Southern African Customs Union - Latest Developments and Structure

Latest Developments and Structure

Following the formation of the Government of National Unity in South Africa in April 1994, Member States concurred that the present Agreement should be renegotiated in order to democratise SACU and address the current needs of the SACU Member States more effectively.

With this in mind, the Ministers of Trade and Industry of the five member states met in Pretoria on November 11, 1994 to discuss the renegotiation of the 1969 agreement. The Ministers appointed a Customs Union Task Team (CUTT) which was mandated to make recommendations to the Ministers. CUTT has met on numerous occasions in the various Members States and good progress has been made in the renegotiation process.

At a meeting of Ministers of Trade and Finance Departments from the five SACU Member States, held in Centurion, Pretoria on September 5, 2000, the Ministers reached consensus on the principles of underpinning the Institutional reform in the SACU.

The Administrative Institutional structure of the revenue pool that was discussed was agreed to consist of the following:

Council of Ministers: A body represented by one Minister from each SACU member state. It would be the supreme SACU decision-making body and would meet on quarterly basis. The decisions taken by this Council would only be by consensus.

Commission: Administrative body composed of Senior Officials, three Technical Liaison Committees and an established Agricultural Liaison Committee.

Tribunal: An independent body of experts. It would report directly to the Council of Ministers. The tribunal would be responsible for tariff-setting and the Anti-dumping Mechanism.

Secretariat: Responsible for day to day operations of the pool. It would also be funded from the revenue pool. Its location would be determined by Senior Officials who were directed to meet after a period of a month to develop proposals for the implementation of the revised SACU Institutional Structure.

SACU Ministers further agreed that the revenue share accruing to each Member State should be calculated from three basic components:

1. a share of the customs pool;
2. a share of the excise pool; and
3. a share of a development component

Further, it was agreed that these three different components would be distributed as follows: The customs component should be allocated according to each country’s share of total intra-SACU trade, including re-exports.

The excise component, net of the development component, should be allocated on the basis of GDP. The development component should be fixed at 15% of the total excise pool and distributed to all SACU members according to the inverse of each country’s GDP/capita.

While SACU entered into a free trade deal with the four-nation European Free Trade Association on 1 July 2006, its negotiations with the United States for a free trade agreement have stalled (as of 8 January 2008).

SACU is also involved in negotiations for a free trade agreement - the Economic Partnership Agreements (EPA's) - with the EU, and the organisation has corresponded with EU Trade Commissioner, Karel De Gucht, between February and March 2010, to request that the EU did not demand the ratification and implementation of the EPA’s at the next round of negotiations without the concerns of the SACU countries being addressed. De Gucht replied that he would like to "invite the SADC EPA countries concerned to swiftly complete signature, notification and implementation of the interim EPA", and that "in the meantime, the EU is more than willing to address all pending issues and concerns".