1. THE SADC PROTOCOL ON TRADE
Noncedo Mviko
21 September 2018

2. Overview
- Background
Trade
Implementation Challenges
- Conclusion

3. Background
The SADC Trade Protocol (TP) is an agreement between 13 SADC Member States to reduce customs duties and other barriers to trade on imported products
Signed in 1996, and came into force in 2000, following a ratification process
SADC FTA launched in 2008 – when 85% of intra-SADC trade achieved 85% duty free status

4. Background
SACU, Mozambique, Tanzania, Zambia and Mauritius fully compliant: Tanzania derogation application
Malawi (at 90.5%)
Zimbabwe (non compliant by a considerable extent) tariff lines .
Seychelles ( 91,2% compliant, 6.3 % over 12 years and 2.5 % excluded

5. Background
Angola, Comoros and DRC are not signatory parties to the FTA
Angola initiating accession process- studies and consultations to understand benefits and the extent of liberalization
These countries charge MFN duties
To resolve non-compliance in the implementation of tariff phase down commitments, engagements are undertaken both at bi-lateral level with the countries concerned and at multi-lateral level in various SADC fora, from technical to Ministerial level;

6. Trade
SADC is a key export market for SA, total trade in 2017 was R344 billion
Significant growth in South African exports realized with the entry into force of the SADC Protocol on Trade
Whilst imports from the rest of SADC have increased, they remain much lower than South African exports to the region
This could largely be attributed to the diversified nature of the South African export basket hence development integration approach and deepening of integration :
Trade in Services –Negotiations on transport, financial, telecommunications and tourism finalised. Negotiations on energy and construction services underway.

7. TRADE TREND

8. South Africa's exports to SADC
Product code
Product label
Value in Rands
'TOTAL
All products
'2710
Petroleum oils and oils obtained from bituminous minerals (excluding crude); preparations containing ...
'2716
Electrical energy
'8704
Motor vehicles for the transport of goods, incl. chassis with engine and cab
'2610
Chromium ores and concentrates
'7102
Diamonds, whether or not worked, but not mounted or set (excluding unmounted stones for pick-up ...

9. South Africa's imports from SADC
Product code
Product label
Value in Rands
'TOTAL
All products
'2709
Petroleum oils and oils obtained from bituminous minerals, crude
'3302
Mixtures of odoriferous substances and mixtures, incl. alcoholic solutions, based on one or ...
'7108
Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured ...
'2711
Petroleum gas and other gaseous hydrocarbons
'1701
Cane or beet sugar and chemically pure sucrose, in solid form

10. Implementation challenges
Non Compliance vs Annex X Derogation provision
Dispute Settlement
Industrialization
Rules of origin
Non tariff barriers

11. Where there are more lines, the MS are operating outside the TP
Non-compliance
Annex X makes provision for derogation , where member states feel the need to exclude 5 or less tariff lines for development purposes
Where there are more lines, the MS are operating outside the TP
Other recourse measures : safeguards
Derogation granted to – Tanzania on sugar
Safeguards - Mauritius on spreads
Zimbabwe requested to submit application for a special dispensation – bilateral engagements

12. To date no MS has ratified the Protocol
Dispute resolution
No Tribunal
New Protocol on Tribunal to solve trade disputes between Member States (MS) adopted and signed by 11 MS during the 2014 Summit.
Will enter into force when two thirds (2/3) of MS (9) have ratified the Protocol.
To date no MS has ratified the Protocol
Process of ratification by SA is coordinated by the Department of Justice

13. Industrialization
Developmental integration approach: industrial and infrastructure development to combat limited productive capacity, improve diversification and linkages
SADC embarking on an industrial development program : Industrialization Strategy and Action Plan
Priority sectors agro-processing, pharmaceuticals, mineral beneficiation)
Objective: Creation of regional value chains
Stakeholder consultation underway on specific projects identified

14. Rules of origin
Certificate of origin obtained from SARS
A constant complaint that SADC rules of Origin are stringent
Disregards the fact that the rules represent industrialization capabilities and ambitions of the region
Targeted sectors include clothing and textiles
Calls to comprehensively review SADC rules of origin stalled by recent study arguing that SADC rules are comparable to other regional blocks’
TFTA and AfCFTA used to further the narrative for flexible rules
Rules ignored in exchange for revenue at borders- SA companies turned at borders
Joint verification by SARS and foreign counterpart – the wait can be very costly

15. Non-tariff barriers
The Agreement calls for removal of all trade barriers to facilitate free flow of trade
Online reporting of NTBs includes COMESA and EAC related NTBs
National focal points oversee resolution
Challenge with recording of complaints that can be resolved locally instead of cross border complaints e.g a South African company not contacting SARS directly
Improvements to include and SMS tool for ease of access
Database of NTMs in the TFTA region

16. Conclusion
Regional integration remains a critical component of the continent’s efforts to ensure sustainable economic and inclusive growth.
Bilateral engagement is key to resolution of challenges; taking into consideration economic conditions in the region
SADC a good foundation for negotiations at TFTA and AfCFTA level

17. Contact Details
For more information on trade in the SADC region please contact the following dti officials:
Ms Noncedo Mviko
Tel:
2. Ms Noma-Efese Mxi –
Tel:
3. Mr Shonisani Madzivhe
Tel: