the Southern African Customs Union (Sacu). A new agreement drawn up by the members is due to be ratified by parliament shortly ensuring that trade policy in the region is more co-ordinated, says the Department of Trade and IndustryÕs Tshediso Matona. At present, he said, any member state could enter into a trade agreement with a third country without the consent of the others. That had caused problems in the past where, for example, South Africa negotiated a free trade agreement with the European Union (EU). The new agreement was approved by the cabinet earlier this month and applies to South Africa and the BLNS nations Ð Botswana, Lesotho, Namibia and Swaziland. It provides a fairer distribution of common customs duties and excise duties collected on goods imported into the Sacu region, he said. An innovation was a development fund made up of 15% of excise duties collected, which would be distributed according to member statesÕ per capita gross domestic product. This will favour the two least developed countries, Lesotho and Swaziland. It was hoped, said Matona, that the development aspect of the new agreement would help other members to become less reliant on customs revenue as their economies expanded. This was important because their dependence on South Africa affected the extent to which they could be integrated into the rest of the world. The agreement will ensure the harmonisation of trade, agricultural and competition policies in the region, he said. In the past some countries had imported subsidised agricultural products from the EU despite the effect this could have on agriculture in South Africa.