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Southern Africa Customs Union (SACU) Summit

25 March 2011

South Africa hosted the SACU Summit on 25 March 2011.

President Zuma delivered the opening and closing addresses.

SACU consists of Botswana, Lesotho, Namibia, South Africa and Swaziland. These countries are all members of the World Trade Organisation (WTO) and the Southern African Trade Protocol.

The summit will be followed by the Second Tripartite Summit of the Southern African Development Community - East African Community - Common Market of East and Southern Africa (SADC-EAC-Comesa) on a date to be announced.

Hosting and participating in these summits forms part of South Africa's efforts to deepen regional integration in southern Africa and to extend integration across Africa.

South Africa advocates regional integration in southern Africa and sees SACU as integral to the process for deeper integration in SADC and across southern and eastern Africa.

SACU held two summits in 2010. That helped to develop a clear work programme for the institution and to enhance its unity of purpose.
SACU members have agreed to a targeted work programme in the following five areas:

regional industrialisation
reviewing the revenue-sharing formula to ensure a sustainable revenue- sharing mechanism that promotes development
developing a trade facilitation programme to improve border efficiency
unified engagement in trade negotiations
establishing common institutions such as a Tariff Board and the Tribunal within an agreed policy framework.

The upcoming SACU Summit will review the progress made and propose a strategic direction for the union as necessary.

South Africa contributes to accelerating economic integration of the SADC region and is committed to the promotion of intra-regional trade and investment.

Progress with trade integration in SADC is being facilitated by the establishment of a free trade area (FTA). In 2008, 85% of goods traded were duty free and, by 2012, 99% will be duty free.
South Africa advocates that the region's limited resources should consolidate the FTA by focusing on improving the rules of origin, enhancing trade facilitation and addressing non-tariff barriers. SADC members that are not yet participating in the FTA, should be assisted and encouraged to accede.
South Africa believes in advancing work on cross-border infrastructural development and sectoral cooperation with a particular effort to build and diversify the region’s production structures. President Jacob Zuma champions the rail and road infrastructure sector (North-South Corridor), emanating from the July 2010 African Union (AU) Summit which launched the New Partnership for Africa’s Development priority infrastructure initiative.
The focus will be on consolidating the FTA, and working to extend African integration through pursuit of the Trilateral FTA consisting of the SADC, the EAC and Comesa.

African countries need to strengthen their economic integration and coordinating mechanism through the regional economic communities (RECs).

The AU has prioritised the establishment of the AEC. A Pan-African Common Market of one billion people without internal borders will unleash the enormous economic growth and development potential of Africa.
Africa's three main regional blocs, namely SADC, the EAC and Comesa are making significant progress in harmonising their projects to promote full regional integration.
A milestone of the three RECs is the creation of a Tripartite Free Trade Area (T-FTA) between 26 countries, with a combined gross domestic product of about $625 billion and a combined population of approximately 700 million.
Africa has a relatively low level of intra-regional trade and the bulk of exports are destined for the European Union, the United States and Asian markets. This is partly the result of an overwhelmingly resources-based export basket.
A larger, integrated and growing regional market will enhance the interest of foreign investment and provide a basis for enhanced intra-African trade.

The Second Tripartite Summit, to be hosted by South Africa, aims to launch the T‑FTA negotiations and address the issues of regional infrastructure and the free movement of business people.

Most of South Africa’s trade with African countries is not in commodities but in value-added products. Extending the regional FTAs already in place on the continent has the potential to build and sustain more diverse markets in Africa.
In the context of markedly improved growth prospects for Africa alongside intensified global competition for Africa’s resources and markets, the need to enhance South Africa’s access to African markets is more urgent.
Development integration has been a key objective of the South African Government’s foreign economic policy since 1994. The approach combines market integration with sectoral policy coordination and cross-border infrastructural development. It also considers that high-level political cooperation is required particularly at an early stage of the process.
South Africa’s approach to the T-FTA contains three core elements. Firstly, the T-FTA should be limited to a trade in goods agreement that is flexible and provides sufficient scope for the parties to protect sensitive sectors. Secondly, trade-related issues such as services, including the issue of the business visas, and competition policy should be pursued on a separate track and be the subject for engagement in future. Thirdly, it is proposed reaffirmation that the infrastructure programme, namely the North-South Corridor, proceeds on a separate track.

SACU is the oldest customs union in the world. Read more about how it started.

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Last modified: 25 March 2011 13:29:53.