International trade depends heavily on transporting goods across national borders. Stakeholders and businesses in the private sector have identified difficulties at borders as a major impediment to trade throughout the Southern African Development Community (SADC) region. Many nations within the region are landlocked, which forces goods to cross several national borders during transport to market. Inefficient customs procedures and further exacerbate this situation, resulting in long delays at border crossings, which in turn impacts shipping deadlines.
In order to further facilitate trade and cooperation in the region, SADC has issued an annex to its Protocol on Trade, which seeks to harmonise and simplify customs procedures on the road to establishing a Customs Union by 2012. Bringing Member States under a unified customs system ensures clear and simple procedures for importing and exporting goods to other Member States and supporting economic competitiveness in the region.
The Protocol on Trade
SADC’s intentions to streamline customs procedures and trade facilitation are outlined in the Protocol on Trade, Annex II Concerning Customs Co-Operation within the Southern African Development Community.
The Annex sets out to simplify and harmonise customs laws and procedures by:
- Providing for common measures through which Member States shall undertake to comply in the formulation of their Customs laws and procedures
- Establishing appropriate institutional arrangements at regional and national levels
- Co-operating to prevent fraud and illicit trade
Toward this goal, the Annex of the Protocol on Trade requires Member States to:
- Adopt common nomenclature (naming standards) for customs procedures, and make their import and export statistics publicly available (Article 3)
- Adopt a system of goods valuation in-line with the World Trade Organization's system (Article 4)
- Work towards simplifying and modernising their customs procedures (Articles 5 and 6)
- Cooperate with other Member States on training staff, communicating information, and investigating and suppressing customs offences (Articles 7, 8, and 9).
Rules of Origin
To support economic growth within Southern Africa, SADC customs regulations give preferential treatment to goods that originate from within Member States. Goods that fall under SADC Rules of Origin are not subject to tariffs when being imported or exported within the Free Trade Area. In order to qualify for these benefits, goods must fit one of the following criteria:
- Wholly produced or obtained within a Member State. Items such as minerals, fish and livestock, fruit and vegetables, or products made with these locally-sourced items fit this criterion.
- Produced in a Member State using non-originated materials, but have been substantially processed within one.
- Changed tariff headings due to the processing that occurred in a Member State.
Goods that meet all the requirements of SADC’s Rules of Origin are entitled to a certificate of origin, which allows holders to take advantage of the benefits of the Free Trade Area.
Toward a Customs Union
In order to pursue stronger Regional Integration on customs issues, Annex II of the SADC Protocol on Trade calls for the appointment of a Sub-Committee on Customs Cooperation, whose mandate oversees all aspects of customs integration for Member States.
Thus far, the Sub-Committee has developed instruments to implement the Protocol on Trade, such as tariff nomenclature, Rules of Origin, transit regulations, codes of conduct for customs officials, and systems allowing for the common interpretation of these instruments.
These regulations are a precursor to a widespread Customs Union, linking all Member States of SADC, within which trade between members is free while a common external tariff is levied on non-member trading partners. At present, five Member States have signed into the Southern Africa Customs Union: Botswana, South Africa, Namibia, Lesotho, and Swaziland. While several of these Member States are small, Free Trade with the larger economy of South Africa has spurred their development. Together, these Member States are establishing trade advantages in the region and internationally. To promote further cooperation, SADC continues to work to incorporate other Member States into the Customs Union.