ANNEX 4
SOUTH AFRICASACU-South Africa WT/TPR/S/114/ZAF
Page A4-213
CONTENTS
Page
I. THE ECONOMIC ENVIRONMENT 217
(1) M AJOR FEATURES OF THE ECONOMY 217
(2) R ECENT ECONOMIC DEVELOPMENTS 218
(3) T RADE PERFORMANCE AND INVESTMENT 219
(i) Trade in goods and services 219(ii) Investment 220
(4) O
UTLOOK 225
II. TRADE AND INVESTMENT REGIMES 227
(1) P OLICY FORMULATION AND IMPLEMENTATION 227
(2) T RADE AGREEMENTS 228
(i) The Trade, Development, and Cooperation Agreement (TDCA) 230(ii) Other trade agreements 232
(3) I
NVESTMENT FRAMEWORK 233
(4) T ECHNICAL ASSISTANCE 235
(i) Implementation of WTO Agreements 235
(ii) Trade negotiations 236(iii) Supply-side constraints and integration of trade into development plans 236
III. TRADE POLICIES AND PRACTICES BY MEASURE 238
(1) O
VERVIEW 238
(2) M EASURES DIRECTLY AFFECTING IMPORTS 238
(i) Registration, import duties, and related measures 238(ii) Import prohibitions and licensing 238(iii) Local-content schemes 242(iv) Standards and other technical regulations 242(v) Government procurement 248
(vi) countertrade 249
(vii) Other measures 249
(3) M
EASURES DIRECTLY AFFECTING EXPORTS 250
(i) Registration and taxes 250(ii) Export prohibitions, controls and licensing 250(iii) Export subsidies, finance, and assistance 253
(iv) Other measures 254
(4) M
EASURES AFFECTING PRODUCTION AND TRADE 254
(i) Incentives 254(ii) State-owned enterprises and privatization 255(iii) Competition policy, and price controls 257
(iv) Protection of intellectual property rights 259
IV. TRADE POLICIES AND PRACTICES BY SECTOR 262
(1) O
VERVIEW 262
(2) A GRICULTURE AND RELATED ACTIVITIES 264
(i) Policy developments 264(ii) Policy by key product category 266WT/TPR/S/114/ZAF Trade Policy Review
Page A4-214
Page
(3) M INING AND QUARRYING 270
(i) Overview 270(ii) Policy by type of products 271
(4) M
ANUFACTURING 273
(i) Main features 273
(ii) Policy developments 274
(iii) Selected product categories 276
(5) S ERVICES 277
(i) Telecommunications 277(ii) Financial services 279
(iii) Transport 281
(iv) Tourism 283
REFERENCES 285
APPENDIX TABLES 289
CHARTS
I. THE ECONOMIC ENVIRONMENT
I.1 Structure of exports and imports, 1995-00 221
I.2 Direction of merchandise trade, 1997-01 222
I.3 Foreign direct investment into South Africa, 1997 and 2000 224
IV. TRADE POLICIES AND PRACTICES BY SECTOR
IV.1 SACU's tariff by ISIC classification, 2002 263
TABLES
I. THE ECONOMIC ENVIRONMENT
I.1 Main economic indicators, 1997-01 217
II. TRADE AND INVESTMENT REGIMES
II.1 Status of South Africa's selected notification requirements to WTO, as of January 2003 228
II.2 Trade-related legislation in South Africa, 2002 234
III. TRADE POLICIES AND PRACTICES BY MEASURE
III.1 Levies on agricultural products 239
III.2 Goods subject to import control, January 2003 241III.3 Agricultural products to which quality standards apply 246III.4 Products subject to export control, January 2003 250
III.5 State-owned companies (SOCs) to be restructured, January 2003 256SACU-South Africa WT/TPR/S/114/ZAF
Page A4-215
Page
IV. TRADE POLICIES AND PRACTICES BY SECTOR
IV.1 Maize production, consumption, prices, and trade, 1997-03 266
IV.2 Wheat production, consumption, prices, and trade, 1997-03 267IV.3 Sugar production, consumption, prices, and trade, 1997-02 267
IV.4 Manufacturing sales, 1997-02 273
IV.5 Selected telecommunication indicators, 1996-00 (year beginning 1 April) 278
APPENDIX TABLES
I. THE ECONOMIC ENVIRONMENT
AI.1 Balance-of-payments, 1990-01 291
AI.2 Merchandise imports, 1997-00 292
AI.3 Commodity exports, 1997-00 293
AI.4 Imports by origin, 1997-00 294AI.5 Exports by destination, 1997-00 295
III. TRADE POLICIES AND PRACTICES BY MEASURE
AIII.1 Incentive schemes, January 2003 296
IV. TRADE POLICIES AND PRACTICES BY SECTOR
AIV.1 Summary of South Africa's sector-specific commitments under the GATS 300SACU-South Africa WT/TPR/S/114/ZAF
Page A4-217
I. THE ECONOMIC ENVIRONMENT
(1) Major Features of the Economy
1. With a surface area of over 1.2 million square kilometres, a coastline of nearly 3,000
kilometres, and a population of around 44 million, the Republic of South Africa is the biggest country
in southern Africa.  South Africa's 2001 per capita income of around US$2,800 (Table I.1) places it in
the ranks of upper middle income countries.
Table I.1
Main economic indicators, 1997-01
1997 1998 1999 2000 2001
Miscellaneous
GDP at market price (US$ billion - year beginning April 1) 144.9 126.5 130.3 121.3 102.3
GDP per capita (US$) 3,600 3,154 3,023 2,871 2,793
Real GDP (annual percentage change) 2.5 0.8 2.1 3.1 2.2
Unemployment rate (official definition; %)b .. 25.2 23.3 26.3 28.8
Consumer price index (end of period – percentage change) 6.0 9.1 2.2 2.3 4.6
U.S. dollar exchange rate (end of period) 4.9 5.9 6.2 7.6 12.1
Real effective exchange ratec7.0 -8.9 -5.2 -3.0  -17.0
Monetary sector (percentage change)
Money supply (M2 - end of period) 17.2 14.6 10.1 7.5 17.0
Share of real GDP (per cent)
Agricultured4.0 3.6 3.4 3.2 2.8
Industrye32.8 31.9 30.8 30.9 ..
 - Manufacturing 19.9 19.3 18.8 18.8 18.6
Services 63.2 64.4 65.8 65.9 ..
Government finance (percentage of GDP)
Overall balancef-3.8 -2.3 -2.0 -2.0 -1.5
National accounts (percentage of GDP)
Private final consumption 63.1 63.4 63.0 62.9 62.4
Government final consumption 19.3 19.1 18.4 18.0 18.0
Gross fixed capital formation 16.6 17.1 15.5 14.9 14.8
Net increase in inventories 0.1 -0.4 0.5 1.1 0.5
Exports of goods and services (XGS) 24.6 25.9 25.6 28.6 31.0
Imports of goods and services  -23.5  -24.7  -22.9  -25.7  -27.1
Memorandum
Current account balance (percentage of GDP) -1.5 -1.7 -0.5 -0.4 0.1
External debt/XGS (%) 107.3 109.0 115.4 100.7 96.4
Gross official reserves (US$ billion)  .. 5.4 7.4 7.5 7.5
Gross official reserves (months of imports)  .. 2.0 2.9 2.7 2.9
Trade in goods and services (percentage of GDP) 48.1 50.3 48.6 54.4 58.5
Terms of trade (percentage change) -1.2 -1.1 -3.0 -1.7 1.2
.. Not available.
a Estimates.
b Excludes individuals who have not taken active steps to look for work or short self-employment in the four weeks prior to the 
interview.
c In U.S. dollars, annual percentage change. Negative sign indicates depreciation.
d Agriculture includes forestry, hunting, and fishing, as well as cultivation of crops and livestock production.e Industry includes mining, manufacturing, construction, electricity, water, and gas.
f Fiscal year beginning 1 April. Public deficit (-) or surplus (+).
Source: IMF, International Financial Statistics , various issues; IMF, Staff Country Report N° 00/42; and World Bank, 
2002 World Development indicators , CD-ROM .
2. South Africa's economy is relatively diversified, with manufacturing and services contributing
a sizeable share of total GDP (Table I.1); mining  and quarrying account for a large part of South
Africa's total exports (section (3) below); while agriculture remains an important provider ofemployment, especially in the rural areas.WT/TPR/S/114/ZAF Trade Policy Review
Page A4-218
3. This picture masks a striking dualism due to several decades of apartheid, which led to very
distorted and unequal income distribution. At on e extreme, about 13% of the population is "first
world", with high-school education, low childhood mo rtality rates, and minimal poverty. At the other
extreme, is about 53% of the population, half of  which have less than a primary school education,
over a third suffer from chronic malnutrition, and poverty is maximal.1
4. Dualism, poverty, and unemployment in South Africa are inextricably linked.
Unemployment, which increased from 25.2% in 1998 to an estimated 28.8% in 2001 (Table I.1), is
among the highest in the world. A range of factors have contributed to South Africa's persistently high
unemployment rate, including the legacy of the apartheid capital-intensive production structure,
chronic skilled labour shortages, low investment, ri gidities in the labour market, and the increase in
urban population since the 1994 political change. The HIV/AIDS pandemic has compounded SouthAfrica's development challenges.
5. The import-substitution approach of the apartheid era also had high social, economic, and
environmental costs. Since the mid 1990s, this has been transformed into an outward-oriented
strategy, with trade and investment liberalization at the core, making the economy more productive
and efficient.
(2) R
ECENT ECONOMIC DEVELOPMENTS
6. Empirical evidence suggests that trade liberalization was the major source of total factor
productivity growth in the 1990s, which in turn has accounted for virtually all of South Africa's
economic growth since 1994.2 South Africa has enjoyed positive but modest rates of economic growth
since its last Review. Real GDP grew at an av erage of 2.6% a year during 1997-01. In 2002, real GDP
growth was projected to be just over 3%. This GDP growth is, however, well short of the 4-5% per
year required to substantially reduce the country's unemployment rate.3 The central policy challenge
facing South Africa seems to be to increase the level of economic activity in a manner that raises
living standards across the country.
7. One of the positive features of the South African economy in recent years has been the
Government's commitment to monetary and fiscal discipline. As a result, year-end inflation  decreased
from 9.1% in 1998 to 4.6% in 2001 (Table I.1). The South African Reserve Bank (SARB) adopted aninflation-targeting strategy in February 2000. Inflation is targeted at 3-6% for 2002 and 2003, and at
3-5% for 2004 and 2005.
4 A depreciation of the real effective exchange rate of about 40% took place
over 1995-015, partly because the SARB pursued a freely floating exchange rate regime during most
of this period.6 Since mid-December 2001, the SARB has taken a number of policy steps, including
increases in interest rates, to strengthen the rand and contain the inflationary impact of its
depreciation. Nevertheless, year-end inflation in 2002 is estimated at 7-8%, well above the target rate.
8. The overall budget deficit of South Africa was reduced from a peak of 9% of GDP in 1993/94
to 1.5% of GDP in 2001/02. Of this reduction, around 5 percentage points of GDP reflected lower
                                                     
1 World Bank (2000).
2 See IMF Staff Country Report No.00/42.
3 See IMF Staff Country Report No.00/42.
4 In October 2002, the SARB slightly relaxed the inflation-target range for 2004 from 3-5% to 3-6%.
(Financial Times , 30 October 2002).
5 IMF (2001b).
6 In nominal terms, the rand/U.S.dollar exchange ra te increased (depreciation) from 4.68 at the end of
1996 to 12.09 at the end of 2001, and then decreased (appreciation) to 8.9 at mid-December 2002.SACU-South Africa WT/TPR/S/114/ZAF
Page A4-219
expenditure and the rest higher revenue.7 In 2002/03, a moderately expansionary budget deficit of
2.1% of GDP is projected, which may put more pressure on the inflation rate. According to the
authorities, the rationale behind this expansionary budget deficit is that sufficient fiscal consolidation
has taken place since 1994 (particularly improvements in tax collection, and in expenditure
monitoring and control) to warrant relaxing earlier constraints in government expenditure, in an
attempt to boost economic growth.8
9. South Africa has made major strides in reducing macroeconomic imbalances since its last
Review. Trade liberalization efforts have contributed to eliminate the current account deficit of
South Africa's balance of payments. The current account shifted from a deficit of 1.7% of GDP in
1998 to a surplus of 0.1% of GDP in 2001 (Table I.1), the first since 1994. The main factor driving
this shift in the current account has been the incr ease in the total trade surplus (section (3) below).
However, in 2002 this trade surplus decreased, resulting in a current account deficit estimated at 1.4%
of GDP, due in part to higher oil prices.
10. South Africa has also made steady progress in reducing its external debt exposure, a key
source of external vulnerability in the past. Total external debt as percentage of total exports of goods
and services decreased from 107.3% in 1997 to an estimated 96.4% in 2001. South Africa's netinternational reserve position has also improved considerably, from US$5.4 billion at the end of 1998
to US$7.5 billion at the end of 2001, equivalent to 2. 0 and 2.9  months of total imports, respectively
(Table I.1).
(3) T
RADE PERFORMANCE AND INVESTMENT
(i) Trade in goods and services
11. Extensive trade liberalization undertaken since the mid-1990s and the lifting of trade
sanctions, supported by real effective exchange rate depreciation, have rendered the South Africaneconomy more competitive and efficient, contributing to a strong trade performance. Since its last
Review, South Africa has run an increasing goods and services trade surplus, which rose from
US$1.7 billion in 1997 to US$4.4 billion in 2001. It is estimated that the total trade surplus decreased
to around US$4 billion in 2002. Despite an increase in the share of total trade to GDP from 48.1% in
1997 to 58.5% in 2001, South Africa has recently been falling in terms of classification of worldtraders. In 2001, South Africa ranked 27th in terms of world merchandise exporters (considering the
EU countries together and excluding intra-EU trade)
9, and 28th among importers, compared with 25th
and 27th, respectively, in 1999.10 For world trade in commercial services, South Africa ranked 41st
both as an exporter and as an importer in 2 001, down from 39th and 40th, respectively, in 1999.
12. South Africa has a relatively diversified export base; food and other primary products, and
manufacturing (particularly machinery and transport equipment, iron and steel, and chemicals),
represent a sizeable share of total merchandise exports (Chart I.1). However, the share of minerals and
mineral products, dominated by diamonds, gold, an d more recently by platinum group metals, is
increasing. The share of diamond exports in total goods exports rose from 14.7% in 1997 to 18.6% in
2001, whereas gold exports declined from 17.9% of total merchandise exports in 1997 to 11.1% in2001. By destination, the EU, led by the United Kingdom (6.5% of total merchandise exports in 2001,
up from 6.2% in 1997), is still the major export market for South Africa. South Africa's goods exports
to  other African countries declined from 16.3% of its total merchandise exports in 1997 to 14.4% in
                                                     
7 IMF (2001b).
8 IMF (2001b).
9 WTO (2002).
10 WTO (2000).WT/TPR/S/114/ZAF Trade Policy Review
Page A4-220
2001. Similarly, South African merchandise exports to the United States fell from 9.6% to 7.5%
(Chart I.2).
13. Despite its positive rates of economic growth since the last Review, South Africa's
merchandise imports decreased from a peak of US$30.9 billion in 1997 to US$24.2 billion in 2001.
The leading merchandise imports are electrical and non-electrical machinery whose share in the total
increased from 27.9% in 1997 to 28.5% in 2001 (Chart I.1); followed by chemical products with12.2% of total goods imports in 2001 (up from 10.7% in 1997); and other semi-manufactured goods
with 8% in 2001 (down from 8.2%). South Afri ca's goods imports are largely from the EU,
particularly Germany, which accounted for 10.5% of total merchandise imports in 2001 (Chart I.2).
Merchandise imports from other African countries went up from 2% in 1997 to 2.9% in 2001, while
those from the U.S. declined slightly from 11.2% in 1997 to 11.0% in 2001.
14. South Africa remains a net importer of services, although the deficit on the services account
declined slightly from US$0.7 billion in 1997 to US$0.5 billion in 2001.   Total import-related services
are estimated to have decreased from US$6 billion in 1997 to US$ 4.7 billion in 2001, whereas total
export-related services went down from US$5.3 billion to US$ 4.7 billion in the same period.
11
Tourism constitutes the main component of services exports, while net payments of investment
income are the principal source of deficit in the services account.
(ii) Investment
15. Despite improvements in macroeconomic conditions, and South Africa's advantages in terms
of natural resources and market size, foreign investors have shown limited interest in acquiring,
creating, or expanding domestic enterprises. Fore ign direct investment (FDI) inflows into South
Africa peaked at about 2.5% of GDP in 1997 (largely due to the partial sale of Telkom
(Chapter IV(5)(i)), but averaged just under 1% of GDP during 1994-01, against 3-5% in countries atcomparable levels of development.
12 As private investment has been inhibited by South Africa's low
saving rates13, foreign investment could help address the saving deficiency of the economy, promote
higher rates of economic growth, and contribute to poverty reduction through increased employment.
16. FDI has been inhibited in South Africa by a number of factors, including the slow
implementation of the privatization programme (Chapt er III(4)(ii)); insecurity problems, mainly urban
crime; the HIV/AIDS pandemic; the political situ ation in some neighbouring countries; and the
persistence of some foreign exchange restrictions (Box I.1). Moreover, although considerable
progress has been made in promoting industrial development in the country, relatively high protection
of some industries, such as textiles (Chapter IV(4)(iii)(b)), might have played their part.
                                                     
11 IMF (2002b).
12 Egypt, Thailand, and Mexico are some of the co untries considered as co mparable to South Africa.
See IMF (2002a).
13 Private domestic savings declined from 16% of GDP in 1998 to under 14% in 2001 (IMF, 2002).SACU-South Africa WT/TPR/S/114/ZAF
Page A4-221
0%20%40%60%80%100%
1995 1996 1997 1998 1999 2000
0%10%20%30%40%50%60%70%80%90%100%
1995 1996 1997 1998 1999 2000Chart I.1
Structure of exports and imports, 1995-00
(a) Exports
(b) Imports
Source: WTO Secretariat calculations, based on UNSD, Comtrade database; and IMF Staff Re ports.Food
Machinery and transport equipmentDiamonds
Iron and steelFuels
GoldOres and other minerals
OtherOther semi-manufactures
ChemicalsOther primary products
Food
Electrical machinesNon-electrical machinery
Other semi-manufacturesFuels
Other consumer goodsTransport equipment
ChemicalsOther primary products
OtherWT/TPR/S/114/ZAF Trade Policy Review
Page A4-222
Chart I.2
Direction of merchandise trade, 1997a and 2001
Per cent
1997 2001
(a) Exports
(b) ImportsTotal: US$22,485.4millionOther 
Africa 7.8
Mozambique
  1.9
Japan
6.7United States
9.6
Other Europe 
7.9  Belg-Lux 2.4Germany 6.3
Italy 2.5United 
Kingdom
6.2
Netherlands 3.5Other 
20.4
Total: US$27,927.7million
Total: US$30,879million Total: US$24,188.3million
a
Source:1997 data are for the Southern African Custom Union as a whole.
WTO Secretariat calculations, based on UNSD Comtrade database.Europe
28.8
of which:
EU 26.2Asia
21.2Europe
27.2
of which
EU 25.5
Asia
18.1
Europe
39.6
of which
EU 37.0Asia
19.4Other Asia
11.6
United States
11.2
Africa 2.0
Australia 
2.3
Japan 6.7France
3.2
Other
Europe 11.6Germany
12.2
Italy
3.4China  2.2United Kingdom
9.2Other
 21.8
Other Asia
10.5Africa
16.3
Africa
14.4America
13.3
Zimbabwe
4.6Zambia 2.0
Other Africa
7.6
Mozambique
  2.4Japan 
4.6United States 
7.5
Other 
Euro pe  7.4  Belg-Lux 2.9Germany 4.7
Italy  2.8United 
Kingdom 6.5
Netherlands
2.9Other 
30.0
Other 
Asia
10.2Zimbabwe 2.3Zambia 2.1
Middle
 East
2.9Middle East
3.3America
10.3
America
14.8
Europe
39.4
of which
EU 36.3Asia
22.8United States
11.0
Africa 2.9
Australia 2.9
Japan 5.5France
4.0
Other
Europe 13.6Germany
10.5
Italy
3.9China  4.4United 
Kingdom
7.4Other
17.5
Other Asia
12.9America
14.6SACU-South Africa WT/TPR/S/114/ZAF
Page A4-223
Box I.1:  Foreign exchange  control in South Africa
Exchange control in South Africa is administered by the Exchange Control Department of the South African
Reserve Bank (SARB), and through commercial banks that have been designated "authorized dealers" inforeign exchange.
There are no restrictions on foreign firms wishing to i nvest in share capital. However, investors are advised to
ensure that the share certificates are endorsed "non-resident"  by an authorized dealer in order to return disposal
proceeds and dividends to their country of origin. A reco rd of funds introduced to South Africa should be kept.
Completion of a form that discloses the sources and the purpose of the funds is also required for all remittancesto South Africa that exceed R50,000.
There are no controls over the removal of investment  income or capital gains by non-residents. However,
repayment of foreign loans by South African residents requires prior approval. Dividends may be paid to non-
residents without the approval of the SARB. Dividends paid to non-residents pursuant to deregistration or
liquidation are transferable against documentation confirming this fact.
Loans from foreign residents to South African residents require the prior approval of the SARB. The approval
procedures take two to three weeks. All loans from outside the Common Monetary Area (SACU countries
except Botswana), require prior exchange control approval . Approval is normally granted provided the loan is
for a minimum of one month, and a market interest rate is charged.
A South African company that is 75% or more foreign owned, is known as an "affected company" and the
amount that it may borrow or have access to from South Af rican lenders is restricted. The borrowing or facility
limit, known as the local financial assistance limit, is based on a formula. For companies that are 100% foreign
owned, the local financial assistance limit is 100% of the effective capital of the South African company.
Effective capital includes paid-up equity capital, prefer ences shares, undistributed earned profits, shareholders'
loans from abroad, and in certain instances,  the hard core shareholders' trade credit.
The SARB does not permit the remittance of profits or repayments of loans where, as a result of the remittance,
the local financial limit will be exceeded, and will re quire local financial assistance to be reduced before
remittance.
Royalties, licence and patent fees to non-residents, where no local manufacturing is involved, require the
approval of the SARB. Manufacturing royalties (as opposed to sales/marketing royalties) are subject toapproval by the Department of Trade and Industry (DTI);   the DTI communicates its decision to the licensee or
the Executive Control Department where applicable, whic h will enable a bank to directly transfer the royalty
payments. Current account payments (e.g. management fees and other fees for services provided), may be paidby authorized dealers on production of an invoice, provided that such payments are not calculated as a
percentage of sales, profits, purchases or income.
Source: DTI (2000),  The Investor's Handbook .
17. FDI inflows have been relatively diversified in terms of sectoral distribution. Despite South
Africa's large mineral reserves (Chapter IV(3)), non-mining activities drew more than 70% of FDI
inflows in 2000, with finance and services receiv ing almost 40% of total FDI, and manufacturing
accounting for 26.4% (Chart I.3). This suggests that natural resources are not as important in
attracting FDI as other factors, such as access to regional markets (e.g. SACU and SADC), which playa key role.
14
                                                     
14 IMF (2002a).WT/TPR/S/114/ZAF Trade Policy Review
Page A4-224
Chart I.3
Foreign direct investment into South Africa, 1997 and 2000
Per cent
(a) By origin
(b) By sector
Total FDI: R328,859 millionUnited
Kingdom
45.3Asia
 6.6
United States
15.0Other
3.9
Other Europe
16.5
Germany
12.6
Mining and 
quarrying
4.4
Manufacturing
42.5Finance, insurance, real 
estate and business 
services
35.6Other
0.8
Transport, storage 
and 
communication
2.6Wholesale and retail 
trade catering and 
accomodation
10.1
Source : South African Reserve Bank, Quarterly Bulletin , June 1999 and June 2002.1997
United
Kingdom
73.9Asia
 3.1 United States
6.0Other
2.0
Other Europe
9.3
Germany
5.8
Total FDI: R82,463 millionMining and 
quarrying
27.8
Manufacturing
26.4Finance, 
insurance, real 
estate and 
business 
services
39.3Other
0.3
Wholesale and retail 
trade catering and 
accomodation
3.6Transport, 
storage and 
communication
6.52000SACU-South Africa WT/TPR/S/114/ZAF
Page A4-225
18. The EU has been by far the largest investor in South Africa, accounting for about 90% of total
FDI inflows in 2000 (Chart I.3). Investment from  the UK accounts for almost three-fourths of the
total. The United States and Asian countries complete the list of investors.
19. In terms of the forms of FDI, a large part is investment in existing assets. Cross-border
mergers and acquisitions are increasingly prominent, representing more than 60% of the total.15 The
restructuring and divestiture of state assets continue to be important levers to attract FDI, as evidencedby the partial sales of Telkom in 1997, and South African Airways in 1999. "Greenfield" investment
is relatively uncommon in South Africa.
16
20. Outward FDI by South Africa, particularly to ot her African countries, has increased in recent
years. The Government is encouraging South African  firms to invest in the SADC countries, in an
effort to foster industrialization within the region (Chapter IV(4)). Total outward direct investment bySouth Africa more than doubled between 1997 and 2000, from R 113.2 billion to R 244.7 billion.
(4) O
UTLOOK
21. Based on recent performance and despite the global slowdown, the Government revised its
forecast for GDP growth for 2002 from 2.3% to just over 3%, and expects growth to accelerate to
3.5% in 2003, 3.7% in 2004, and 3.9% in 2005.17 The economy's greater resilience to external shocks
reflects in part the improvement of its competitiveness that has resulted from liberalization undertaken
since the early 1990s. Yet, South Africa needs to move to a higher level of GDP growth in order to
reduce unemployment. To this end, it needs to continue its reform process, which includes the
restructuring of state-owned enterprises (Chapter III(4)(ii)).
22. Relatively high real interest rates and the prospect of rising inflation also pose risks to growth
in the short and medium terms. The higher-than-expected inflation rate in 2002 forced the SARB to
raise interest rates four times during the year, and the inflation targets of 3-6% for the coming yearsseem very difficult to attain  without jeopardizing growth performance.  Maintaining a prudent fiscal
stance and persevering with efforts to reduce in flation could help preserve gains in external
competitiveness, stabilize the exchange rate, and ease pressure on interest rates. In addition, the
economy would be more efficient if further trade liberalization efforts were made to, inter alia ,
simplify the tariff structure, and reduce the high level of tariff protection for certain labour-intensiveindustries, most notably textiles and clothing.
23. The HIV/AIDS pandemic will continue to have far-reaching economic and social
consequences.
18 In 2000, 4.2 million individuals, or about 10% of the total population, were infected
with this disease.19 It is estimated that South Africa now accounts for about 12% of the world's
HIV-positive individuals.20 The high prevalence of this pandemic has seriously affected the age
                                                     
15 Some recent mergers took place, and acquisitions were made by Petronas' in Engen, Dow Chemicals'
in Sentrachem, and Coca Cola's in SA Bottling.
16 Greenfield investment refers to investment in an area where no other company or production
operations currently exist.
17 Financial Times , 30 October 2002.
18 Based on the current demographic projections, South Africa's labour force will decline by about 18%
over the next 20 years. Recent empirical studies proj ect that, by 2010, real GDP will be between 8% and 17%
below the level that would be attained in a no-HIV/AIDS scenario (IMF, 2001b).
19 In 1999, around 20% of the most economically active segment of South Africa's population (ages
15-49) were infected.  This is the fourth highest in the world; Botswana was first (35.8%), followed bySwaziland (25.2%), and Lesotho (23.6%); Namibia was fifth (19.5%). The adult HIV prevalence rate for theworld as a whole was 1.1% in the same year. UNAIDS (2001).
20 UNAIDS (2001).WT/TPR/S/114/ZAF Trade Policy Review
Page A4-226
structure, and has reduced the annual growth rate of the population from 1.9% in 1997 to 1% in 2001,
and life expectancy from 54.7 years in 1997 to 47.8 in 2001.21 The South African Government
strategy to slow the spread of HIV/AIDS encompasses prevention, treatment, legal assistance, and
monitoring. Efforts to educate the young are bearing fruit, with the prevalence among pregnant
women under 20 dropping from 21% in 1998 to 15.4% in 2001. However, infection levels are rising
among the over-20s.22 The 2002/03 budget foresees an increase in direct HIV/AIDS-related
expenditure from 0.1% of GDP in that fiscal year to nearly 0.2% of GDP in 2004/05.23 Furthermore,
in mid-April 2002, the authorities initiated a major policy shift by announcing that anti-retroviral
drugs would be made generally available, via the South African public health system.24
24. South Africa's economic outlook is to be linked with the goals and objectives contained in the
New Partnership for Africa's Development (NEPAD) , led jointly by South Africa and other African
partners. Indeed, NEPAD, released in October 2001, is an African-led initiative that proposes
solutions, such as good governance, macroeconomic stability, curbing corruption, and promotion of
intra-African trade "to eradicate poverty and place African countries, both individually and
collectively, on a path of sustainable growth and development, and thus halt the marginalization of
Africa in the globalization process". NEPAD is also a call for a new "relationship of partnershipbetween Africa and the international community". So me of NEPAD's main goals are: to achieve and
sustain an average GDP growth rate of 7% per annum for the next 15 years; to reduce the proportion
of people living in extreme poverty by half between 1990 and 2015; to enrol all children of school age
in primary schools by 2015; to make progress towards gender equality and empowering women by
eliminating gender disparities in the enrolment in primary and secondary education by 2005; to reduce
infant and child mortality ratios by two thirds between 1990 and 2015; to reduce maternal mortality
ratios by three quarters between 1990 and 2015; to provide access for all who need reproductivehealth services by 2015; and to implement national strategies for sustainable development by 2005, so
as to reverse the loss of environmental resources by 2015.
                                                     
21 World Bank (2002).
22 The Guardian , 27 November 2002.
23 The Guardian , 27 November 2002.
24 Financial Times , 18 April, 2002.SACU-South Africa WT/TPR/S/114/ZAF
Page A4-227
II. TRADE AND INVESTMENT REGIMES
(1) P OLICY FORMULATION AND IMPLEMENTATION
1. There have been no major changes to the institutional framework related to trade policy in
South Africa since its last Trade Policy Review in  1998. The Department of Trade and Industry (DTI)
continues to formulate and coordinate the country's trade and industrial policies.25  Initiatives on trade
and investment may also come from other depart ments and agencies, such as the Departments of
Finance, Agriculture, Health, Mineral and Energy Affa irs, as well as from the South African Reserve
Bank. Proposals and recommendations to the DTI may also come from the private sector, including
through the National Economic Development and Labour Council (NEDLAC) , the Board on Tariffs
and Trade (BTT), and the Industrial Development Corporation (IDC). The IDC and Parliamentary
Committees assist the DTI in carrying out periodic reviews and assessments of trade policies.
2. During the past few years, the DTI has been transformed with a view to, inter alia ,
modernizing and streamlining South Africa's trade and industrial development institutions, and
achieving the following key strategic objectives26:
− developing the economy;
− contributing to the international competitiveness of manufacturing industries;
− promoting small, micro, and medium-sized enterprises (SMME);
− promoting economic empowerment of previously disadvantaged persons ("black
economic empowerment" (BEE));
− reducing inequality and poverty;
− promoting organizational efficiency and efficacy; and
− contributing to the development of the SADC region and Africa as a whole.
3. To this end, the DTI has implemented the modernization of the BTT through the newly
created International Trade Administration Commission (ITAC). The ITAC will align the BTT with
the provisions of Article 11 of the 2002 SACU Agr eement, which lays down the functions and powers
of the new SACU Tariff Board.27 The DTI has also created new institutions such as The Enterprise
Organisation (TEO), Trade and Investment Sout h Africa (TISA), and Companies and Intellectual
Property Registration Office (CIPRO).  TEO was launched in January 2001; its central function is to
provide incentives and support for sustainable enterprises in South Africa, with particular emphasis on
new entrants, SMMEs, and high growth activities (aqua-culture, tourism, agri-processing, information
and communication technology, cultural industries, high-value agricultural projects and bio-
technology).
4. TISA replaced Investment South Africa (ISA ) in August 2000, as the country's trade and
investment promotion agency. TISA's core functions are to promote investment, particularly foreign
direct investment (FDI), and export developmen t in South Africa.  It also has the mandate to
coordinate investment promotion in collaboration with the provinces, to act as a one-stop shop for
potential investors, and to market projects to both domestic and foreign investors.
5. CIPRO was formed in July 2002 by the merging of the South African Companies Registration
Office (SACRO), and the South African Patents and Trademarks Office (SAPTO).  Its purpose is to
                                                     
25 South Africa's overall institutional framework was described in detail in the previous TPR of SACU
(WTO, 1998).
26 DTI(2001a).
27 DTI(2001a).WT/TPR/S/114/ZAF Trade Policy Review
Page A4-228
regulate and service business entities effectively in order to gain investor confidence, and to stimulate
economic growth. CIPRO is in charge of the registration of companies, business information,
formulation of policy relating to companies, and protection and registration of intellectual property
rights (IPR) in four domains: trade marks, patents,  copyright, and design (Chapter III(4)(iv)). CIPRO
is also responsible for creating awareness of IPR in South Africa, and harmonizing the country's IPR
legislation with international laws.
6. The International Trade Administration Commission (ITAC) will replace the Board on Tariffs
and Trade (BTT), in accordance with the International Trade Administration Act. This Act was signed
into law in January 2003, and will come into effect during the first half of 2003. ITAC will continue
BTT functions on issues such as customs duties, duty and tax concessions, import and export controls,
and administering anti-dumping, safeguard, and countervailing measures. However, ITAC (as SouthAfrica's National Body in terms of Article 14 of the 2002 SACU Agreement), will also be responsible
(on the South African side) for SACU-related issues, such as customs, import and export control, and
contingency trade remedies.
7. At the national level, DTI chairs a sub-committee on economic development, which included
representatives from the Ministry of Foreign Affairs and other relevant departments.  The sub-committee formulated a global economic strategy, and identified five programmes covering
investment, exports, tourism, financ e, and global economic relations.
(2) T
RADE AGREEMENTS
8. South Africa is an original Member of the WTO.  Table II.1 summarizes South Africa's
notifications to the WTO. South Africa attaches great importance to the Doha Development Agenda
(DDA), which, in its view, offers WTO Members an opportunity to amend the imbalances and
inequities existing in current WTO Agreements, and gives fresh impetus to addressing developmentalissues (Main Report, Chapter II(5)).
Table II.1
Status of South Africa's selected notification requirements to WTO, as of January 2003
WTO AgreementDescription of
requirementPeriodicity Most recent notification Comment
Agriculture (Article 18.2) Domestic support Annual G/AG/N/ZAF/44
21 October 2002Domestic support commitments
for 2000.
Agriculture (Articles 10 and18.2)Export subsidies Annual G/AG/N/ZAF/43
8 October 2002Export subsidies during 2001.
Agriculture (Article 18.2) Tariff quotas Once, then
changesG/AG/N/ZAF/45
15 January 2003Tariff and other quota
commitments during 2002.
Agriculture (Article 5.7) Special safeguard
provisionsAnnual G/AG/N/ZAF/41
20 September 2002No special agricultural safeguards
were invoked in 2001.
Agriculture (Article 16.2) Decision on
possible negativeeffects of the
reform programmeon LDC-NFIDCNot specified G/AG/N/ZAF/42
20 September 2002Technical and financial assistance
was provided to the DemocraticRepublic of Congo, Malawi,
Angola, Zambia, Algeria, andCuba.
Implementation ofArticle VI of the GATT1994 (Article 18.5)Laws and
RegulationsOnce, then
changesG/ADP/Q1/ZAF/1
14 November 2000Copies of the relevant Acts.
Implementation of
Article VI of the GATT1994 (Article 16.4)Anti-dumping
actions takenSemi-annual G/ADP/N/92/ZAF
8 August 2002Anti-dumping actions taken
during 1 January-30 June 2002.
Import LicensingProcedures (Article 7.3)Questionnaire on
import licensingproceduresAnnual G/LIC/N/3/ZAF/4
17 September 2002No changes in import licensing
procedures since previous year.
Table II.1 (cont'd)SACU-South Africa WT/TPR/S/114/ZAF
Page A4-229
WTO AgreementDescription of
requirementPeriodicity Most recent notification Comment
Sanitary and Phytosanitary
Measures (Article 7,
Annex B)SPS to be notified
promptlyOnce, then
changesG/SPS/N/ZAF/13
1 July 2002Microbiological specifications for
honey bush and rooibos teas, and
changes to the total viable colony
count for bottled water.
Safeguards (Article 11.2) Phasing out of
safeguards underArticle 11.1(B)End of June
1995G/SG/N/5/ZAF
18 June 1996Timetables for phasing out.
Safeguards (Article 12.6) Laws and
RegulationsOnce, then
changesG/SG/N/1/ZAF/1
6 December 1995Copies of the relevant Acts.
Safeguards (Article 12.7) Pre-existing
Article XIX
measuresFebruary
1995G/SG/N/2/ZAF
27 March 1995No measures were maintained.
Safeguards (Article 12.7) As Article 11.1
measuresFebruary
1995G/SG/N/3/ZAF
25 April 1995A list of products was provided.
Subsidies and
Countervailing Measures
(Article 25.1) and GATT
1994 (Article XVI:1)Specific subsidies Annual G/SCM/N/25/ZAF
23 June 1997List of notifiable subsidies.
Subsidies and
Countervailing Measures
(Article 25.11)Countervailing
actions takenSemi-annual G/SCM/N/87/ZAF
26 September 2002Countervailing duty actions
during 1 January- 30 June 2002.
Subsidies andCountervailing Measures
(Article 32.6)Laws and
RegulationsOnce, then
changesG/SCM/N/1/ZAF/1
8 December 1995Copies of the relevant Acts.
Technical Barriers to Trade
(Article 10.6)Information about
technicalregulations,
standards, and
conformity
assessmentOnce, then
changesG/TBT/N/ZAF/10-21
April-November 2002various regulations.
Textiles and Clothing
(Articles 2.8 and 2.11)Transitional
safeguards1997 G/TMB/N/307
24 November 1997A list of products to be integrated
in Stages I and II was provided.
GATT 1994
(Article XVII:4(a) and
Understanding on theinterpretation of
Article XVII:1)State trading
enterprisesAnnual G/STR/N/8/ZAF
18 March 2002No state-trading enterprises.
GATT 1994 (Article VII -
22.2) Customs ValuationLaws and
regulationsOnce, then
changesG/VAL/N/1/ZAF/1
30 August 1996Laws and regulations to conform
with the Customs Valuation
Agreement.
GATS (MFN exemptions) Review of MFN
exemptionsNot specified S/C/W/187
14 December 2000MFN exemptions by South Africa
on road transportation and
financial services.
TRIMs (Article 6.2) Publications about
TRIMsNot specified G/TRIMS/N/2/Rev.9
28 September 2001TRIMs notified in 1995 under
Article  5.1 have been phased out.
TRIPS (Article 27.3(b)) Patentability Not specified IP/C/W/125/Add.16 and
Corr.1
21 April and 25 May 1999Plant and animal inventions;  and
plant varieties.
TRIPS (Articles 41 to 61) Enforcement of
intellectual
property rightsNot specified IP/Q4/ZAF/1
30 April 1999Review of legislation on
enforcement.
TRIPS (Article 63.2) Laws and
RegulationsOnce, then
changesIP/N/1/ZAF/1
16 April 1996Copies of the relevant Acts.
Source: WTO documents.
9. South Africa participates in the Southern  African Development Community (SADC), of
which all SACU countries are members (Main Repor t, Chapter (II)(4)).  South Africa has trade
surpluses within both SACU and SADC.  It considers such growing trade surpluses as economicallyWT/TPR/S/114/ZAF Trade Policy Review
Page A4-230
unsustainable in the longer term.28 South Africa, therefore, in partnership with the other SADC
members seeks to promote industrialization in the region.  Elements of this strategy include:
implementing the SADC Trade Protocol to foster rapid and significant market access to regional
exports; linking regional trade, development, and industrial restructuring to reflect current and
dynamic comparative advantages across the region; promoting coordinated infrastructure and
resource-based industrial development through spatial development initiatives (SDIs)(Chapter III(3)(iv)); encouraging South African firms to invest regionally through the relaxation of
foreign exchange controls on capital destined for the region; and promoting regional trade facilitation,
strengthening customs control and administration, and eliminating non-tariff measures.
29
10. In addition to its regional agreements, South Afri ca is involved in a series of bilateral trade
arrangements, including the Trade, Development, and Cooperation Agreement (TDCA) with theEuropean Union.
11. South Africa's membership of overlapping regional and bilateral arrangements with different
geographical coverage, trade liberalization agenda, trading rules (such as on non-tariff measures,
phase-in periods, and rules of origin), and goals, makes its trade regime very complex. South Africa's
trading partners receive different access conditions to its market depending upon which agreementthey are in, and the stage of implementation of the agreement by the partners.  The same applies to
South Africa's exports to these markets.  This may distort trade and incentive patterns in an
unpredictable manner, and could result in South Africa taking inconsistent obligations at the regional
level.  A similar situation seems to apply to other SACU members.
(i) The Trade, Development, and Cooperation Agreement (TDCA)
12. Europe has historically been South Africa's dominant trading partner (Chapter I(3)(i)).
Furthermore, much of the FDI into South Africa comes from the EU (Chapter I(3)(ii)).  Thismotivated the conclusion of the Trade, Devel opment and Cooperation Ag reement (TDCA) between
South Africa and the EU in October 1999. The agreement will continue to be implemented
provisionally until its ratification by all fifteen member states of the EU.
30 The TDCA provides for
asymmetrical trade liberalization between the two parties to form a free-trade area by 2012.
South Africa will liberalize around 86% of its imports from the EU during a 12-year transitionalperiod, while the respective figures for the EU are 95% in ten years, starting from 1 January 2000,
when the TDCA came into force. Within these transitional periods, the bulk of industrial products will
be liberalized during the first part of the tariff phase-down period. The EU is scheduled to complete
most of its obligations after 3-6 years. In the case of South Africa, sensitive products, comprising 16%
of its imports from the EU, will be fully libera lized only at the end of the phase-down period.
13. To complement the TDCA, a Wines and Spirits Agreement was signed on 28 January 2002,
and entered into force provisionally on 1 January 2002, subject to ratification by South Africa. The
objective of this agreement is to create favourable conditions for "the harmonious development of
trade and the promotion of commercial cooperation in the wines and spirits sector". The agreement
applies to wines and spirits under HS headings 22.04 and 22.08. The TDCA will be complemented bya fisheries agreement, which remains pending due to "irreconcilable mandates between South Africa
and the EU".
31
                                                     
28 DTI (2001b).
29 DTI (2001b).
30 As at January 2003, the Agreement had been ratified by Denmark, Finland, Germany, Ireland,
Netherlands, and Sweden.
31 Department of Foreign Affairs of South Africa, Press Release , 3 June 2002.SACU-South Africa WT/TPR/S/114/ZAF
Page A4-231
14. The TDCA covers around 83% and 86.5% of Sout h Africa's agriculture and industrial sectors,
respectively (based on 1994-96 trade volumes); the corresponding figures for the EU are 61.4% and
99.98%. To protect vulnerable and sensitive sectors on both sides, and also within the Southern
African region, a number of products (at the HS eight digit level) have been kept outside the ambit of
the free-trade agreement, and are to be reviewed periodically. On the South African side, 10.9% of
total imports from the EU in terms of average 1994-96 trade figures have been excluded.  Productsinclude beef and beef products, some pork and pork products, wheat and wheat products, barley and
barley products, sugar, some dairy products, petroleum oil, motor components, and passenger
vehicles. On the EU side, 3.4% of total imports from South Africa in terms of average 1994-96 trade
figures have been excluded.  These cover some live animals, meats, dairy products, sugar, rice, some
cut flowers, fresh and preserved fruits and vegetables, cereal, some fish, and unwrought aluminium.
15. Certain products are subject to only partial liberalization (i.e reduced customs tariffs rather
than the zero rate, or preferential tariff quotas).  In addition to South Africa's commitment to liberalize
86.5% of its industrial imports from the EU, 2.9% will be partially liberalized. Product categories
include footwear and leather (end rate 10%-20%), some automotive parts (end rate 6%-11%), several
textiles and clothing items (end rate 5%-20%), and tyres (10%-15%). On the EU side, an additional13% of agricultural products will be partially liberalized, on top of the 61.4% subject to full
liberalization. These include several cut flowers such as roses, orchids, chrysanthemums, proteas
(2,400 tons per year, 50% of the duty); strawberries (250 tons per year, 50% of the duty); several
canned fruits (60,000 tons per year, 50% of the duty); several fruit juices (1,400 tons per year, 50% of
the duty); and wines (32 million litres per year, 50% of the duty). A further 11 tariff lines covering
cheese and curd are to be partially liberalized (5,000 tons per year, 50% of MFN duty); they
represented less than 1% of total imports from the EU in 2000.  These partial liberalizations will bereviewed at a later date.
16. The TDCA provides for detailed rules of origin. Products are of South African or EU origin if
they are "wholly obtained" or have been sufficiently  worked or processed in these countries. An annex
to the protocol on the rules of origin lists the rules for determining whether a product has been
sufficiently worked or processed.  While they differ from product to product, the rules fall into sixbroad categories: (i) the material used must undergo a change of tariff heading under the Harmonized
System; (ii) there must be sufficient value added in the EU or South Africa (percentages involved may
vary from product to product); (iii) for some products (e.g. textiles), the rules define the production
process to be followed (a double transformation must be effected; (iv) in some cases the rules require
that only originating materials are used; (v) in certain  situations a combination of several of the above
conditions apply; and (vi) for several products, two alternative rules are given.
17. Bilateral cumulation is applied between South Africa and the EU.
32 Diagonal cumulation is
applied for materials originating in the ACP States. When diagonal cumulation is applied, the
allocation of origin is based upon the value added.33 Working or processing carried out in the SACU
is considered as having been carried out in South Africa, when further worked or processed there (full
                                                     
32 When applying the value added rule to a South African product, the value of any EU materials used
is counted to determine whether it meets the origin criteria. The same rule applies when defining the origin of
EU products that include South African inputs.
33 Goods that include material from other ACP countries are also defined as originating in South
Africa, and therefore eligible for preferential access to th e EU market, provided the value added in South Africa
exceeds the value of the ACP materials.WT/TPR/S/114/ZAF Trade Policy Review
Page A4-232
cumulation).34As a result, the market for BLNS components in South African production is likely to
increase.
18. The TDCA also includes a value tolerance rule, which allows for exceptions to be made to the
normal rules of origin. Products are considered as originating in South Africa even if the origin
criteria have not been met for some of the material used. A tolerance of 15% was agreed for South
Africa35, with the exception of fishery products, tobacco products, alcohol and spirits, for which the
maximum is 10%, and textile products, which have specific tolerance rules. South Africa has the right
to ask for a derogation from rules of origin requirem ents that it finds difficult to comply with;  such
derogation is limited in time as well as in quantity.36
19. With regard to the possible impact of the TDCA on South Africa’s SACU partners, some
studies suggest that BLNS exporters to the EU could face increased competition since the TDCA willimprove access to the EU market for South African exporters.  Products of interest to BLNS that are
most likely to be affected by the TDCA are, inter alia , preserved fish, grapes, textiles and clothing.
37
A safeguard clause can be invoked in case increased imports from the EU would seriously threaten
the economic situation in BLNS countries.  On the other hand, as South Africa reduces duties and
tariffs on EU goods, consumers and companies in the BLNS countries will have access to lower-costproducts and inputs. Botswana, Namibia, and Swazil and have special trade protocols with the EU on
beef and sugar.  This will remain unaffected, since beef and sugar are excluded from the TDCA.
These trade protocols will be renegotiated within the Cotonou framework.
20. The SADC trade protocol makes it clear that member countries cannot offer trade benefits to
a third country without extending them immediately to all SADC members. Thus, any trade
concessions granted by South Africa to the EU under the TDCA have to be extended to all SADC
members. In market segments where SADC states have a particular interest in the South Africanmarket, South Africa offered to open its market fi rst to its SADC neighbours before extending similar
preferences to the EU (the so-called SADC preferen ce built into the TDCA).  SADC countries, other
than the BLNS, retain their own customs tariffs, which apply fully to products coming from the EU:
SADC is to be a free-trade area and not a customs union, thus customs revenue for SADC members
will not be substantially and directly affected by the TDCA.
(ii) Other trade agreements
21. South Africa has a bilateral trade agreement with Zimbabwe, and grants non-reciprocal
preferential treatment to Malawi, and to a list of products from Mozambique.
38 The arrangement with
Malawi, a member of both COMESA and SADC,  was concluded in 1990. Under the arrangement,
South Africa allows duty-free import to its market of all goods grown, produced or manufactured inMalawi, subject to a minimum domestic value-added content of 25%. Preferential quotas apply to
                                                     
34 Products are defined as being of South African origin if the final stage of processing is undertaken in
the country, regardless of the value added. Final processing carried out in Botswana, Lesotho, Namibia, and
Swaziland (BLNS) is not regarded as conferring origin. South African clothing manufactures can use fabrics
from BLNS countries and still claim the South African origin for the final product.
35 Under standard EU rules, a tolerance of up to 10% of the value of the final product is allowed  to
other preferential partners, with the exception of the textile sector, which has its own rules.  See EuropeanCommission (1999) .
36 Many of the EU's other preferential agreements do not provide for such derogation (European
Commission, 1999).
37 UK  Institute of Development Studies and Botswana Institute for Development Policy Analysis
(1998).
38 For a description of the preferential tariff treatme nt that South Africa gives to certain products from
Mozambique see WTO (1998).SACU-South Africa WT/TPR/S/114/ZAF
Page A4-233
some products, such as tea (10,000 tonnes annually). The arrangement may be terminated by either
party with 12-months written notice.  It contains  anti-dumping and countervailing provisions. The
arrangement raised some concerns recently, when Malawian garment and bed linen exporters faced
difficulties on the South African market based on allegations that manufacturers were not meeting the
25% rule of origin; this rule had become onerous for them to prove.39
22. South Africa's trade agreement with Zimbabwe, a member of both COMESA and SADC,
dates from 1964, and is subject to various conditions: the duty-free regime or preferential tariff quotas
apply to items including dairy products, potatoes, birds, eggs, some cereals, oil seeds and oleaginous
fruits;  and live horses, asses, mules, cotton waste, metal bedsteds are also duty-free; and specified
types of woven fabrics of cotton, for example, are subject to concessional tariff rates, when they meet
specified levels of Zimbabwean content: 75% in most cases. Concessional customs duties are grantedby Zimbabwe on certain products exported by South Africa.
(3) I
NVESTMENT FRAMEWORK
23. The institutional framework governing investment in South Africa has not changed since
1998. South Africa does not have a specific investment law;  sector-specific acts establish the
conditions for foreign and domestic investment (Table II.2). A variety of schemes provide incentivesto investors (Chapters III(3) and IV(4))). South Af rica actively encourages investment by non-resident
persons and companies. According to the authorit ies, national treatment applies to all foreign
investors, who can repatriate the proceeds and earnings of their investments after payment of taxes.
In an effort to foster FDI in flows into the country, South Africa has recently announced a policy
framework for accelerating the privatization proc ess through the restructuring of state-owned
enterprises (Chapter III(4)(ii)).
24. Some restrictions still apply to foreign comp anies in South Africa. For example, a foreign
bank establishing a branch may be required to employ a minimum number of local residents to obtain
a banking licence, and may be obliged to have a minimum capital base (Chapter IV(5)(ii).  Foreign
companies are required to register as external companies before immovable property can be registered
in their name.
40  Although significant progress has been made in the liberalization of exchange
controls in South Africa since 1994, some foreign ex change restrictions remain (Chapter I, Box I.1).
                                                     
39 More specifically, at least 25% of the production cost of goods must be Malawian materials and
labour, and the last production or manufacturing process must have been in Malawi (Articles 2 and 6 of theMalawi/South Africa Trade Agreement). The definition of "value added" used excludes profit, as well asadministrative, general, and other expenses.  See Coughlin and Undenge (2001), p.3. However, because
Malawi's clothing and bed linen rely substantially on imported inputs from Asia, rules of origin can be an
important constraint on its exports under the bilateral agreement.
40 A company incorporated outside South Africa is classified as an external company and its local
business is colloquially known as a branch.  A branch is in most respects subject to the same regulations as aSouth African company (U.S. Department of State, 2002).WT/TPR/S/114/ZAF Trade Policy Review
Page A4-234
Table II.2
Trade-related legislation in South Africa, 2002
Area Legislation Entry into force
Foreign trade;  customs and excise duties and
other charges;  contingency measures;  tariffand tax concessions; rules of origin;  clearanceof goods;  and customs valuationCustoms and Excise Act (Act 91), and various amendments 1964
Trade and industry; customs duties and
contingency measures;  tariff and taxconcessionsBoard on Tariffs and Trade Act (Act 107), as amended 1986
Value-added tax Value-added Tax Act 1991
Import and export controls Import and Export Control Act (Act 45)
Fertilizers, Farm Feeds, Agricultural Remedies and Stock
Remedies Act (Act 36)
Explosives Act and Regulations (Act 26)Agricultural Pests Act (Act 36)Meat Safety Act (Act 40)Diamonds Act (Act 56)1963
1947
1956
198320001986
Government procurement State Tender Board Act (Act 86)
Public Finance Management Act (Act 1)Preferential Procurement Policy Framework Act (Act 5)1968
19992000
Technical standards and regulations Standards Act (Act 29)
Occupational Health and Safety Act (Act 85)Liquor Products Act (Act 60)Genetically Modified Organisms Act (Act 15)Agricultural Products Amendment Act (Act 63)Tobacco Products Control Amendment Act (Act 12)Meat Safety Act (Act 40)Animal Disease Act (Act 35)1993
1993198919971998199920001984
Competition Competition Act (Act 89) 1998
Intellectual property rights Merchandise Marks Act (Act 17)
Performers' Protection Act (Act 11)Patents Act (Act 57)Copyright Act (Act 98)Trade Marks Act (Act 194)
Designs Act (Act 195)
Counterfeit Goods Act (Act 37)Intellectual Property Laws Amendment Act (Act 38)Copyright Amendment Act (Act 9)1941
1967197819781993
1993
199719972002
Agriculture Agricultural Products Standards Act (Act 119)
Liquor Products Act (Act 60)Livestock Improvement Act (Act 25)1990
19891977
Mining Mineral and Petroleum Resources Development Act (Act 28)
Minerals and Energy Laws Rationalization Act (Act 47)2002
1994
Telecommunications Telecommunications Act
Telecommunications Amendment Act (Act 64)1996
2001
Financial services Banks Act (Act 94)
Financial Services Board Act (Act 97)Unit Trusts Control Act (Act 54)Financial Markets Control Act (Act 55)
Stock Exchange Control Act (Act 1)
Mutual Banks Act (Act 124)SARB Act (Act 90)Financial Institutions (Protection of Funds) Act (Act 28)Anti-Money Laundering Act1990
199019811989
1985
1993198920012001
Transport South African Maritime Safety Authority Act (Act 5)
South African Civil Aviation Authority Act (Act 40)National Roads Act (Act 54)
National Land Transport Transition Act (Act 22)1998
19981971
2000
Tourism Tourism Act (Act 72), as amended 1993
Source: Information provided by the South African authorities.SACU-South Africa WT/TPR/S/114/ZAF
Page A4-235
25. Foreign investors require a business permit to establish a company in South Africa.41  T h e
permit is issued to prospective investors after the Department of Home Affairs (DHA) has received
documentary motivation and evidence of the applicant's intention to invest in South Africa.
Processing times range from six to eight weeks.
26. Under the authority of DTI, the TISA is in ch arge of promoting South Africa as an investment
destination. TISA focuses on activities with greatest  growth potential: chemicals-fine and speciality
chemicals, polymers, and pharmaceuticals; minerals, and ferrous and non-ferrous metals;
agri-processing, meat, fruit, and vegetables; textiles and clothing, and leather; auto industry;
technology and research; and information and communication technology. TISA has set a target of
R 4.7 billion (US$470 million) in foreign direct investment (FDI) for 2003, up from R 4 billion
(US$ 400 million) in 2002.
27. At the same time, South Africa is promoting outward investment, particularly in the SACU
and SADC areas, in an effort to promote indu strialization in the region. With this aim, the
Government is encouraging South African firms to invest regionally through the relaxation of foreign
exchange controls on capital destined for the region.
(4) T ECHNICAL ASSISTANCE
28. As SACU's most diversified economy, South Africa's technical assistance needs are different
from those identified for the other members.  South Africa benefits from a relatively sophisticated
trade policy formulation process, and a strong understanding of the mechanics of WTO Agreements.
Therefore, its needs regarding implementation of the WTO Agreements, and trade negotiations are
limited.
(i) Implementation of WTO Agreements
29. In tariff reforms, capacity building could fo cus on helping the Government to assess the
degree of anti-export bias resulting from the current ta riff structure, and identifying the path of future
tariff cuts.  In certain subsectors, notably the automotive subsector, tariff reforms will be necessary to
avoid the creation of anti-export biases through a combination of high tariffs and reduced export
incentives:  the degree of anti-export bias decreases as tariff protection is lowered42; and tariff
reductions to date have been associated with improvements in dynamic efficiency.43  I n  i n c e n t i v e
schemes, assistance would focus on developing a phase-out strategy, which should avoid the welfare-
reducing effects associated with their entrenchment.
30. South Africa's training needs regarding implementation of sanitary and phytosanitary
regulations include: pest risk analysis for import of plants, plant products, and regulated articles;
conducting surveys for the interception and control of quarantine pests, which will harmonizephytosanitary control in the region; competen cies on good agricultural practices (GAP), good
manufacturing practices (GMP) and hazard analysis and critical control point (HACCP) auditing; and
laboratory techniques relating to food safety.  Systems and infrastructure needs include developing
systems for monitoring of mycotoxins (which tend to affect grains, the main product of poor rural
households), and an integrated system to reduce and address the possibility of contamination; and
                                                     
41 Nationals of the United States, European Union, and Canada do not require visas for business
purposes. All other foreign nationals who apply for a business visa must apply through South Africa's missionsabroad (DTI, 2000).
42 Tsikata (1999).
43 Subramanian and Jonsson (2001).WT/TPR/S/114/ZAF Trade Policy Review
Page A4-236
equipment for residue analysis for food safety reason s.  Such assistance will contribute to improving
the quality of South and southern Africa's agricultural exports and to alleviate poverty.
31. The South African Government has also noted to the need for assistance to develop
harmonized phytosanitary measures and risk management to ensure effective regulatory and control
services in the SADC region.  The Government sees such region-wide capacity building as important
for strengthening regional trade integration.
(ii) Trade negotiations
32. South Africa has had long experience of participation in the WTO. However, the interaction
between negotiations at various levels (regional, sub-regional, bilateral, and multilateral) will be a
challenge to its capacity to deal with them all, including negotiations under the Doha Development
Agenda.
33. Expanded export opportunities in certain services subsectors, through negotiated
commitments, could contribute to the diversification of the country's export base.  The main
subsectors of interest include financial services, telecommunications, and energy.  Capacity building
for negotiators in these subsectors at the regional level would enable the development of strategies
and coordinated positions for negotiations.
34. A large part of the capacity-building agenda in relation to negotiations would include efforts
to strengthen the linkage between the domestic policy reform process and the negotiations process, so
that negotiated commitments could serve to put domestic reforms on a predictable and stable footing.
This applies most particularly to various services subsectors, where reforms have already been
initiated or are about to be initiated, including those refered to as being of export interest.
(iii) Supply-side constraints and integration of trade into development plans
35. South Africa faces a lower incidence of supply-side constraints than many of its regional
neighbours. In the context of its current Medium Term Expenditure framework, South Africa has
undertaken efforts to improve the provision of key infrastructure-related services such as roads and
electricity to certain rural areas.  The Governme nt established industrial development zones for
export-oriented industries, which combine the provision of infrastructural facilities with export
incentives.  Nevertheless, overall investment rates in South Africa are lower than might be expected.One major constraint identified by respondents to business surveys is the relatively narrow pool of
employees with modern managerial skills.  Partly as a result of decades of exclusionary policies,
which limited the access of large sections of the population to training and education,  there appears to
be a mismatch between the type of skills required by firms and those offered.  Assistance in
developing appropriate labour-market policies, in cluding the provision of training skills, could
therefore simultaneously promote trade, investment  and employment.
44
36. While the vast majority of South African firms are involved in export activity, most export a
very small proportion of their overall output.45  This applies particularly to small, micro and medium
enterprises (SMMEs), which have been identified as potential sources of job creation, and which, in
contrast to SMMEs in a number of other emerging markets, appear to have a low degree of integrationinto world markets.  One survey showed that only 22% of SMMEs were involved in international
trade.  One possible area of assistance would be to help the government to identify and implement
actions – such as access to market information, information on standards compliance – to support
                                                     
44 Lewis (2001).
45 Rankin (2001).SACU-South Africa WT/TPR/S/114/ZAF
Page A4-237
smaller firms.46  This seems particularly applicable to firms exporting electronics and electrical
products, which tend to export primarily to SADC countries and other low-income markets, rather
than the more industrialized markets.47
37. The development of regulatory capacity to accompany liberalization and privatization efforts
in areas such as energy, transport and telecommunications, which have key supply-side linkages, is a
priority if such reforms are to generate positive welfare and developmental effects.  Continuation ofefforts to promote competition in the delivery of information and communications technology (ICT)
services, for instance, is likely to benefit small and medium enterprises.
38. Key government priorities include increasing economic growth to reduce high unemployment
and to help integrate into the mainstream economy sections of the population that have hitherto been
excluded. Trade policy reform to date has helped simultaneously to increase the integration of theSouth African economy into the global economy and to increase its resilience towards external
shocks.  Significant reduction of unemployment and poverty remains to be made.  It is likely that
sustained growth will be contingent on the pursuit of further policy reform addressing also state-
owned enterprises, the labour market, and regulatory issues.  These actions will need to be sequenced,
and incorporated into a comprehensive development framework, with a clear identification of povertylinkages.  South Africa has the advantage of being able to draw on its relatively advanced consultative
policy formulation process in order to elaborate poverty-reducing trade policies.
                                                     
46 Lewis (2001).
47 Rankin (2001).WT/TPR/S/114/ZAF Trade Policy Review
Page A4-238
III. TRADE POLICIES AND PRACTICES BY MEASURE
(1) O VERVIEW
1. Since its last Trade Policy Review, in 1998, South Africa has continued to liberalize its trade
regime, with a focus on export promotion. A wide variety of incentives are available to local
producers in general, and exporters in particular;  some incentives are subject to local-content
requirements. South Africa has also initiated the Industrial Development Zones Programme to fosterinternational competitiveness, particularly of its small, medium, and micro enterprises. It maintains
export controls on certain products.
2. With a few exceptions, import permits are maintained on health, sanitary, phytosanitary and
environmental grounds, or under international conventions to which South Africa is a signatory.
South Africa has redrafted or amended legislation in many areas, including intellectual propertyrights, and has continued to reform its government  procurement system, with a view to increasing
local content of purchases, and promoting "black economic empowerment" throughout the economy.
3. A new Competition Act was enacted in South Africa in 1998. The new Act aims to further
address the high levels of concentration present in the economy, and anti-competitive business
practices. South Africa has also launched a programme to complete the restructuring of state-ownedenterprises by 2004, in order to increase efficiency, while attracting foreign investment, technology,
and expertise through full or partial privatization. The programme centres on the four major public
enterprises (Telkom, Transnet, Eskom, and Denel), which still operate under de jure  or de facto
monopoly, or hold exclusive rights.
(2) M
EASURES DIRECTLY AFFECTING IMPORTS
(i) Registration, import duties, and related measures
4. Under the SACU Agreement, import duties and re lated measures are to be set by South Africa
on behalf of the common customs area. However, in practice, applied customs tariffs, excise duties,
valuation methods, origin rules, and contingency trade remedies are, so far, the only trade policy
measures harmonized throughout SACU. These common policy measures are covered under the Main
Report (Chapter III). As regards import duties and related measures, differences exist among SACU
members in customs procedures, import duties (other than customs tariffs and excise duties), and dutyand tax concessions (Main Report, Chapter III(3)).
5. Trading activities in South Africa are open to nationals and foreigners. All importers and
exporters are required to register with the Commissioner for the South African Revenue Service.
48
Upon registration, applicants are issued with a customs code number, which must be entered on allcommercial documents. The registration process takes on average one day; traders are permitted touse a general code number issued by Customs in or der to begin importing or exporting immediately if
required.
6. Import clearance generally takes a maximum of 24 hours for air freight, and two to three days
for sea freight, depending on the port of entry.
49 All required documentation must be submitted to the
customs offices at the port of entry before goods can be cleared.  Shipments may be cleared throughcustoms prior to arrival at a South African port. In the case of sea freight, once customs has been
cleared, the importer pays dues to Harbour Revenue, and receives a wharfage order. The importer
                                                     
48 Form DA163 covers importers and exporters, as well as clearing agents and warehouse licensees.
49 Certain goods, such as liquor products, may take longer because laboratory analysis is required.SACU-South Africa WT/TPR/S/114/ZAF
Page A4-239
then pays the operator, receives a release, and collects the goods.50 The larger district customs offices
accept electronic documentation to expedite the clearance process;  however, it must be accompanied
by a paper version, since a paper document is still regarded as the legal declaration.51
7. In addition to preferential tariff treatment provided by all SACU members, exceptions to
MFN tariff treatment include preferential access under South Africa's trade arrangements: the Trade,
Development, and Cooperation Agreement (TDCA) with  the EU (Chapter II(2)(i) above); the bilateral
trade agreement with Zimbabwe;  and the non-reciprocal preferential treatment granted to Malawi,
and to a list of products from Mozambique (Chapter II(2)(ii))).
8. A specific fuel levy is applied on certain petroleum oils and oils obtained from bituminous
minerals. The levy is the same on imported and domestic goods:  R 0.766 per litre of leaded petrol;
R 0.704 per litre of unleaded petrol; and R 0.661 per litre of distillate fuels (e.g. gas oil and diesel oil),or mixtures of illuminating or heating kerosene. Other specific levies are charged on certain imported
and domestically produced agricultural goods, such as sorghum, oil seeds, lucerne seed, dried fruit,
meat, mohair, and milk. They are collected to promote research on the goods concerned. These levies
comprise two components, which together range from R 0.02 per kg. of meat, to R 0.342 per kg. of
mohair (Table III.1).
Table III.1
Levies on agricultural products
Products Domestic Imported
Levy Special levy Levy Special levy
Sorghum R 7.98/tonne R 3.97/tonne R 7.98/tonne R 3.97/tonne
Oilseeds:
  Shelled edible groundnuts R 5.80/tonne R 12.50/tonne R 1.45/tonne R 3.13/tonne
  Unshelled edible groundnuts R 4.20/tonne R 9.06/tonne R 1.05/tonne R 2.27/tonne
  Shelled crushing groundnuts R 5.80/tonne R 12.50/tonne R 1.45/tonne R 3.13/tonne
  Unshelled crushing groundnuts R 4.20/tonne R 9.06/tonne R 1.05/tonne R 2.27/tonne
  Sunflower seed R 5.80/tonne R 1.10/tonne R 1.45/tonne R 0.28/tonne
  Soy beans R 5.80/tonne R 9.10/tonne R 1.45/tonne R 1.11/tonne
Lucerne seed R 0.32/tonne R 0.18/tonne R 0.32/kg. No special levy
Dried fruit:
  Currants 2.50 ¢/kg. 1.50 ¢/kg. 1.50 ¢/kg. 1.50 ¢/kg.
  Raisins 2.50 ¢/kg. 1.50 ¢/kg. 1.50 ¢/kg. 1.50 ¢/kg.
  Seedless raisins 2.50 ¢/kg. 1.50 ¢/kg. 1.50 ¢/kg. 1.50 ¢/kg.
  Prunes 3.00 ¢/kg. 2.00 ¢/kg. 2.00 ¢/kg. 2.00 ¢/kg.
  All other kinds of dried fruit 3.40 ¢/kg. 5.00 ¢/kg. 5.00 ¢/kg. 5.00 ¢/kg.
Deboned meat cuts of beef No levy No levy 1 ¢/kg. 1 ¢/kg.
Meat of animals slaughtered at abattoirs in
South Africa
  Beef 209 ¢/carcass 352 ¢/carcass n.a. n.a.
  Calf 54 ¢/carcass 74 ¢/carcass n.a. n.a.
  Sheep 38  ¢/carcass 34 ¢/carcass n.a. n.a.
  Goat 38 ¢/carcass 34 ¢/carcass n.a. n.a.
  Pork 65 ¢/carcass 334 ¢/carcass n.a. n.a.
Meat imported into South Africa or introducedfrom an area in South Africa where the scheme
does not apply
  Beef n.a. n.a. 1 ¢/kg. 1 ¢/kg.
Table III.1 (cont'd)
                                                     
50 Use of freight forwarder is strongly recommended by Customs to clear goods more quickly. Ibid.
51 The South African Revenue Service is upgrading its technology and information systems. Plans in
the near future include a move to electronic data interchange (EDI) technology to facilitate the clearanceprocess. Moving to electronic custom s procedures is expected to incr ease revenue collection, by reducing
human error, by identifying fraudulent invoices, and through improved data dissemination.WT/TPR/S/114/ZAF Trade Policy Review
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Products Domestic Imported
Levy Special levy Levy Special levy
  Calf n.a. n.a. 1 ¢/kg. 1 ¢/kg.
  Sheep n.a. n.a. 2 ¢/kg. 1 ¢/kg.
  Goat n.a. n.a. 2 ¢/kg. 1 ¢/kg.
  Pork n.a. n.a. 0 ¢/kg. 2 ¢/kg.
  Deboned meat cuts of beef n.a. n.a. 1 ¢/kg. 1 ¢/kg.
  Mohair 23.9 ¢/kg. 10.3 ¢/kg. 23.9 ¢/kg. 10.3 ¢/kg.
  Milk 0.163 ¢/litre 0.297 ¢/litre 0.163 ¢/litre 0.297 ¢/litre
n.a. Not applicable.
Source: Information provided by the National Agricultural Marketing Council.
9. South Africa imposes a value-added tax (VAT), at 14%, on goods and services, whether
locally produced or imported.52  The VAT on imports is levied on the added-tax value (i.e. the sum of
the customs value, plus 10% of the customs value, plus any non-rebated customs duty). According to
the authorities, the additional 10% of the customs va lue corrects for the use of f.o.b. rather than c.i.f.
prices for customs duty purposes. The VAT is levied on the open-market value of domestic supply of
goods and services.53
10. Exports and the supply of certain goods and services, such as agricultural inputs (e.g. animal
feed, seed, fertilizers, pesticides, and animal remedies), certain basic foodstuffs (e.g. brown bread,
maize meal, eggs, milk, fruit, and vegetables), and international transport services, are zero-rated for
VAT refund purposes.54 The VAT is not payable on temporary imports and imports for export-
processing. Interest on loans, superannuation  fund interest, residential rents, passenger transport byroad or rail, and educational services are exempt from VAT. Revenue collected from VAT almost
doubled from R35.9 million in 1996/97 to R70.6 million estimated for 2002/03.
11. In addition to VAT concessions, and to conc essions granted by all SACU countries (Main
Report, Chapter III(3)(v)), South Africa may provide rebate facilities, on a selective basis, to
industrialists who demonstrate that the import tariff on their raw materials and/or components has a
substantial effect on their production costs, and that they need the rebate to compete with like
imported products.
55 South Africa also has a duty drawback scheme, which provides refunds for
import duties paid on materials used in the production of export goods.  Secure bonded warehouse
facilities are available in designated areas (listed in the schedule to the Customs and Excise Rules)
and may be used to store imported goods without payment of duties for a maximum of two years until
required for use or re-export. Goods withdrawn from a bonded warehouse are liable for the duty
applicable only if cleared out of bond for home consumption.
                                                     
52 A 10% VAT replaced the 13% general sales tax on  1 October 1991. The VAT standard rate was
increased from 10% to 14% on 7 April 1993.
53 The open market value of any goods and services is the consideration in money that the goods and
services would generally fetch if their supply were freely offered and made, in similar circumstances, between
persons who are not connected persons, in South Africa (Section 3 of the 1991 Value-Added Tax Act).
54 Capital goods qualify for import tax deductions.
55 The Board on Tariffs and Trade considers applicatio ns for tariff protection, exemptions, rebates and
refunds, and related permits. WTO (1998).SACU-South Africa WT/TPR/S/114/ZAF
Page A4-241
(ii) Import prohibitions and licensing
12. The importation of certain goods (Table III.2) is subject to import permits under the 1963
Import and Export Control Act. Applications for import permits must be made by importers at least
two weeks prior to the date of shipment. Import perm its are issued free of charge by the Import and
Export Control Directorate of the Depa rtment of Trade and Industry (DTI).56 The average time taken
to issue of a permit is three days. Permits are valid for a calendar year, and they are non-transferrable.They may prescribe conditions for import, or the use of the goods to be imported;  these may include
the quantity or value/price and the origin of the goods. Failure to produce the permit may result in a
fine of up to R 40,000 and/or imprisonment for a period not exceeding ten years.
57
Table III.2
Goods subject to import control, January 2003
Description Tariff heading Purpose of control
All used goods, waste and scrap Various Health, environmental reasons and in terms
of the Basel Convention
Fish, fresh or frozen, crustaceans and
molluscs03.01 to 03.07 Health reasons, no quantitative restrictions
Sugar and coffee from Malawi 0901, 17.01 In terms of the trade agreement between
South Africa and Malawi
Mineral fuels, mineral oils and products of
their distillation27.07 to 27.15 Strategic reasons
Radioactive chemical elements and
radioactive isotopes28.44, 28.45 Health and environmental reasons
Chemicals used in drug manufacturing 2806.10, 2807.00, 2841.61, 2902.30,
2909.11, 2914.11, 2914.12, 2914.31,
2915.24, 2916.34, 2922.43, 2932.92,
2932.93, 2932.94, 2933.32, 2939.42,
2939.61, 2939.62, 2939.631998 Convention against chemicals used in
illegal drug manufacturing
New pneumatic tyres 40.11 Monitoring for quality specification
Gold and coins 71.08 Monetary policy
Cobalt, cadmium antimony, manganesediromium, germanium, vanadium, gallium,
hafnium, indium, rhenium, and thallium81.05; 81.07; 81.10; 81.12 Health and environmental reasons
Revolvers and pistols, other firearms, parts,
ammunition and parts93.03 to 93.06 Security reasons
Gambling machines ex 9504.30 Quality specifications and public interest
Ozone-depleting substances ex 2903.10, 2903.30.10, 2903.45.90, ex
2903.49.10, 2903.41-2903.44, 2903.45.05,
2903.46, 3824.71.10, 3824.71.90Montreal Protocol
Source : WTO document G/LIC/N/3/ZAF/3/Rev.1, 20 August 2001, and information provided by the authorities.
13. Since its last TPR, South Africa has phased out import permits on four categories of products:
dairy products (HS 04.01 to 04.06); oats and maize (HS 10.04, and 10.05); wine, vermouth, fermented
beverages, ethyl alcohol vinegar, and substitutes ((HS 22.04 to 22.06, ex22.07, ex22.08, and 22.09);
and vulcanized rubber thread and cord, plates and strip (HS 40.07, and 40.08). It temporarilyintroduced an import permit on black tea (HS 0903.30 and 0902.40), but according to the authorities,
this was abolished in 1998. Some chemicals likely to be used in illegal drug manufacturing are subject
to import controls in accordance with international conventions (Table III.2).
                                                     
56 For a limited range of goods, applications are also considered by the Departments of Agriculture,
Health, and Environmental Affairs.
57 WTO (1998).WT/TPR/S/114/ZAF Trade Policy Review
Page A4-242
14. The 1983 Agricultural Pests Act (Act No. 36) provides for importation, by means of a permit
or following publication in the Government Gazette , of controlled goods such as plants and plant
products, pathogens, insects, exotic animals, growth mediums, honey, beeswax or used apiary
equipment. The importation of such goods may also be subject to specific phytosanitary conditions as
indicated on the permit or as published in the Government Gazette . The importation of other
controlled goods – fresh and dried fruits, vegetables and cut flowers, as well as certain types of plantmaterial - also requires a permit to be issued in terms of Articles 3 and 4 of the Agricultural Pests Act,
1983.
58 The 1947 Fertilizers, Farm Feeds, Agricultural Remedies and Stock Remedies Act
(Act No. 36) covers a list of agricultural products  subject to import control for health, sanitary and
phytosanitary reasons (section (c) below). Pursuant to the 2000 Meat Safety Act, a permit is necessary
to import any meat into South Africa. Import controls are also applied to products such as medicines,mainly for reasons of compliance with approved standards.  South Africa prohibits imports of certain
used goods, waste, and hazardous materials.  Pest icides such as aldrin, dieldrin, mercury compounds,
and certain mixtures of isomers are banned from import, while imports of others (e.g. inorganic
arsenic compounds, chlordane, DDT) are severely restricted. These measures apply to all imports,
including from other SACU countries.
15. Preferential tariff quotas apply to a list of imported goods from Mozambique.
59
(iii) Local-content schemes
16. Exporters qualify for credit facilities (granted by the Industrial Development Corporation
(IDC)) by using a minimum of 70% South African products and services (section (3)(iii)), and there
are certain restrictions on loans from South African banks to foreign companies, depending on the
percentage of foreign capital participation (Chapter I, Box I.1). Also, local-content considerations are
taken into account when comparing tenders for government procurement purposes (section (v)below).
60  The South African Music and Television Local Content Regulations, published in April and
May 199761, which came into effect in November 1997, establish minimum local-content
requirements for TV and sound broadcasters.62
(iv) Standards and other technical regulations
(a) Standardization, testing, and certification
17. The South African Bureau of Standards (SABS), established in 1945, continues to be the
national institution for the promotion and maintenance of standardization in industry and commerce in
South Africa.  SABS is also the official  WTO/TBT enquiry point for South Africa.63 The principal
                                                     
58 WTO document G/SPS/N/ZAF/4, 21 October 1998.
59 See WTO (1998).
60 In 2001, South Africa informed the WTO that the TRIMs it notified in 1995 had been phased out,
and that no other measures inconsistent with the provisions of the TRIMs Agreement were maintained. The
1995 TRIMs related to the motor vehicle industry, telecommunication equipment, and tea and coffee (WTO
document G/TRIMS/N/2/Rev.9, 28 September 2001).
61 Regulations No. R. 622, 25 April 1997, Relating to the Imposition of Sound Broadcasting Licence
Conditions Regarding South African Music; and Regulations No. R. 661, 2 May 1997, Relating to theImposition of Specific Broadcasting Licence Conditions Regarding Local Television Content for Public andPrivate Television Broadcasting Services.
62 The Independent Broadcasting Authority regulations apply to the holder of any category of sound
broadcasting licence that devotes 15% or more of its broadcasting time between 5:00 a.m. and 11:00 p.m. to thebroadcast of music.
63 The core business units of SABS are financed under the "science vote", administered by the
Department of Arts, Culture, Science and Technology of South Africa. Inspections and tests, which are carriedSACU-South Africa WT/TPR/S/114/ZAF
Page A4-243
activities of SABS include preparing specifications, codes of practice and standard methods, setting
up test and inspection facilities, and the administration of product and system certification schemes,
such as the SABS mark, for which varying fees are charged depending on the product and tests
involved. The Agricultural Product Standards Act (Act No. 119 of 1990) and the Liquor Products Act
(Act No. 60 of 1989) cover the setting of norms and standards for agricultural products.  According to
the authorities, standards setting under these acts is in consultation with the agricultural industry,consumer groups, and international standards setting bodies.
18. SABS develops standards at the request of interested parties. It forms a committee including
representatives of parties with an interest in the standard. Once finalized and commented on by the
public, standards are published in the Government Gazette as national standards. The use of SABS
standards is voluntary, although in some cases where public health and safety are a concern, theMinister of Trade and Industry has declared their use obligatory.
19. Under the Standards Act (Act No. 29 of 1993, ad ministered by the DTI), a voluntary standard
becomes compulsory once referenced; any Department may reference and make compulsory any
standard that addresses health, safety or environmental concerns. Compulsory standards apply equally
to products from all origins. Section 23 of the Stan dards Act gives SABS the authority to ensure that
products that are subject to compulsory South Afri can specifications comply with these requirements.
By mid 2002, South Africa had 6,980 standards, of which 72 were declared compulsory by the
Minister of Trade and Industry (up from 3,500 and 54, respectively, in mid-March 1997).
64 The
departments of Agriculture, Health, Minerals and En ergy, among others, meet some regulatory needs
through referencing standards.
20. While Telkom is still largely responsible for setting and approving telecommunication
standards applicable to telephone equipment, the SA BS is responsible in general for setting broadly
applicable telecom standards.
21. South Africa generally sets its standards following international norms, and continues to be
active in a number of standardization organizations, such as the FAO/WHO Codex Alimentarius
Commission, the various special advisory commissions under the auspices of the Office International
des Epizooties  (OIE), and the United Nations Economic Commission for Europe (UNECE) WorkingParty on Vehicle Safety.
65 SABS is party to the International Organization for Standardization (ISO),
the International Organization for Legal Metrology (OIML), the International Electrotechnical
Commission (IEC), and it has accepted the Code of Good Practice of the WTO Technical Barriers to
Trade (TBT) Agreement. South Africa is represented in the Metre Convention, and in the Bureau
international des poids et mesures , by the National Metrology Laboratory (NML). The South African
National Accreditation System (SANAS) is a member  of the OECD Good Laboratory Practice Panel.
South Africa also plays a leading role in regional technical infrastructure initiatives; SANAS, SABS,
and NML, host regional secretariats in their respective fields, following the May 2000 Memorandum
of Understanding establishing cooperation between national institutions within SADC.  According to
                                                                                                                                                                    
out for the private sector, industry, national government, provincial, and local authorities, as well as the
certification of products and systems, are funded on a co mmercial basis by fees charged for services rendered
(South Africa Bureau of Standards, 2001).
64 All SABS standards from 1992 are now available electronically via print-on-demand, and the aim is
to have all standards available electronically as soon as possible. Ibid.
65 According to SABS (2001), the UN ECE 1958 and 1998 agreements, essential for the harmonization
of motor vehicle regulations worldwide, have been prepared for signature by the Government. Once South
Africa becomes a contracting party to these agreements, th e automotive industry is expected to benefit through
increased international recognition.WT/TPR/S/114/ZAF Trade Policy Review
Page A4-244
the authorities, South Africa complies with the WTO SPS Agreement for import of animals, plants
and agricultural products.
22. The South African National Accreditation System (SANAS), launched in 1996, became fully
operational in 1998 with two divisions in place: one for accreditation of laboratories and inspection
bodies, and one for the handling of accreditation of all certification bodies. SANAS operates an
internationally recognized accreditation system fo r calibration and testing laboratories, quality and
environmental management systems, and product and personnel certification and inspection. SANAS
has mutual recognition agreements with the European Accreditation of Laboratories Co-operation
(EAL) in respect of calibration and testing facilities, and with the Chinese National Laboratory
Accreditation (CNLA) in respect of calibration facilities.66 SANAS has been assessed by the National
Association Testing Authority of Australia (NATAA) for mutual recognition agreements withNATAA, and by the Testing Laboratory Registration Council (TELARC) in respect of calibration and
testing facilities.  In the absence of a mutual recognition agreement, it is the responsibility of the
supplier to prove the compatibility of its products with South African standards. SANAS participates
in the International Laboratory Accreditation Co-operation (ILAC) and the International Accreditation
Forum (IAF). SANAS maintains a list of accredited civil engineering test facilities whose technicalcompetence meets South African standards; it has not so far accredited foreign test facilities.
(b) Health, sanitary, phytosanitary, and environmental regulations
23. There have been no major changes to the laws that regulate trade, production, and
manufacture of agricultural commodities and goods destined for human or animal consumption since
the last Review, except:  the Agricultural Products Amendment Act  (Act No. 63 of 1998), which
provides, inter alia , for quality control, the control over sale of imported products, the charging of
certain fees, and further regulates provisions relating to powers of entry, investigation, sampling, andseizure; and the Meat Safety Act (Act No. 40 of 2000), which provides for measures to promote meat
safety and the safety of animal products
67, to establish and maintain essential national standards in
respect of abattoirs, to regulate the importation and exportation of meat, and establishes meat safety
schemes, which may be made compulsory.68 Any person who contravenes or fails to comply with
measures related to assignment of powers, the operation of slaughter facilities, restrictions onimportation or exportation of meat, and inspections, is liable to a fine or to imprisonment for up to
four years, or both. The Tobacco Products Control Amendment Act, No. 12 of 1999
69, provides for
the prescription of maximum yields of tar, nicotine, and other constituents in tobacco products.
Accordingly, the Minister of Health has declared  the allowed maximum amount of tar and nicotine in
tobacco products.70
24. All imports of live animals (including exotic animals) and animal products, plants, pathogens,
insects, growth medium, any infectious item, honey, beeswax used as apiary equipment, and
genetically modified organisms, continue to be subject to import permits issued by the Directorates of
                                                     
66 The mutual recognition agreement with the EU also  applies to electrical and electronic systems and
components.
67 The Abattoir Hygiene Act, Act No. 121 of 1992, is thereby repealed, except for its Section 23.
68 As a general rule, meat can only be imported through a permit, and meat can only be introduced to
South Africa following the prescribed procedures, inter alia : storage at an approved facility until the prescribed
veterinary procedures or other acts are performed, and availability for inspection, sampling and testing ( Meat
Safety Act, Section 13).
69 It amends the Tobacco Products Control Act, Act No. 83 of 1993.
70 Department of Health, Government Notice No. R. 974 of 2000: the amount of tar is not to be greater
than 15 mg per cigarette, and the nicotine yield not greater than 1.5 mg per cigarette, as from 1 December 2001;they shall not exceed 12 mg and 1.2 mg per cigarette, respectively, as from 1 June 2006.SACU-South Africa WT/TPR/S/114/ZAF
Page A4-245
Animal Health, Plant Health and Quality of the National Department of Agriculture; such imports
remain under continuous review due to changes in disease status. A list of other agricultural products
subject to import control, is determined by the Minister of Agriculture.71
25. The sale of foodstuffs containing more than prescribed levels of aflatoxin and other fungus-
induced toxins, and the sale of cereals in which, inter alia , the datura seed content exceeds certain
specified limits are prohibited.72 The importation of live animals susceptible to "mad cow" disease
from all countries infected with Bovine Spongifor m Encephalopathy (BSE) has been suspended since
22 March 1996. However, imports of semen from BSE-infected countries are still allowed if
accompanied by a health certificate issued in acco rdance with international guidelines. South Africa
and other countries have harmonized their import requirements for certain diseases; for example,
South Africa has mutual acceptance of pathogen-reduction programmes for diseases, such assalmonella enteritidis, with the other members of SADC.
26. Food products are routinely analysed in specializ ed laboratories in South Africa to determine
their composition, microbiological contamination, and pesticide residue levels. A cost-related fee of
R 60 (per import permit) is charged for issuing import permits by the Directorate of Veterinary Public
Health. Inspection fees range from R 35 per 30 minutes to R 104 per hour or portion thereof;  feespayable for testing range from R 12 to R 122 per test or sample.
27. For over ten years, South Africa has been active in the application of genetic engineering
techniques in sectors including agriculture, food, and pharmaceuticals. Herbicide tolerant (RR)
soybeans, insect resistant (Bt) cotton, and two types of corn (RR and Bt) have been issued general
release permits.
73 The regulatory framework governing the use of these products is the 1997
Genetically Modified Organisms Act, which came into force on 1 December 1999. This Act aims to
ensure that all activities involving the use of genetically modified biotechnology are carried out insuch a way as to limit possible harmful consequenc es to the environment. South Africa intends to
stimulate the growth of biotechnology industries, gi ven their important contribution to human health,
food security, and environmental sustainability. However, some SADC countries have criticized
South Africa for breaking ranks with the regional opposition to GM crops
74, while South Africa's
parliament has called for an urgent discussion on whether the country needs to amend its laws in thisregard.
75 Also, some consumer groups have urged the Mini stry of Health of South Africa to introduce
compulsory biotechnology labelling.76
28. The Animal Disease Act (Act No. 35 of 1984) is soon to be replaced with the Animal Health
Act (Act No. 7 of 2002), which has been promulgated, and will be proclaimed some time in 2003.
The new Act retains the basic provisions of the Animal Disease Act, regarding animal disease controland import control for animals and animal products, and adds provisions for the designation of
provincial executive officers, for the assignment (and the suspension) of executive authority to
provinces, abolishing the need for a warrant to conduct powers of entry, search and seizure for the
                                                     
71 The list includes: seeds for planting purposes; fresh and dried fruit, vegetables, flowers and foliage;
bark, cork, rattan, bamboo, timber and fibres for manufacturing; organisms for research, bio-control agents,infected plant material for laboratory analysis; leaf t obacco, tobacco stalks and dust; and fresh water fish for
aquariums and fresh water crayfish for research.
72 See WTO (1998) for permissible levels.
73 Other genetically modified (GM) crops have also been granted permits for "trial release plantings".
74 South Africa is the only SADC member to produce genetically modified (GM) crops. Zambia,
Zimbabwe, Malawi, and Mozambique have been hesitant to accept GM grains even in the face of a threateningregional famine ( Reuters , 15 October, 2002).
75 Reuters , 15 October, 2002.
76 Reuters , 15 October, 2002.WT/TPR/S/114/ZAF Trade Policy Review
Page A4-246
purpose of achieving the objects of the Act, and providing for control of the export of animals and
animal products to protect the animal health status of the importing country. In addition, the Animal
Health Act stipulates that all exports of animals or animal products from South Africa are subject to a
Valid State Veterinary Expert health certificate, confirming that the import requirements of the
country of destination have been met.  The obligation to obtain such a certificate will be waived only
if the exporter is able to furnish written proof that the importing country does not require suchcertification.
29. South Africa is a member of the three standard-setting bodies referred to in the WTO SPS
Agreement: FAO/WHO Codex Alimentarius, the Offi ce international des epizooties (OIE), and the
International Plant Protection Convention of 1991.
(c) Marking, labelling, and packaging
30. The 1990 Agricultural Products Standards Act remains the legal basis for packaging and
marking of agricultural products (including imported goods) for local sale and for export. The
Directorate of Plant Health and Quality of th e National Department of Agriculture, and the
Directorate of Food Control of the National Department of Health, are responsible for regulating, and
setting certain standards for agricultural products. This includes the composition, quality, packaging,marking, and labelling of products, as well as physical, physiological, chemical, and microbiological
analyses. The requirements are published, in accordance with the 1998 Agricultural Product Standards
Amendment Act, and the 1989 Liquor Products Act, as regulations governing the sale of products in
the local and export markets (Table III.3). Local and export quality standards apply to: fruit, flowers,
grains, processed animal and plant products, animal products, and liquor products derived from wine.
Table III.3
Agricultural products to which quality standards apply
Product description Quality standards
Animal products
  Dairy products local & export
  Eggs local & export
  Fat spreads local
  Mohair local
  Imitation dairy products local
  Meat (carcasses) local & export
  Poultry meat local & export
Processed products
  Apricot and peach kernels export
  Canned fruit local & export
  Canned mushrooms local & export
  Canned vegetables local & export
  Dehydrated vegetables local
  Dried fruit local & export
  Frozen fruit and vegetables local & export
  Fruit juices local
  Honey local
  Canned Pasta local & export
  Rooibos tea local & export
  Vinegar local
Deciduous fruit
  Apples local & export
  Apricots export
  Cherries export
  Grapes local & export
  Peaches and nectarines local & export
  Pears local & export
  Plums and prunes local & export
Table III.3 (cont'd)SACU-South Africa WT/TPR/S/114/ZAF
Page A4-247
Product description Quality standards
Subtropical crops and flowers
  Avocados local & export
  Chinkerinchees export
  Citrus fruit local & export
  Flowers export
  Green bananas local
  Kiwifruit export
  Litchis export
  Mangoes export
  Melons and watermelons export
  Pineapples export
  Strawberries export
  Subtropical fruit export
Cereals and vegetables
  Buckwheat export
  Dry beans local & export
  Feed products export
  Grain sorghum export
  Grass seeds export
  Groundnuts export
  Leguminous seeds export
  Lesser known types of maize export
  Maize export
  Maize products local & export
  Oilseeds export
  Onions local & export
  Potatoes local & export
  Tobacco export
  Tomatoes local
  Vegetables (other than potatoes and onions) export
  Wheat export
  Wheaten products local
Liquor products
  All liquor products (excluding beer and sorghum beer) local & export
Source: Information provided by the South African authorities.
31. The country of origin must be identified on imported products. Marks and labels are to
provide consumers with accurate and relevant information for their personal choice of products: for
example, full-fat yoghurt is differentiated from lo w-fat yoghurt; class A (tender) meat is contrasted
with class B or C (less tender); pure orange juice contains a minimum of 90% juice, orange nectar
contains a minimum of 50%, orange drink contains  a minimum of 6%, and orange flavour drink less
than 6%; and real vinegar is differentiated from  imitation vinegar (acetic acid). The quality of
potatoes in a sealed bag or the contents of a tin are indicated by a mark or label.
32. Special labelling requirements also apply to products such as drugs, wine, mouthwashes,
foodstuffs, cosmetics, and textile goods containing sheep's wool. Packaging made from natural
materials and fibres must be accompanied by an official certificate stating that the material has been
fumigated. South Africa has a compulsory standard specification relating to the manufacture,
production, processing or treatment of canned meat products (Standards Act of 1993). The import ofirradiated meat from any source is still banned on public health grounds.
33. The National Economic Development and La bour Council (NEDLAC) has recently launched
the "Proudly South African" campaign to promote South African companies, products, and services.
At the heart of the campaign is a logo that can only be used if certain criteria are met, including  fair
labour and employment practices, sound environmental standards, and local content. For example, aWT/TPR/S/114/ZAF Trade Policy Review
Page A4-248
company's products or services must be substantially transformed, and incur in at least 50% of their
production costs, including labour, in South Africa.77
(v) Government procurement
34. South Africa is not a member of the WTO Plurilateral Government Procurement Agreement
(GPA). According to the authori ties, joining the GPA could limit South Africa's objectives towards
promoting small, micro, and medium-sized enterprises (SMMEs), and the "black economicempowerment" (BEE) programme.
35. The government procurement framework has remained basically the same since the previous
TPR;  it is regulated through the State Tender Board Act (Act No. 86 of 1968). However, South
Africa is trying to align the buying procedures of national, provincial, local, and state-owned
companies. As part of the Public Finance Management Act Regulations of 1999, the state andprovincial tender boards ceased to exist on 31 March 2002, in order to devolve accountability to
accounting officers. The accounting officers are now allowed to approve government purchases
depending on their level of responsibility and the amount. For instance, for amounts greater than R
500,000 three quotations must be submitted to the Tender Committee and services must be procured
to the best advantage of the State (i.e. the lowest quotation). For purchases greater than R 4 million,the Director-General of DTI is authorized to approve. Also, an independent ombudsperson was
appointed to provide an interim mechanism for quick and effective intervention on complaints from
businesses.
36. The basic principles for government procurement in South Africa, in terms of socio-economic
objectives, are set out in the Constitution: procurement by an organ of State or any other institution
identified in national legislation must, on the one hand, be "in accordance with a system which is fair,
equitable, transparent, competitive and cost-effective", and, on the other hand, allow for categories ofpreference and the protection, or advancement, of persons disadvantaged by unfair discrimination,
within a framework to be prescribed by national legislation.
78 Other principles on which procurement
must be based in South Africa are accountability, and the just in time delivery principle.
37. Price preferences are taken into account for comparison of tenders purposes: the preferences
are deducted from the tender price after the tenders have been evaluated and brought to a comparativebasis.  Price preferences, aimed at promoting local manufacture are based on, inter alia , local content,
use of the SABS mark, and of locally manufactured electronic systems and components. The
preference is up to 10% if local content is more than 80%; up to 10% for the use of locally
manufactured electronic systems and components plus  a minimum of 5% for local design, provided
that the two together do not exceed 10%; and 2 .5% for the use of products that carry the SABS
mark.
79 Price preferences are generally cumulative.
38. The Preferential Procurement Policy Framework Act, No. 5 of 2000, and the related
regulations promulgated in July 2001, stipulate that preferences will apply to all tenders, irrespective
of the amount. Preference points, calculated on the basis of comparative and not tendered prices80,
may be allocated within the following limits: an 80/20 point system for tenders up to R 500,000. Amaximum of 80 points is allocated to the lowest acceptable tender in terms of price; higher price
tenders receive fewer points. A maximum of 20 points is awarded to historically disadvantaged
                                                     
77 Online information available at: www.proudlysa.co.za.
78 Constitution of the Republic of South Africa, Act 108 of 1996, Section 217, Subsections (1), (2) and
(3), respectively.
79 For more details on these price preferences, see WTO (1998).
80 Comparative prices are those obtained after comparison of tenders (WTO, 1998).SACU-South Africa WT/TPR/S/114/ZAF
Page A4-249
tenderers, and for achieving specified developmental goals. For tenders above R 500,000, a 90/10
point system is used on the same basis. The contract  must be awarded to the tenderer who scores the
highest points, unless other developmental objective criteria justify the award to another tenderer. An
organ of State may be exempted from provisions of  the Framework Act if public or national security
interests justify such exemption, or if the likely  tenderers are international suppliers. Foreign firms
can only bid through a local agent.
39. Parastatals also generally follow the government's procurement policy; Eskom and Transnet
have no preference system, while Telkom grants preferences based on local content. Any bidder for a
parastatal contract whose bid contains importe d content worth over US$10 million, must submit an
"industrial participation" (IP) plan showing that the bidder will invest in a new or incremental
business in South Africa.
40. Under the National Industrial Participation Programme (NIPP), the seller must invest in a
South African business to the valve of at least 30% of the value of the imported content of the tender.
The industrial policy of the Ministry of Defenc e and the Armaments Corporation of South Africa
(ARMSCOR) imposes an IP obligation on all de fence purchases exceeding US$2 million; this
obligation is known as "Defence Industrial Part icipation" (DIP). Defence purchases exceeding
US$2 million but less than US$10 million require a DIP obligation of up to 50%, and defence
purchases exceeding US$10 million require a DIP obligation of at least 50%, and an IP obligation of
at least 30%.
(vi) Countertrade
41. The countertrade regime has not changed since 1998. The NIPP, which became mandatory on
1 September 199681, resembles a countertrade contract in the sense that goods and/or services
imported under the tender contract are partially offset by exports of services, and, to a certain extent,goods, during the period of fulfilment of the Industrial Participation Obligation (the IP obligation).
This applies to all public sector procurements where the imported content exceeds US$10 million
(section (v) above).
(vii) Other measures
42. According to the authorities, South Africa has no agreements with foreign governments or
enterprises designed to influence the quantity or value of goods and services exported. Furthermore,
there are no such agreements between companies operating in South Africa and foreign enterprises.
43. According to the authorities, South Africa applies no trade sanctions, either nationally or
internationally, except those endorsed by the United Nations (UN) Security Council, the African
Union (AU), or the Southern Af rican Development Community (SADC). Such trade restrictions
include those dictated by international conventions to which South Africa is a signatory, for example
the trade restrictions on ivory as stipulated by the Convention on International Trade in Endangered
Species of Wild Fauna and Flora (CITES).
                                                     
81 The Cabinet approved the policy and operating guidelines on 30 April 1997.WT/TPR/S/114/ZAF Trade Policy Review
Page A4-250
(3) M EASURES DIRECTLY AFFECTING EXPORTS
(i) Registration and taxes
44. Similar registration and documentation requirements apply to exporters and importers in
South Africa (section (2)(i) above). In addition, in order to be eligible for export incentives, firms
must be registered with the Department of Trade and Industry (DTI).
45. South Africa imposes an export levy of R 0.05 per litre of exported wine (Chapter IV(2)(ii)),
and a 15% export tax on unpolished diamonds (Chapter IV(3)(ii)).
(ii) Export prohibitions, controls, and licensing
46. Export prohibitions are applied on only a few products such as crude or unprocessed tiger's
eye. The export prohibition on fertile ostriches, and hatching eggs was lifted in 1997, in accordance
with the Livestock Improvement Amendment Act (Act No. 60 of 1997). The number of products
subject to export control and licensing has been reduced since 1997. Single-export markets
disappeared in early 1998 with the abolition of agriculture control boards, which were the sole
exporters of fifteen categories of products. However, a number of products are still subject to export
control and licensing in South Africa, as provided for by the 1963 Import and Export Control Act
(Table III.4).
47. Exports of explosives are controlled under th e Explosives Act (Act No. 26 of 1956) and its
Regulations. Only the South African Reserve Bank (SARB) and Rand Refined Limited are authorized
to export gold; all other exports of gold must be approved in advance by the Exchange Control
Department of the SARB.  The expo rt of diamonds is controlled in terms of the Diamonds Act. Some
other minerals, such as manganese, molybgteni, and tantalum, are also subject to export control by the
Department of Environmental Affairs and Tourism, and DTI. South African residents are permitted to
export currency coins and numismatic items within an overall limit of R300 per applicant per calendar
year; exports of currency coins above this amount must be approved by the SARB. Emigrants from
South Africa may export motor vehicles within the overall insured value of R100,000, as well as
household and personal effects to the value of R100,000. The South African Sugar Association
(SASA) is no longer the sole sugar exporter;  however, raw sugar can only be exported through a
single channel industry arrangement (Chapter IV((2)(ii). For quality control purposes, exports of wineare still subject to an export certificate under the Liquor Products Act.
Table III.4
Products subject to export control, January 2003
Tariff heading Description of goods Code lettera
Ex 12.09 Wattle seed being:
- Acacia mearnsii de Willd (formerly known as Acacia mollissima Willd)
(commonly known as Black Wattle- Acacia decurrens (Wendl. Willd) (commonly known as Green Wattle)
- Acacia dealbata Link (commonly known as Silver Wattle)
- Acacia psycnantha Benth
- Acacia syanophylla LindlW
2530.90.20 Lithium ore M
2530.90.90 Sugulite (also known as lavulite or lazulite):  unworked or simply sawn or roughly shaped M
2607.00 Lead ores and concentrates H
26.11 Tungsten ores and concentrates H
26.13 Molybdenum ores and concentrates H
Ex 2615.90 Tantalum ores and concentrates H
2710.00.12 Petrol M
2710.00.13 Aviation spirit M
Table III.4 (cont'd)SACU-South Africa WT/TPR/S/114/ZAF
Page A4-251
Tariff heading Description of goods Code lettera
2710.00.14 Aviation kerosene;  power kerosene;  illuminating or heating kerosene M
Ex 2710.00.16 Diesel oil M
2710.00.17 Residual fuel oils M
2711.12 Petroleum gas:  propane M
2711.13 Petroleum gas:  butane M
2806.10 Hydrochloric acid ..
2807.00 Sulphuric acid ..
2841.61 Potassium permanganate ..
2902.30 Toluene ..
2903.19.10 Trichloroethane (methyl chloroform) ..
2903.30.10 Bromomethane (Methyl Bromide) ..
2903.41 Trichlorofluoromethane (CFC11) ..
2903.42 Dichlorodifluoromethane (CFC12) ..
2903.43 Trichlorotrifluoroethanes (CFC 113) ..
2903.44 Dichlorotetrafluoroethanes (CFC 114) and chloropentafluoroethane (CFC 115) ..
290345.05 Chlorodifluoromethane (CFC 22) ..
2903.45.90 Other derivatives perhalogenated only with fluorine and chlorine:  other ..
2903.46 Bromochlorodifluoromethane (Halon 1211), bromotrifluoromethane (Halon 1301) and
dibromotetrafluoroethanes (Halon 2402)..
2903.49.10 Derivatives of methane, ethane or propane, halogenated only with fluorine and chlorine ..
2909.11 Diethel Ethyl Ether N
2914.11 Acetone N
2914.12 Methyl ethyl ketone N
2914.31 1-phenyl-2-propanone N
2915.24 Acetic anhydride N
2916.34 Phenylacetic acid N
2922.43 Anthralinic acid N
2924.22 N-Acetylanthranilic acid N
2932.91 Isosafrole N
2932.92 3,4, Methylenedioxyphenyl-2-propanone N
2932.93 Piperonal N
2932.94 Safrole N
2933.32 Piperidine N
2939.41 Ephedrine N
2939.42 Pseudoephedrine N
2939.61 Ergometrine N
2939.62 Ergontamine N
2939.63 Lysergic acid N
Ex 30.02 Human blood and preparations thereof
Medicaments containing other antibiotics being:N
300.20.90 Invomec inj-cattle (reg. Nÿ G541, Act 36/1947) L
Invomec inj-sheep (reg. Nÿ  G782, Act 36/1947) L
Invomec liquid-sheep (reg. Nÿ  G590, Act 36/1947) L
Eqvalan paste for horses (reg. Nÿ  G667, Act 36/1947) L
3824.71.10 Mixtures containing dichlorodifluoromethane or trichlorofluoromethane (CFC 500) ..
3824.71.90 Other (CFC 502) ..
Ex 44.03 Saw logs of yellowwood (Podocarpus Falcatus, Podoarpus Henkelii, Podocarpus
Latifolius);  stinkwood (Ocotea Bullata) and blackwood (Acacia Melanoxylon)W
Ex 44.07 Sawn yellowwood (Podocarpus Falcatus, Podocarpus Henkelii, Podocarpus Latifolius);
stinkwood (Ocotea Bullata) and blackwood (Acacia Melanoxylon)
47.07 Waste and scrap of paper or paperboard H
Table III.4 (cont'd)WT/TPR/S/114/ZAF Trade Policy Review
Page A4-252
Tariff heading Description of goods Code lettera
Ex 7103.10.10
Ex 7103.10.20Tiger's-eye including its related varieties and also any articles consisting wholly or partly
of tiger's-eye or its related varieties but excluding properly finished and finally and
completely polished cabochons, beads, eggs, spheres, tumbled stones and carvings cuttherefrom or otherwise processed or tumbled
Definitions
(1) "Cabochon" shall mean a stone of which the top forms:
- a symmetrically curved convex or concave surface;  or
- a flat surface, provided the stone is either round or oval or crescent, heart, crossor tear shaped;  the base may be convex, concave or flat.
(2) "Bead" shall mean a stone of any shape of a mass not exceeding 50 grammes
which has been drilled in such a way that it can be strung in a necklace.
(3) "Egg" shall mean a symmetrically egg-shaped stone.(4) "Sphere" shall mean a symmetrically sphere-shaped stone.
(5) "Tumbled stone" shall mean an uncut, unsawn stone or irregular shape of a
mass not exceeding 50 grammes which has been properly tumbled to such an extent that ithas a pebble-like appearance.
(6) "Carving" shall mean a cabochon, bead, egg, sphere or tumbled stone as
defined in these regulations which has been artistically carved or sculptured.
(7) "Polish" shall mean the process commonly accepted in the lapidary trade
whereby fine abrasives and polishing powders are used to smooth a stone to a perfectmirror-like appearance without applying any lacquer or varnish.M
Ex 7103.10.10
Ex 7103.10.20Sugulite (also known as lavulite or lazulite):  unworked or simply sawn or roughly shaped M
72.04 Ferrous waste and scrap;  remelting scrap ingots or iron or steel H
7403.12 Refined copper:   wirebars H
7403.13 Refined copper:  billets H
7403.19 Refined copper:  other H
7403.21 Copper-zinc base alloys (brass) H
7403.22.90 Copper-tin base alloys (bronze) other H
7403.23 Copper-nickel base alloys (cupro-nickel) or copper-nickel-zinc base alloys (nickel silver) H
7404.00 Copper waste and scrap H
7503.00 Nickel waste and scrap H
7602.00 Aluminium waste and scrap H
7801.10.10 Lead ingots H
7802.00 Lead waste and scrape H
7803.00 Lead bars, rods, profiles and wire H
78.04 Lead plates, sheets, strip and foil;  lead powders and flakes H
7805.00 Lead tubes, pipes and tube or pipe fittings (for example, couplings, elbows, sleeves) H
7806.00 Other articles of lead H
7902.00 Zinc waste and scrap H
8002.00 Tin waste and scrap H
81.01 Tungsten (Wolfram) and articles thereof, including waste and scrap H
81.02 Molybdendum and articles thereof, including waste and scrap H
81.03 Tantalum and articles thereof, including waste and scrap H
8104.20 Magnesium waste and scrap H
81.07 Cadmium and articles thereof, including waste and scrap O
8110.00 Antimony and articles thereof, including waste and scrap O
8111.00 Manganese and articles thereof, including waste and scrap O
Ex 81.12 Beryllium, chromium, germanium, vanadium, gallium, hafnium, indium, niobium
(columbium) and articles of these metals, including waste and scrapO
Ex 8479.89.90
Ex 8479.90.90Automatic pool cleaners and parts thereof H
Ex 87.02
Ex 87.03Ex 87.04Motor cars and other motor vehicles principally designed for the transport of persons and
goods but excluding vehicles exported by diplomatic and foreign representatives and newvehicles exported by local manufacturers or their appointed agentsH
.. Not available.
a The code letters indicate the Government Department that controls the exportation of the product in question:
H Department of Trade and Industry.L Department of Agriculture.
M Department of Mineral and Energy Affairs.
N Department of National Health and Population Development.O Department of Environment Affairs.
W Department of Water Affairs and Forestry.
Source: Information provided by the South African authorities.SACU-South Africa WT/TPR/S/114/ZAF
Page A4-253
48. Export licences are valid for exports to an y country, including other SACU members.
Exporters should apply for a licence directly to the Directorate of Import and Export Control of DTI,
or to the government agency that controls the specific permit in question. The application procedure
and time required for obtaining export permits is the same as for import permits.
(iii) Export subsidies, finance, and assistance
49. Several types of incentive scheme are available to South African exporters for the promotion
and development of exports and export markets. Tr ade and Investment South Africa (TISA) of the
DTI, is responsible for the Export Marketing and Investment Assistance Scheme (EMIA). Assistance
under the EMIA scheme is to partially compensate South African exporters or enterprises for costs in
respect of activities aimed at attracting new FDI into South Africa, and developing export markets for
South African products and services, particularly in the black economic empowerment (BEE),historically disadvantaged businesses, and small, medium and micro-sized exporters (SMME)
segment markets.
 82
50. The EMIA has nine components: (i) primary export market research to partially compensate
exporters for costs incurred in developing new export markets, through personal contact with potential
foreign clients; (ii) foreign direct investment re search to partially compensate exporters for costs
incurred in attracting new FDI into South Africa, through personal contacts by visiting potential
investors in foreign countries; (iii) national pavilions to assist exporters to introduce their products
into foreign markets by participating in foreign exhibitions in a cost-effective manner; (iv) individual
exhibitions to assist individual exporters to exhibit products at exhibitions abroad where TISA does
not provide for a national pavilion; (v) outward selling trade missions to provide assistance to
exporters who wish to contact foreign buyers with  a view to concluding new export orders; (vi)
outward investment recruitment missions to assist enterprises participating in outward investmentmissions; (vii) inward buying trade missions to assist organizers of inward buying trade missions to
enable prospective buyers to contact South African exporters to conclude export orders; (viii) inward
investment missions to provide assistance to organi zers of inward investment missions to facilitate
FDI into South Africa; and (ix) sector specific assistance is provided to specific industrial sectors to
develop new export markets, broaden the export base, increase the participation and development ofBEE companies in the export process, and of SMEE's in the export process with specific regard to
backward linkages.
83
51. The Industrial Development Corporation (IDC),  a self-financing, state-owned, development
finance institution, established in 1940, continues to provide credit facilities to South African
exporters. Aimed at enabling them to offer competitive terms to foreign purchasers, the creditfacilities are still subject to a South African local-content requirement of at least 70%, and the
availability of export credit insurance cover from the Credit Guarantee Insurance Corporation
(CGIC).
84
52. Under the Duty Credit Certificate Scheme, DTI offers duty credit certificates to exporters of
textiles and clothing, with a view to enhancing their international competitiveness (Table AIII.1). The
                                                     
82 For a business to qualify as historically disadvantaged, it must be an SMME with at least 51% of the
business owned by a South African black person(s), women, or disabled person(s). SMME must comply with atleast two of the following quantitative criteria: total annua l turnover must be less than R 15 million; total assets,
excluding fixed property, must be less than R 5 million; and there must be less than 200 full time employees
(EMIA, 2002).
83 EMIA (2002).
84 For a description of the credit facilities provided by IDC (the Life Scheme, and the Low Interest Rate
Scheme for the Promotion of Exports), see WTO (1998).WT/TPR/S/114/ZAF Trade Policy Review
Page A4-254
South African Primary Steel Industry also continue s to promote exports of secondary steel products
by means of financial assistance through the Fund of the Committee for Secondary Manufacture, and
price rebate schemes.85 Other incentives are available for the promotion of manufacturing exports
(Chapter IV(4)).
53. The General Export Incentive Scheme (GEIS), introduced in 1990 to provide financial
assistance to any legal or natural person engaged in the export of certain categories of goods, ceasedoperations on 11 July 1997.
54. Rebates, refunds, and drawbacks of import duties remain the same as at the time of the
previous Review, and are available to all manuf acturing industries producing for export. The
concessions are granted on imported inputs, including raw materials and components used in
production of goods solely destined for export. Full rebates or refunds of customs duties are alsogranted on goods temporarily admitted for processing, repair, cleaning and reconditioning, or for
specific purposes (e.g. goods used at exhibitions and fairs), and on goods imported and then re-
exported in the same condition or state. The number of applications for drawbacks is relatively low,
apparently because of delays related to refunds. Exports are zero-rated, and therefore exporters qualify
for VAT refunds for all goods and services incorporated in their products.
55. The Short-Term Export Finance Guarantee Facility is still available to SMMEs exporters in
all sectors.
86 Foreign exchange cover is provided by the South African Reserve Bank through CGIC to
exporters of capital goods. According to the authorities, the cover is at rates higher than market rates.
Export Credit Reinsurance Schemes are available to South African exporters. The schemes consist of
reinsurance with the Government for insurance contracts in connection with export transactions, and
loans or similar facilities for such trans actions; they are available at market rates.
(iv) Other measures
56. Since its Review, South Africa has Spatial Development Initiative (SDIs) programme. The
SDIs aim to, inter alia , generate sustainable economic growth and development in relatively under-
developed areas, and exploit the under-utilized locational and economic advantages for export-
oriented growth.  They are located mainly in South Africa but some include part of a neighbouring
country (e.g. the Libombo Initiative between South Africa, Swaziland, and Mozambique). An integralpart of the SDI programme is the concept of industrial development zones (IDZs), a specialized
industrial area within an SDI. IDZs have been conceived as a shift from traditional export processing
zones strategies, to the development of leading-edge industrial development zones with a close
integration with the local productive sector (Chapter IV(4)).
57. According to the authorities, South Africa does not have any export quotas, nor does it
maintain voluntary export restraints.
(4) M
EASURES AFFECTING PRODUCTION AND TRADE
(i) Incentives
58. Many changes have been made to the incentive schemes since or shortly before the last
Review. Eighteen incentive schemes have been eliminated87;  eleven have remained in place88;  and
                                                     
85 For more details about the eligibility criteria for this Fund, see WTO (1998).
86 WTO (1998).
87 General Export Incentive Scheme (GEIS); Tax Holiday Scheme; Small-Medium Manufacturing
Development Programme (SMMDP); Regional Industrial Development Programme (RIDP); SimplifiedSACU-South Africa WT/TPR/S/114/ZAF
Page A4-255
21 have been introduced.89  Table AIII.1 presents a summary of the 32 incentive schemes currently
available to South African producers.
59. The incentives are managed by the Directorate of Trade and Industry (DTI), or by Khula or
the Industrial Development Corporation (IDC) two of its statutory institutions. Founded in 1966,
Khula is registered as an insurer, specialized in enhancing availability of loan and equity capital to
small, medium, and micro enterprises (SMME). IDC continues to provide financing facilities(medium to long-term low interest loans in general) for the establishment and expansion of
economically viable activities undertaken by industries in South Africa. It may also take equity in
industrial enterprises and provide buildings for general factory purposes to industrialists on a lease
basis.
(ii) State-owned enterprises and privatization
60. The restructuring of state-owned enterprises (SOEs), and of the privatization programme in
South Africa has been slow since the early 1990s. For example, the sale of the Government's
controlling interest in Telkom, the state telecomm unications company, was originally scheduled for
the second half of 2001 but was held up because of weak international market conditions, and delays
in formulating an appropriate regulatory framew ork (Chapter IV(5)). Moreover, a number of other
public companies identified for divestiture remain in state hands.  In 2000, South Africa notified the
WTO that it had abolished all agricultural marketin g boards, and that it did not maintain any state
trading enterprises as defined by Article XVII of the GATT 1994.
90 Table III.5 shows the SOEs to be
restructured.
61. In August 2000, South Africa launched a programme to accelerate the restructuring of
SOEs.91 The programme is in line with previous policy frameworks on the matter92, and is aimed at
increasing SOE efficiency through improved gove rnance and competition, while seeking to attract
foreign investment, technology, and expertise through full or partial privatization. South Africa
expects that most restructuring activities will be completed by 2004. In terms of contribution to the
                                                                                                                                                                    
Regional Industrial Development Programme (SRIDP); Medium-Term Loan Financing; Job Scheme; Multi-
Shift Scheme; Orchards Scheme; World Player Scheme; Normal Finance; Eco-Tourism Scheme; General
Tourism Scheme; Standard Leased Factory Building Scheme; Economic Empowerment Scheme; AcceleratedDepreciation; Business Loans for Retail Financial Intermediaries; and the Venture Capital Scheme, WTO(1998).
88 Competitiveness Fund; Sector Partnership Fund; Import Finance; Support Programme for Industrial
Innovation (SPII); Rebate Provisions; Motor Indust ry Development Programme (MIDP); Standard Credit
Guarantee Scheme; Emerging Entrepreneur Scheme; S eed Loans for Retail Finance Intermediaries (RFIs);
Capacity Building Support for RFIs; Duty Credit Certif icate Scheme for Exporters of Textiles and Clothing
(DCCS); and Work Place Challenge, WTO (1998).
89 Small and Medium Enterprise Development Programme (SMEDP); Skill Support Programme (SSP);
Critical Infrastructure Programme (CIP); Industrial Development Zones Programme (IDZ); Foreign Investment
Grant (FIG); Strategic Investment Programme (SIP); Ag ro-industries Development Finance; Bridging Finance
Scheme; DANIDA Business to Business Programme; Empowerment Finance; Entrepreneurial Mining andBeneficiation Finance; Equity Fund; Export Finance; Finance for the Expansion of a Manufacturing Sector;Khula Start; Finance for Textiles, Clothing, Leather, and Footwear Industries; Standard Credit GuaranteeScheme; Techno-Industry Development Finance; Technology and Human Resources for Industry Programme(THRIP); Technology Transfer Guarantee Fund; Tourism Development Finance; and Wholesale Finance .
90 WTO document G/STR/N/4-6/ZAF, 14 November 2000.
91 Ministry of Public Enterprises of South Africa (2000).
92 For example, the Reconstruction and Developm ent Programme, the Growth, Employment and
Redistribution (GEAR) strategy, and the National Framework Agreement (NFA). These are described in WTO(1998).WT/TPR/S/114/ZAF Trade Policy Review
Page A4-256
Budget, it is expected that the privatization of SOEs will generate at least R 40 billion, or about 5% of
GDP over the period 2002-04.93 The programme consists of, inter alia , redesigning business
management principles within enterprises, attracting strategic equity partnerships, divesting equity
either in whole or in part, and improving the restructuring process (through strategic analysis,
planning for enterprise restructuring, transaction management, and post-restructuring management).94
Table III.5
State-owned companies (SOCs) to be restructured, January 2003
Company ActivityPublicly owned
share
(per cent)Likely restructuring scenario
Category 1a
Eskom Electricity supply 100 30% disposal of generation to private sector
Telkom Telecommunications 70 IPO of 20%
Spoornet Rail transport 100 Continued public ownership of freight service
Concessioning of luxury rail service
S.A. Post Office Postal services 100 Undetermined
SABCbBroadcasting 100 Undetermined
South African Port Operations Ports 100 Concessioning of terminal operations
SARCC Rail commuting 100 Public ownership to be retained
Airports company Air transport services 100 IPO considered after 2004
Air traffic and navigational
servicesAir transport control 100 Undetermined
Agricultural boards Agricultural assistance 100 Undetermined
IDC Industrial development 100 Undetermined
Category 2c
Denel Manufacturing 100 30% to SEP
Petronet Oil/petrol pipeline 100 Undetermined
Nuclear Energy Corporation
of SAAtomic research 100 Undetermined
Armscor Armament procurement 100 Public ownership to be retained
Mossgas, Soeker (pty) Ltd Oil exploration 100 Merged into Petrosa (Pty) Ltd
SAA Air transport 95 Undetermined
Strategic fuel fund Fuel procurement 100 Undetermined
Foskor Mining 100 Undetermined
Category 3d
Sun Air Air transport 100 Privatized before end of 1997
Autonet Road transport 100 Restructured into new Transnet owned entity
Safcol Forestry 100 Presently undergoing disposal to private sector
Alexkor Alluvial diamond mining 100 51% be sold to SEP
Transkei AirwayseAir transport 100 Liquidated in December 1996
PxeParcel express 100 Liquidated
AbakoreAbattoirs 100 Liquidated
AventuraeHoliday resorts 100 Privatized by 2003
a Company with clear public policy.
b Six SABC radio stations have already been privatized to the value of R 516 million.
c Company with public policy dimensions/strategy.d Company with no public policy.
e Unprofitable company.
Source: Information provided by the South African authorities.
62. The programme focuses on the four major public enterprises that still operate under
monopoly, or hold exclusive rights: Telkom (tel ecommunications), Transnet (transport), Eskom
(electricity), and Denel (defence).95 Telkom will be divested, if possible before the end of the financial
year 2003/03, while the authorities try to finalize the necessary regulatory changes. In the case of
                                                     
93 WTO (1998).
94 Ministry of Public Enterprises of South Africa (2000).
95 These four companies account for about 91% of assets, provide 86% of turnover and generate 94%
of net income, while employing 77% of employees of the top 30 SOE (Ministry of Public Enterprises of SouthAfrica, 2000).SACU-South Africa WT/TPR/S/114/ZAF
Page A4-257
Denel, plans to bring in a strategic equity partner have been completed, and some progress has been
made in divesting, or preparing for sale, a number of non-core public assets. Eskom will be
corporatized, with generation, transmission, distribution, and non-core activities each forming a
separate entity. Different generation companies will be formed out of the existing 20 power stations.
Once competition among them has been established, private-sector participation in Eskom will be
introduced. Some of the nine divisions that compri se Transnet, such as Spoornet and Petronet, will be
corporatized and restructured prior to seeking a stra tegic equity partner and an eventual initial public
offering (IPO); whereas other divisions such as Coallink, Orex, Luxrail and Linkrail will be
concessioned. The airports regulatory framework is being revised; once it has been completed, and
subject to shareholder approval, an IPO will be processed.
(iii) Competition policy, and price controls
63. South Africa enacted a new Competition Act (Act No. 89 of 1998), which replaced the 1979
Maintenance and Promotion of Competition Act.96 The substantive and enforcement provisions of the
1979 legislation were weak. Weak competition law partly accounts for the high levels of
concentrations in the South African economy, and for the existence of business practices out of step
with the requirements of a competitive economy.97
64. The 1998 Competition Act aims to promote and maintain competition in South Africa in
order to: promote the efficiency, adaptability and development of the economy; provide consumers
with competitive prices and product choices; promote employment and advance the social and
economic welfare of South Africans; expand opportunities for South African participation in world
markets and recognize the role of foreign competition in South Africa; ensure that SMMEs have an
equitable opportunity to participate in the economy; and promote a greater spread of ownership, in
particular to increase the stakes of historically disadvantaged persons.98 The Act prohibits anti-
competitive practices between firms in vertical and horizontal relationships; prohibits abuse of a
dominant position; provides for restrictive practices to be exempted on specified grounds; and
requires notification of merger transactions above a specified threshold and of the regulation thereof.
The Act applies to all economic activities, although the Minister of Finance has the right to exclude
the jurisdiction of the Competition Commission if (s)h e deems that it is not in the interests of financial
stability to look at competitive effects. Banks, however, still have to notify any merger that meets
specified thresholds. These thresholds are standard for all mergers.
65. The Act also further restricts anti-competitive behaviour of state-owned enterprises,
especially when they compete unfairly with the private sector. Three institutions were created to
achieve the above objectives of the Act: the Co mpetition Commission, the Competition Tribunal, and
the Competition Appeal Court, which replaced the Competition Board.
66. The Competition Commission (CC), establis hed in October 1998, is a statutory body
responsible for investigating complaints made against firms about restrictive practices, and abuse of
dominant positions (defined as a market share of 35% or more)99; and for evaluating, approving or
prohibiting mergers and acquisitions. In addition, the CC conducts research, provides policy inputs,educates and informs stakeholders, and conducts regulatory and legislative reviews. In undertaking
                                                     
96 Certain provisions of the Act entered into effect in October 1998, and others in September 1999.
97 Competition Tribunal (2001), p.4.
98 Section 2 of the Act.
99 In terms of market dominance, outright dominance is determined if a firm has 45% of the market,
whereas a firm that has between 35% and 45% of the market  has the right to prove that it is not dominant. If a
firm has less than 35% of the market, it may still have market power if it is a market leader amongst numeroussmaller firms.WT/TPR/S/114/ZAF Trade Policy Review
Page A4-258
these functions, the CC must balance issues related to compliance with the broader social and
economic goals outlined in the Act, such as employment, international competitiveness, efficiency
and technology gains, as well as the ability of SMMEs owned or controlled by historically
disadvantaged persons to compete. In order to ensure the consistent application of the Act across
sectors, the CC may negotiate agreements with other regulatory authorities100, participate in their
proceedings, and advise or receive advice from any regulatory authority. The Commissioner is theChief Executive Officer of the CC; she/he is appointed for a five-year term, and is accountable to the
Minister of Trade and Industry and Parliament. The six divisions of the CC reflect its core activities:
enforcement and exemptions; mergers and acquisitions; compliance; legal services; policy and
research; and corporate services. Proceedings may be initiated ex officio, or at the request of an
interested party.   The decisions of the CC may be appealed to the Competition Tribunal and the
Competition Appeal Court.
67. The Competition Tribunal (CT), established in September 1999, is the court of first instance,
independent from the other competition institutions. It has jurisdiction throughout South Africa, and
adjudicates cases referred to it by the CC, or brought directly by an aggrieved party. In respect of
mergers, the CT authorizes or prohibits large mergers (with or without conditions); and adjudicatesappeals from the CC's decisions on intermediate merger s. In respect of anti-competitive practices, the
CT adjudicates complaints of prohibited conduct; grants or denies an order for interim relief; and
grants or denies an order for costs. Members of the CT, including the Chairperson, are appointed by
the President; they serve for a five-year term, but may be re-appointed for a second term. The
Chairperson may not serve for more than two consecutive terms.
68. The Competition Appeal Court (CAC), established in September 2000, has a status similar to
that of a High Court. It has jurisdiction throughout South Africa and is a court of record. Any personconvicted of an offence in terms of section 73(1) of  the Competition Act, or who fails to comply with
an order of the CT or the CAC, is liable, to a fine not exceeding R 500,000 or to imprisonment for a
period not exceeding ten years, or to both; or in any other case, to a fine not exceeding R 2,000 or to
imprisonment for a period not exceeding six months, or to both. The CT can also impose an
administrative fine, which may not exceed 10% of its annual turnover in South Africa and its exportsfrom the country during its preceding financial year.
101
69. When the Act first took effect, private companies were not satisfied with the stricter merger
control. They argued that the threshold applicable to mergers was too low, and that the fees charged
by the CC for its investigations were unnecessarily high. Since 1 February 2001, the lower threshold
for a compulsory notification was raised from R 50 million to R 200 million of combined assetsand/or turnover; and, for the target firm, from R 5 million to R 30 million of turnover assets. As a
consequence, fewer mergers will require compulsory notification. Also, the filing fees for large
mergers have been reduced from R500,000 to R250,000; and for intermediate mergers from a
maximum of R 125,000 to R 75,000.
70. During the financial year 1 April 2000 to 31 March 2001, the CC was notified of 407
mergers, against 331 the previous year. Most of th e mergers were horizontal, largely taking place in
the manufacturing sector, involving firms that compet ed in identical markets; 55 involved acquisitions
by foreign firms
102; a sample of 19 cases reviewed anticipated a total of 1,518 job losses due to
                                                     
100 For example, the Competition Commission interacts closely with the NER (National Electricity
Regulator) and ICASA (Independent Communications Authority of South Africa), and is investigating setting
up relations with the Financial Services Board (FSB), and the South African Reserve Bank.
101 Section 61(2) of the Act.
102 A recent survey noted that South Africa had recorded US$7.6 billion of cross-border inward and
outward mergers and acquisitions since June 2000. Competition Commission of South Africa (2001).SACU-South Africa WT/TPR/S/114/ZAF
Page A4-259
mergers, with 450 jobs created; and three mergers were prohibited (related to pharmaceutical, sugar,
and oil companies). Regarding prohibited practices, the CC dealt with 176 complaints, of which 123
were resolved, and 53 are still being investigated. Of the concluded cases, 24% belonged to the
manufacturing sector, 19% to retail, and 9% to the motor industry. Nine requests for exemption from
the application of Chapter 2 of the Act (horizontal, vertical, and abuse of dominant position) were
lodged, all relating primarily to restrictive horizontal practices: four to manufacturing; three topharmaceutical firms, and two to health care services. Four exemption applications were concluded.
71. During 2000/01 the CT issued 50 orders, up from 14 in the seven months to 31 March 2000.
Decisions were reached on 35 large mergers 
103, of which 29 were approved without conditions, four
with conditions, and two, regarding sugar and retail  companies, were prohibited. Some 83% of the
cases comprised horizontal mergers (i.e. competing firms selling the same products or providing thesame services), 11% were conglomerate mergers (i.e. firms conducting unrelated activities), and 6%
were vertical mergers (i.e. firms operating at different stages of production).
104 Eleven of the 19
complaints on restrictive practices were referred by the CC;  six were settled by consent orders, and
five are pending. Complaint referrals were filed by complainants, following a non-referral by the CC;
these are pending. There were also 17 applications for interim relief, of which six were withdrawn,three were taken off the roll, two were granted, three were denied and three are pending.
72. The Price Control Act (Act No. 25 of 1964) provides for a Price Controller who, inter alia ,
may determine, control or regulate the maximum prices of goods and services at both the
manufacturing and retail levels. Since the last Review, the producer prices of several agricultural
products such as meat, oil seeds, wheat, canned fruit, mohair, and sorghum, have been liberalized
after the marketing boards ceased to exist (Chapter IV(2)). However, the retail price of petroleum
products, such as coal, paraffin, petroleum, and the wh olesale price of diesel are still controlled by the
Department of Mineral and Energy Affairs; and the producer price of sugar is controlled by the Sugar
Association under the Sugar Act (Act No. 9 of 1978) administered by the DTI. The pricing of services
supplied by parastatals operating in various areas, such as telecommunications and transportation,
remains subject to Cabinet approval.
105
(iv) Protection of intellectual property rights
73. In 2002, the South African Companies Registra tion Office (SACRO), and the South African
Patents and Trademarks Office (SAPTO) were merged to form the Companies and Intellectual
Property Registration Office (CIPRO) of the DTI, which became the administering organ for
intellectual property in South Africa. The intellectual property legislation of South Africa mainly
consists of four acts: the Patents Act (Act No. 57 of 1978, as amended), the Trade Marks Act (Act No.194 of 1993), the Designs Act (Act No. 195 of 1993),  and the Copyright Act (Act No. 98 of 1978).
Other relevant laws include the Merchandise Marks Act (Act No. 17 of 1941), the Cinematographic
Films Act (Act No. 62 of 1977), the Performers' Pr otection Act (Act No. 11 of 1967), and the Plant
Breeders' Rights Act (Act No. 15 of 1976). Althoug h geographical indications may be protected under
                                                     
103 All large mergers having an effect within South Africa have to be approved by the CT. A merger is
considered large if the combined turnover or combined assets of target and acquiring firms exceed R3.5 billion;and the assets or turnover of the target firm exceed R 100 million.
104 23% of the mergers adjudicated formed part of multinational mergers, which were notified with
several competition authorities in the world. All were approved by the CT.
105 The pricing policies of parastatals are determined by the regulatory bodies such as ICASA and the
NER, as well as by regulatory bodies set up by the Department of Transport in specific areas such as roads, rail,maritime, and aviation. The rail regulator appears to be mo re focused on the safety aspects. These authorities are
approved by Cabinet.WT/TPR/S/114/ZAF Trade Policy Review
Page A4-260
the 1993 Trade Marks Act, there is no specific legislation in South Africa dealing with such
protection.106
74. The 1978 Patents Act covers all fields of technology; it provides for a patent term of 20 years
from the date of filing the application, without extension. The 1993 Trade Marks Act, provides for a
registration system, an opposition procedure within three months, and a term of protection of ten
years, renewable indefinitely for periods of ten years. The 1993 Designs Act, affords protection for a15-year term in the case of an aesthetic design, and a ten-year term in the case of a functional design.
The 1978 Copyright Act, among others, protects creative works and expressions; the term of
copyright protection is generally the lifetime of the author plus 50 years; protection for performers is
for 20 years, non-renewable.
75. In order to address the enforcement weaknesse s of the South African intellectual property
framework
107, there have been three major legislative changes since the last Review: the adoption of
the Counterfeit Goods Act (Act N o. 37 of 1997), the Intellectual Property Laws Amendment Act (Act
No. 38 of 1997), and the Copyright Amendment Act (Act No.9 of 2002).
76. The Counterfeit Goods Act was adopted to furthe r protect owners of trade marks, copyright,
and certain marks under the 1941 Merchandise Marks Act. The new Act covers offences in regard tocertain acts in relation to counterfeit goods, and to the possession of such goods. It provides for
inspectors and  certain members of the South African Police Service to be granted the power to enter
premises, search for, and if found, seize and remove, counterfeit goods, or suspected counterfeit
goods; it also provides the Commissioner for Customs and Excise with the power, upon application
by the owner of the intellectual property right, to  seize and detain counterfeit goods or suspected
counterfeit goods, imported into or entering South Africa. The 1997 Counterfeit Goods Act has not
yet been notified to the WTO.
 108
77. According to the authorities, the Intellectual Property Laws Amendment Act, amending the
1941 Merchandise Marks Act, the 1967 Performers’ Protection Act, the 1978 Patents Act, the 1978
Copyright Act, the 1993 Trade Marks Act, and the 1993 Designs Act, is aimed at bringing South
African intellectual property legislation in line  with the TRIPS Agreement. The Copyright Act of
1978 was amended so as to provide, inter alia , for the adjustment of the term of copyright in a
cinematography film, and for the extension of the scope of copyright in computer programs.
Amendments to the 1967 Performers' Protection Act include provision for the protection of
performances in WTO Member countries, and for the extension of the application of the Act to
performances that took place before its commencement. Amendments to the Patents Act of 1978 aim
to bring it in line with the TR IPS Agreement, and provide for the implementation of the Patent
Cooperation Treaty (PCT), to which South Africa became a party in March 1999. Amendments to the
1993 Trade Marks Act concern marks that may not be registered as trade marks, and the protection of
well-known trade marks. In amending the 1993 Design Act, the 1997 Act adjusts the provisions
regarding compulsory licences in respect of certain registered designs, and further regulates the effect
of the registration of a design and the amendment of an application for registration, and of a
                                                     
106 WTO (1998).
107 The Business Software Alliance of South Africa estimates that the level of pirated software (such as
counterfeiting, CD copying, hard disk loading, internal  copying by business, and internet piracy) could be as
high as 47%. The Motion Pictures Association estimates video and optical disc piracy to be 16% (USTR, 2002).
108 The Act is mentioned in WTO documents IP/N/6/ZAF/1 of 23 February 1998, and IP/Q4/ZAF/1 of
30 April 1999.SACU-South Africa WT/TPR/S/114/ZAF
Page A4-261
registration of a design. South Africa has still to notify the WTO of its Intellectual Property Laws
Amendment Act. 109
78. The Copyright Amendment Act (Act No. 9 of 2002), was adopted in June 2002. It further
amends the 1978 Copyright Act, by providing, inter alia , for the substitution of the Minister of Trade
and Industry for the Minister of Economic Affairs, as the competent authority to make regulations on
any matter required or permitted by the Act, and on any matter considered necessary or expedient toprescribe in order for the Act to achieve its objectives. The 2002 Copyright Amendment Act also
makes further provision regarding the nature of copyright in sound recording, conferring additional
rights to its owner. South Africa has not yet notified the WTO of its Copyright Amendment Act.
79. In April 2001, after a three-year protracted legal battle with the South African Government,
39 drug companies, represented by the Pharmaceutical Manufacturers Association (PMA) of SouthAfrica, dropped its court challenge to South Africa's Medicines and Related Substances Control
Amendment Act. The case concerned the right of the South African Government to permit parallel
imports, or to grant compulsory licensing of patented drugs. In the agreement with the PMA, the
authorities agreed that the implementation of the country's Medicines Control Act would be consistent
with both the South African Constitution and South Africa's WTO TRIPS obligations.
80. The Counterfeit Goods Act (Act No. 37 of 1997) and the Copyright Act (Act No. 98 of 1978)
provide the overall legislative framework regarding sanctions for the various offences under
intellectual property rights in South Africa. The ma ximum fine for first time violations of counterfeit
goods is R 5,000 per item and/or imprisonment for three years. For second time offences, the
maximum fine is R 10,000 and/or imprisonment for five years. Civil suits relating to damages may
also be brought. Proceedings are conducted in the High Court, or the Court of the Commissioner of
Patents in the case of patents. Failure by a defendant to comply with an order of the High Court or theCourt of the Commissioner of Patents amounts to co ntempt of court, a criminal offence in South
Africa. Appeals may be made to  the Supreme Court of Appeal.
81. South Africa is a member of the World Intell ectual Property Organization (WIPO), and a
signatory to the Paris Convention for the protecti on of industrial property, the Berne Convention on
Copyright, and the Budapest Treaty on the International Recognition of the Deposit ofMicro-organisms. South Africa signed both th e WIPO Copyright Treaty (WCT), and the WIPO
Performances and Phonograms Treaty (WPPT), in December 1997, and the Patent Cooperation Treaty
in March 1999.
                                                     
109 The Act is mentioned in WTO documents IP/Q3/ZAF/1 of 2 October 1998, and  IP/Q2/ZAF/1 of
12 May 1997.WT/TPR/S/114/ZAF Trade Policy Review
Page A4-262
IV. TRADE POLICIES AND PRACTICES BY SECTOR
(1) O VERVIEW
1. In 2001, the South African authorities announced an action plan to move the economy to a
high growth path, increase competitiveness and efficiency, raise employment levels, and reduce
persistent poverty and inequality.110 These objectives are expected to be best achieved by giving
special attention to five economic activities demonstrating a high potential for growth and jobcreation: agriculture, tourism, cultural industries, certain "export activities" (e.g. autos, textiles,
chemicals, and mining), and the information and telecommunication industry.
111 At the same time,
there are plans to liberalize, and make more efficient, three critical input subsectors still dominated by
state-owned enterprises: energy, telecommunications, and transport.
2. Agriculture remains an important sector in the economy despite its small, decreasing share of
total GDP, at 2.8%  in 2001112, from 3.5% in 1996. Agriculture has strong economic and employment
linkages with the other sectors of the economy, contributing 8.2% of total merchandise exports in
2001 down from 9.4% in 1996. In 2001, agriculture employed about 11% of the labour force, from
7% in 1996. Since the last Review, the sector has undergone substantial market reforms, including the
elimination of all marketing boards. As a result, agriculture is protected mainly by tariffs (5.5%
average MFN rate), though some non-tariff measures still exist.
3. The mining industry remains a key activity for growth and development in South Africa. The
direct contribution of the sector to GDP  rose from 6.9% in 1996 to 7.5% in 2001.113 In 2001, minerals
and mineral products accounted for 34.3% of South Africa's total exports of goods. Platinum group
metals have overtaken gold as South Africa's largest export. Tariff protection for the sector is
relatively low (0.7% on average).
4. Manufacturing accounted for 18.6% of South Africa's GDP in 2001, compared with 20.2%  in
1996. The share of manufacturing exports to total exports increased from 39% in the first half of the
1990s to over 50% in 2001.114 Labour productivity in the sector has increased by 26% since 1994,
with the consequent decline in employment.115 Tariff protection in the sector has decreased since the
previous TPR (from 15.6% in 1997 to 11.8% in 2002), but high rates still apply to certain
manufactured products:  textiles, clothing and related products remain the most protected, with the ad
valorem  components of certain tariffs ranging up to 60% (Chart IV.1).
5. The share of services (excluding wholesale and retail) in GDP rose from about 34.2% in 1996
to 38.5%  in 2001. Three state-owned enterprises, Telkom (telecommunications), Transnet (transport),
and Eskom (energy), continue to dominate services activities, and still operate under monopoly, or
hold exclusive rights in several branches of the sector. Liberalization of services should improve theefficiency of other economic activities and the competitiveness of South Africa's exports, especially
by reducing costs related to telecommunications, transport, and energy.
                                                     
110 State to the Nation Address by the President, 9 February 2001.
111 DTI (2002).
112 The agri-food complex, which consists of primary production plus input and agri-processing
activities, accounted for about 14% of GDP in 2000 (DTI, 2002).
113 With the indirect multiplier effects of the mining industry (e.g. about 30% of South Africa's liquid
fuels and 90% of electricity are produced  from coal), the overall contribution of the sector to GDP rises to about
10% in 2000 (DTI, 2002).
114DTI (2002).
115 DTI (2002).SACU-South Africa WT/TPR/S/114/ZAF
Page A4-263
010203040506070Chart IV.1
SACU's tariff by ISIC classsification, 2002
Percent
WTO Secretariat calculations, based on data provided by South Africa.AverageMaximum
Minimum
International Standard Industrial Classification, Revision 2
Source :111 
121 
122130
210
220230
390
311312
313
314321
322
323
324
331332
341
342
351Description
Agricultural and livestock production
Forestry
LoggingFishing
Coal mining
Crude petroleum and natural gas productionMetal ore mining
Other mining
Food productionOther food products and animal feeds
Beverages
Tobacco manufacturingTextiles
Manufacture of wearing apparel, except footwear
Leather products, except footwear and wearing apparel
Footwear, except vulcanized rubber or plastic footwear
Wood and wood 
products, excwe pt furniture
Manufacture of furniture and fixture, except primary of 
metal
Paper productsPrinting and publishing and allied industries
Industrial chemicalsDescription
Other chemicals, including pharmaceutical
Petroleum refineries
Munufacture of miscellaneous petroleum and coalproducts
Manufacture of plastic products n.e.s.
Rubber productsManufacture of plastic products n.e.s.
Pottery and china
Manufactur of glass and glass productsOther non-metallic mineral products
Iron and steel basic industries
Non-ferrous metal basic industriesFabricated metal products, except machinery and 
equipment
Non-electrical machinery including computersElectrical machinery apparatus, appliances and 
supplies
Transport equipmentProfessional and scientific equipment
Other manufacturing industries
Electrical energy352
353
354
355
356361
362
362369
371
372381
382
383
384
385
390
410WT/TPR/S/114/ZAF Trade Policy Review
Page A4-264
(2) A GRICULTURE AND RELATED ACTIVITIES
6. More than 85% of South Africa's total surface is used for agriculture and forestry. Agriculture
is very diverse, due to conditions ranging from temperate to sub-tropical. The sector remains dualistic:
large modern farms, the commercial branch of the sector, coexist with small-scale units whose owners
rely largely on traditional farming methods and farm on a subsistence basis. There are approximately
50,000 large-scale commercial farmers employing about 1 million workers, or 11% of total
formal-sector employment.116 More than half of South Africa's provinces, and about 40% of the to be
population, are dependent on agriculture and related activities.
7. About one fourth of South Africa's small-scale farmers earn income from livestock
production.117 Livestock farming in the small sector is technically inefficient118, while that of
commercial farmers is "first-world". South Africa is also endowed with abundant fishing resources, as
well as natural forests and plantations that play an important role in rural development. Commercial
forestry covers around 1.5 ha., about 1% of the land area, while fishing provides livelihood for many
communities (including some of the most impoverished) along the 3,000 km of coastline.
(i) Policy developments
8. Agriculture has undergone substantial market reforms since the last Review of South Africa,
and some progress has been achieved in eliminating inefficiencies, in particular the distortions in price
and other market signals. By early 1998, all marketing boards had ceased operation.119 The
Government also abolished the Agricultural Credit Board (ACB), which provided cheap credit to
commercial farmers and support through rollovers of loans to indebted farmers. Virtually all price
controls were removed and single-channel markets disappeared with the abolition of control boards.
9. Since the last Review, an agricultural futures market was created, allowing farmers to manage
risk in the sector. The Agro-industries Development Finance, a medium-term finance scheme, hasalso been made  available to local producers who wish to develop agricultural, food, beverage, and
marine activities (Table AIII.1).
10. One of the main problems of the agriculture sector is the inequality that persists in
land-ownership. Land distribution in South Africa is among the most highly skewed in the world, with
large capital-intensive farms dominating much of the rural areas.
120 Following the slow progress with
                                                     
116 According to the author ities, commercial farms provide livelihood and housing to about 6 million
family members. There are also 240,000 small farmers who provide livelihood to more than 1 million of their
family members. Furthermore, there are an estimated 3 million household farmers, who are located mainly in
the communal areas of the former homelands, and almost all rural towns are dependent on primary agricultureand related activities, such as agri-tourism and game-farming activities (Ministry of Agriculture and LandAffairs, 1998).
117 Cattle account for between 80% and 90% of the asset value of livestock in the small-scale sector
(Ministry of Agriculture and Land Affairs, 1998).
118 Reproduction rates are low, the control of important parasites is patchy, supplementary feeding is
virtually unknown, and livestock and cultivation are practised in isolation from each other, even though manyhouseholds have their own stock and produce crops (Ministry of Agriculture and Land Affairs, 1998).
119 Control boards existed for, inter alia : citrus fruit; dairy products; decidious fruit; dried fruit; meat;
lucerne seed; maize; oilseeds; tob acco; winter cereals; canning fruit; woo l; cotton; sorghum; eggs; and mohair.
These state-trading enterprises were abolished as notified in WTO document G/STR/N/4-6/ZAF,
14 November 2000. Assets of these marketing boards were transferred to industry trusts, which provide servicessuch as market information, export advice, and product development.
120 The result is that only 28% of South Africa's rural population, a large proportion of whom are farm
workers and their dependants, live on about 88% of the agricultural land. Thus, the remaining 12% ofSACU-South Africa WT/TPR/S/114/ZAF
Page A4-265
land redistribution since 1994, the programme of land reform has been recently redesigned.121 The
Land Reform for Agricultural Development (LRAD) is a "market-based programme of state directed
land restitution and land redistribution", which aims to expand the range of support measures that will
enable previously disadvantaged South African citizens to access land and agricultural services,
specifically for agricultural development.122 Land restitution seeks to compensate and restore land to
dispossessed people. The Government is trying to ensure that the land restitution is dealt with speedilyand efficiently. Land redistribution is based on a willing buyer-willing seller principle with financial
support from Government, and has been moving slowly. This reflects the limited supply of land
coming onto the market, and a much smaller number of restitution claims than had initially been
expected. In 2001, there was a shift of emphasis towards fast-track land redistribution. The policy is
being criticized for not addressing the problem of the landless rural poor.
123 Another controversial
issue is the communal land system in the former homelands, where administration is in the hands of
both unelected tribal and elected local authorities.
11. The Strategic Plan for South African Agriculture124, released on 27 November 2001,
recognizes that the sector is still plagued by a host of policy and institutional constraints that prevent it
from operating at full potential: constrained competitiveness and low profitability; skewedparticipation; low investor confidence in agriculture; inadequate, ineffective and inefficient support
and delivery systems; and poor and unsustainable ma nagement of natural resources. In addressing
these constraints, the Plan consists of three core strategies: (i) enhance equitable access and
participation in the agricultural sector; (ii) improve global competitiveness and profitability; and (iii)
ensure sustainable resource management.
125
12. Import and export controls are maintained on agricultural products (by means of permits
issued by the Director of Imports and Exports under the DTI on the recommendation of theDepartment of Agriculture). Import controls appl y to fish, crustaceans, and molluscs (Table III.2).
Export controls on coffee and wattle seeds have been eliminated, but some other goods are still
subject to export controls (Table III.4). Veterinary permits are required for the importation of live
animals, and imports of plants and plant products are subject to authorization and certification
(Chapter III(2)(iv)(b)).
13. By ISIC (Revision 2), the simple average MFN tariff in agriculture decreased slightly from
5.6% in 1997 to 5.5% in 2002 (Main Report, Chapter III(3)(ii)). Imports of agricultural products, such
as live animals, and products of animal origin are duty free; whereas rates on beverages, tobacco
                                                                                                                                                                    
agricultural land supports 72% of the rural population in the overcrowded former homelands, which lack the
infrastructure for successful agriculture (Ministry for Agriculture and Land Affairs, 1998).
121 At the end of apartheid in 1994, the authorities set a target to redistribute 30% of farmland by 1999.
However, by then, only 3% of agricultural land had been redistributed, and the process has been dogged withadministrative delays. The Government's land restitution programme has only gained momentum recently: 48 ofthe 69,000 claims were dealt with in 1998, compared with 29,000 in 2001. A recent report by the University ofWestern Cape indicates that most of these were settled in cash rather than land, and that the remainder would
take 150 years to complete at current budgetary levels (EIU, 2002).
122 The LRAD states that all possible options to secure rapid and sustainable land reform will be
pursued, beginning with the disposal of publicly owned agricultural land. This will be complemented bymeasures such as equity sharing schemes, contract fa rming, rental farming, tenure reform, and private land
acquisition.
123 EIU (2002).
124 The Plan was drafted jointly by the Department of Agriculture of South Africa, the National African
Farmers' Union, and Agri South Africa (industry representatives).
125 The following supporting actions, which are cross-cutting to the core strategies, are identified in the
Plan: good governance, integrated and sustainable rural development, knowledge and innovation, internationalcooperation, and safety and security.WT/TPR/S/114/ZAF Trade Policy Review
Page A4-266
products, meat, and fishery products are more than twice the mean. Moreover, mixed, specific,
compound, and formula duties apply, mainly to agricultural products.
14. Tariff quotas apply to a range of agricultural products, under the minimum market-access
commitments, at maximum tariffs of 20% of the bound rates (Main Report, Chapter III(3)(i) and
Table AIII.1).
15. In the on-going WTO agriculture negotiations, South Africa believes that developed countries
must substantially and progressively reduce distorting domestic-support measures, and eliminate
export subsidies in the shortest possible time, while the multilateral trading system should maintain
the necessary flexibility for developing nations to address developmental issues. South Africa has also
indicated that further market access commitments by developing countries can only be agreed to once
developed countries have agreed to substantial reductions in trade and production-distorting domesticsupport.
(ii) Policy by key product category
(a) Maize
16. Maizes continue to be South Africa's most important field crop, and white maize is the staple
food for the majority of the population. Over the past  five years, there has been a swing towards the
production of white maize.
 The present ratio of production is 57% white and 43% yellow maize.126 In
2001, maize contributed 38.5% to the gross income from all field crops, the average annual gross
value of maize for the past five years amounts to R 5,481 million;  it accounted for 3.4% of total
agricultural exports. Maize is produced by both commercial and small-scale farmers in most parts of
South Africa. Since 30 April 1997, after the termination of the Maize Board, no statutory levies have
been applicable, and the marketing of maize is free from government intervention.127 Producers
negotiate, according to market forces, spot, contract or future prices. If the 21-day moving averagef.o.b. price of maize in the United States deviates more than US$7/ton from the reference price of
US$92.07/ton, a new tariff will be triggered.
128 Table IV.1 provides data on production, consumption,
producer prices, and trade of maize from 1997/98 to 2001/02.  The import duty for maize is calculated
according to a formula incorporating a world price with the relevant exchange rate. Table IV.1
provides data on production, consumption, producer prices, and trade in maize from 1997/98 to2002/03.
Table IV.1
Maize production, consumption, prices, and trade, 1997-03
('000 tonnes)
Year Imports Exports Production ConsumptionProducer prices
(R/ton)
1997/98 109 1,921  9,732 6,594   584.5
1998/99   98 1,388  7,256 7,500   592.5
1999/00 569   652  7,311 7,327   644.9
2000/01     0 1,483 10,409 7,619   622.9
2001/02a395 1,335  7,936 7,690   984.7
2002/03a844 1,165  8,436 7,481 1,500.0
aP r e l i m i n a r y .
Source: Information provided by the South African authorities.
                                                     
126 Yellow maize is mainly cultivated for animal consumption. National Department of Agriculture of
South Africa (2001).
127 Before 30 April 1997, the Maize Board administered various arrangements relating to the marketing
of maize. The various marketing functions were funded by means of statutory levies.
128 National Department of Agriculture of South Africa (2001).SACU-South Africa WT/TPR/S/114/ZAF
Page A4-267
(b) Wheat
17. Most of the wheat produced in South Africa is bread wheat, with a little durum wheat
produced in certain areas; there are almost no exports. The wheat market has been deregulated since 1
November 1997, and wheat can now be traded freely. No statutory levies are applicable to the
marketing of wheat in South Africa. The duty for wheat is calculated using a formula incorporating a
world price and a relevant exchange rate. Import tariffs on products from milling industries, starches,inulin, and wheat gluten range up to 20%. Table IV.2 provides data on production, consumption,
producer prices, and trade in wheat from 1997/98 to 2002/03.
Table IV.2
Wheat production, consumption, prices, and trade, 1997-03
('000 tonnes)
Year Imports Exports Production ConsumptionProducer prices
(R/ton)
1997/98 469   79 2,449 2,421   817.8
1998/99 484   75 1,884 2,406   808.2
1999/00 624   72 1,725 2,450   960.6
2000/01 308   84 2,282 2,522 1,165.4
2001/02a408 137 2,281 2,620 1,421.6
2002/03a686 130 2,322 2,742 1,550.0
aP r e l i m i n a r y .
Source: Information provided by the South African authorities.
(c) Sugar
18. In 2001, sugar cane represented 22% of gross income from field crops. The most important
development in the South African sugar industry over  the past decade has been the substantial growth
of the small-scale sugar-cane grower sector. The area under cane planted by small-scale producers
increased to 85,418 hectares, on which 15% of the total cane crop was produced. The proportion of
exports in total sugar production increased from 53% in 1999/00 to 55% in 2000/01, due in part to the
decreasing share of Zimbabwe in the SACU market. In 2001, sugar exports represented 56% ofagricultural exports. Import tariffs range from zero on cane molasses, and fructose syrup to 25% on
sugar and sugar confectionery (down from 27.5% in 1997). Table IV.3 provides data on production,
consumption, producer prices, and trade in sugar from 1997/98 to 2001/02.
Table IV.3
Sugar production, consumption, prices, and trade, 1997-02('000 tonnes)
Year Imports Exports Production ConsumptionProducer prices
(R/ton)
1997/98 59 1,204 2,240 1,335 119.7
1998/99 57 1,485 2,646 1,220 125.5
1999/00 42 0,990 2,532 1,195 122.2
2000/01 52 1,420 2,729 1,231 132.2
2001/02a52 1,257 2,396 1,240 161.0
aP r e l i m i n a r y .
Source: Information provided by the South African authorities.
19. The South African Sugar Association (SASA)  has no statutory marketing powers, and is no
longer the sole sugar exporter. However, the Sugar Agreement of 2000 allows raw sugar to be
exported only through a single channel industry arrangement. Individual milling companies areWT/TPR/S/114/ZAF Trade Policy Review
Page A4-268
responsible for the exportation of their own refined and direct consumption of raw sugar.  Apart from
pest and disease control, production is not controlled in terms of government regulation.  SASA still
provides financial assistance through the Small Ca ne Grower's Financial Aid Fund. The two-tier price
system introduced in the 1985/86 season remains in operation.129 Sugar was excluded from the TDCA
between the EU and South Africa (Chapter II(2)(i)).
(d) Wine20. South Africa is the seventh-largest wine producer, having contributed 2.8% of the world's
wine in 2001, despite ranking 16
th in the world in terms of area under vines (105,566 hectares). The
wine industry is labour intensive130, and from 1996, there was a shift from white to red wines, causing
a big increase in the production of red wine varieties. In 2000, Europe accounted for 82.7% of South
African wine exports. However, the Wines and Spirits Agreement between South Africa and the EUprevents South African producers from using, inter alia , the terms "port", "sherry", "ouzo", and
"grappa".
21. During 2001, the Wine Industry Forum (WIF) requested the continuation of the following
statutory measures related to the Marketing of Agricultural Products Act (Act No. 47 of 1996):
registration, records and returns, information levy, research and development levy, and wine exportgeneric promotion levy. The information levy is used to fund the registration of industry role-players
and ensure the collection and dissemination of information relating to various products in the wine
industry; it amounts to R 7.00/ton of grapes, R0.01 per litre of grape juice concentrate, and R 0.01 per
litre of drinking wine.
22. The objectives of the Research and Development Levy are to support the wine industry with
expertise, enabling it to be cost effective while producing quality wines and other grape-based
products through the application of environmentally friendly technologies, training and education, aculture of technological innovation and the dissemin ation thereof to all sectors of the industry, the
development of resources for the poor and previously disadvantaged farmers, and the establishment of
world leadership in selected niche markets. The levy amounts to R 8.40/ton of grapes, R 0.012 per
litre of grape juice concentrate, R 0.012 per litre of drinking wine, and R 0.01 per litre of distilling
wine and wine spirit.
23. The wine export generic promotion levy (R 0.05 per litre of exported wine) is aimed at
increasing the profit margin for the industry in e ach focus market. The statutory measures came into
effect 24 December 2001 and will lapse on 31 Oc tober 2005. The South African Wine Industry
Information and Systems (SAWIS) administers the implementation, inspection, and the enforcement
of statutory measures. According to the authorities, wines and spirits are no longer subject to importcontrols or minimum prices; and the Cooperative  Wine Growers Association (KWV) no longer has
statutory powers.
24. In general, beverages, spirits, and vinegar are subject to specific tariffs and excise duties; ad
valorem  tariff rates on these products range up to 25%. The 1989 Liquor Products Act provides for
control, over the sale, production, import and export of alcoholic products, excluding beer andmedicines, mainly for quality control purposes. For quality control purposes, certain liquor products
are subject to export certification to most destinations.
                                                     
129 See WTO (1998).
130 In 2001, the wine industry provided a living to approximately 345,000 workers and dependants, and
employed 3,500 wine cellar personnel. Wine is mainly produced in the Western Cape, and along the OrangeRiver in the Northern Cape. There are estimated to be around 4,500 primary wine producers. NationalDepartment of Agriculture of South Africa (2001).SACU-South Africa WT/TPR/S/114/ZAF
Page A4-269
(e) Livestock
25. Approximately 60% of the total area of South Africa consists of natural grazing and is
suitable only for cattle, sheep, goats, donkeys, and wildlife. Cattle farms range from less than 50 head
of cattle to more than 1,000. The red meat industry is one of the most important in the agriculture
sector;  it contributed 12.7% to the gross value of agricultural production in 2000/01. Following the
abolition of the Meat Board in 1997, the South African Meat Industry Company (SAMIC) managesfour of the functions previously performed by th e Board: liaison, industry information, R&D, and
food standards. The outbreak of foot-and-mout h disease in South Africa in September 2000
threatened the red meat industry, but according to the authorities, it was under control by
November 2000. Imports of live animals are duty free, while import tariffs range to 40% on meat and
edible meat offal, and to 50% on preparations of meat.
26. Milk production is the fourth largest agricultural industry in South Africa. Local production
has decreased since 1999, due to a fall in the price caused by an oversupply in 1998/99, followed by
severe shortages in 2000/01. To make up for the shortages, imports of dairy products have increased
since 2000/01. Imports of dairy products are mostly subject to specific tariffs; ad valorem  rates range
to 22%.
27. Wool, mainly apparel wool, is produced throughout South Africa. Since 1 September 1997,
wool marketing in South Africa is free of statutory intervention. In 2001, South Africa had a 63%
share in world production of mohair, which it exports mainly to the United Kingdom, the Republic of
Korea, and Turkey. Imports of silk are duty free, while imports of wool and fine or coarse animal hair,
are subject to rates up to 24%. The export prohibition on live ostriches and their fertilized eggs was
lifted in 1997 with the Livestock Improvement Amendment Act (Act No. 60 of 1997).
(f) Fishing28. Annual earnings of the fishing subsector are estimated at R 2.5 billion. Fishing  provides
25,000 direct jobs and 60,000 indirect and casual jobs. Seafood caught in South Africa's waters
include pelagic fish, hake, abalone, rock lobster, squid, shark, and seaweed.  Import tariffs range from
zero on live fish to 30% on meal and pallets of cooked lobster, with an average of 20.8% on fishing
products. Specific tariffs apply to a large variety of seafood; certain fishery products are subject tomixed tariffs. MFN tariffs on fishery products are not bound (Main Report, Chapter III(3)(ii)). The
South African Bureau of Standards has set compulsory production standards for the seafood
processing industry.
29. In 1998, the Department of Environmental Affairs and Tourism (DEAT) promulgated the
Marine Living Resources Act (MLRA), stipulating broad policy guidelines on fisheries management,access rights, transformation, and empowerment issues. However, the MLRA did not define clear
guidelines for allocation of fishing rights, which has caused continual litigation, and in general a
fishing industry in crisis.
131 Moreover, many fishing activities are overexploited, and over-fishing has
given rise to strict catch quotas since 1983. The Government determines annually the "total allowable
catch" of species such as pilchards, anchovy, abalone, lobster, sole, and hake on the basis of scientificsurveys; catches of other species of seafood in South Africa's waters are not subject to quotas. In an
attempt to redress the inequalities in the fishing industry, the DEAT has been trying to improve the
process of allocating fishing rights. One of its main concepts is self-regulation of the industry, and it is
envisaged that each individual fishing activity wi ll develop a set of guidelines to govern its
operation.
132 The aim of DEAT is to issue long-term rights for most, if not all fisheries, by 2002. The
                                                     
131 Department of Environmental Affairs and Tourism (2000).
132 Department of Environmental Affairs and Tourism (2000).WT/TPR/S/114/ZAF Trade Policy Review
Page A4-270
DEAT has also been trying to promote "black  economic empowerment" (BEE) in the South African
fishing industry, both in terms of asset ownership and employment equity.133
(g) Forestry
30. Forestry contributes 0.6% to South Africa's nominal GDP. South Africa is endowed with both
indigenous forests and plantations. The main products of the forestry subsector are pulpwood,
sawlogs, and veneer logs. Tariffs range from zero  on pulp of wood, to 30% on wood and its products.
Tariffs on paper and paper products range to 20%. Tariff escalation is present on wood products, and
paper products (Main Report, Chapter III(3)(ii)).
31. Since its last Review, South Africa's forestry has continued its transformation. In 1998, the
Department of Water Affairs and Forestry, promulgated the National Forests Act (Act No. 84 of
1998) to ensure that the country's forest resources are protected, used, developed, conserved,managed, and controlled in a sustainable manner.
134 In terms of the 1996 Forestry White Paper, the
Government should have ceased to manage plantations and forests in 2001, but it continues to do so.
The South African Forestry Company Limited (SAFCOL), which has been earmarked for
privatization for several years, remains state-owne d. South Africa participates in the SADC Forests
Protocol, which was concluded in October 2001, and aims to promote the development, conservation,
management, sustainable utilization, and trade of al l types of forests and trees throughout the region.
(3) M INING AND QUARRYING
(i) Overview
32. The mining and quarrying sector remains at the heart of South Africa's economy, despite a
decline in gold production in the last few years. In 2001, platinum group metals (PMGs) overtook
gold as South Africa's largest export. The sector continues to be a major magnet for investment,
accounting for more than 30% of total market capitalization of the Johannesburg Securities Exchange(JSE); it contributed 10.1% to gross fixed capital formation in 2001.
135 The South African mining
industry is to undertake capital projects for R 53 billion during 2000-04.136
33. In 2001, South Africa had the world's largest known reserves of gold, manganese, platinum
metals, chromium, vanadium, and alumino-silicates; second largest reserves of vermiculite, zirconium
minerals, titanium minerals; third largest of fluorspar; fourth largest of antimony, uranium, andphosphate rock; fifth largest reserves of coal and lead; and sixth of nickel. Other industrially
important metals, minerals and rocks found in South Africa include granite, copper, and iron-ore.
South Africa is also the world largest supplier of ferro-alloys and a leading producer of steel.
34. On 10 October 2002, South Africa enacted the Mineral and Petroleum Resources
Development Act (Act No. 28 of 2002), replacing the 1991 Minerals Act. The new Act seeks to put anend to the historic system of private ownershi p of mines, and the existing monopoly over economic
control of the industry in South Africa, by promoting "black economic empowerment" (BEE), and
security of tenure of mining rights. The Chamber of Mines, which represents all the major mining
companies, expressed concerns about: the vagueness of the mechanisms and criteria for promoting
                                                     
133 In the hake longline fishery, for example, 80.4% of fishing rights have been allocated to companies
that are majority-owned by "histo rically disadvantaged individuals".
134 An Amendment to the National Forests Act is in process to provide for the creation of a trust to hold
rental income for land reform beneficiaries.
135 Department of Mineral and Energy of South Africa (2001).
136 Department of Mineral and Energy of South Africa (2001).SACU-South Africa WT/TPR/S/114/ZAF
Page A4-271
BEE; the delegation of powers to the Minister of Minerals and Energy in respect of BEE regulations;
and the security of tenure under the transitional arrangements, under which existing (old order)
mining and prospecting rights may "securely" be converted into 30-year "new order" rights.137
35. Since the last Review of South Africa, the Entrepreneurial Mining and Beneficiation Finance,
a medium-term finance scheme, has been made available to local producers for the development of
small, and medium-sized mining and jewellery activities (Table AIII.1). Mineral products subject toexport control include aluminium waste and scrap; iceland spar; iron and steel in unworked or semi-
worked form; lead ores, concentrates, powders, and flakes; sugulite; tin, scrap and tin-bearing
residues; tiger's-eye; and zinc in the form of virgin zinc, remelted zinc, old zinc, cuttings, hard zinc
and zinc ashes.  Controls are exercised by means of permits.  Exports of unprocessed tiger's-eye are
prohibited. Mineral products subject to import controls, including by means of licences, includemineral fuels, mineral oils and products of their distillation, radioactive chemical elements and
radioactive isotopes, gold and coins, cobalt, cadmium, antimony, manganese, niobium, germanium,
vanadium, gallium, hafnium, indium, rhenium, and thallium.  Tariffs average 0.7% in mining and
quarrying (down from 1.4% in 1997), and range from zero on, inter alia , crude petroleum oils and oils
obtained from bituminous minerals, natural gas, coal, electricity, nickel, lead, zinc, tin, and other basemetals such as silver, gold, platinum and precious and semi-precious stones, not further worked than
semi-manufactured, to 10% salt and pure sodium chloride. Petroleum products are subject to specific
duties; specific excise duties also apply to some mineral products; and tariff escalation is mixed in
petroleum, coal, and basic metal industries (Main Report, Chapter III(3)(ii)).
(ii) Policy by type of product
(a) Gold
36. There have been no major changes in terms of either policy or organization of the gold
subsector since the last Review.  Following a European Central Bank agreement on gold price in
September 1999, the uncertainty regarding central bank sales and lending that characterized the
market in the preceding two years, ceased to be key factors. Nevertheless, during the last few years
there has been ongoing restructuring in the gold mining subsector (e.g. acquisitions, mergers, and the
closing of some mines) in response to cost and price pressures. Production declined by 19% due todepletion of reserves and low gold prices during 1997-01. Over the past decade, the number of
employees in gold mines has more than halved, from 432,656 in 1991 to 203,577 in 2001.
138
However, South Africa still accounts for 15% of global mine supply and remains the world's largestproducer. Gold mining contributed 0.3%  to government revenue in 2001. Assistance continues to be
provided to "marginal" mines within approved guidelines.
139
37. The taxation system on the profits earned by gold mining companies is still based on two
different formulae: one is for companies that opted to remain outside the dual-tax system when the
Government introduced the Secondary Tax on Companies (STC) and the other is for companies
subject to the STC.  Gold mining companies that are exempt from the STC and that have profitability
ratios lower than 32.38% are liable to a tax rate of 43.125%, which is lower than the combination ofthe standard rate of corporate tax of 35% and the STC rate of 12.5%.
140  A minimum profitability ratio
over which profits of gold mining companies become taxable has been set at 5% since 1992.
                                                     
137 Oxford Analytica (2002).
138 Much of the decline can be attributed to natural attrition as the industry has moved from unskilled
labour to skilled labour.
139 See WTO (1998).
140 For a comprehensive description of thes e two formulae and their implications see  WTO (1998).WT/TPR/S/114/ZAF Trade Policy Review
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(b) Diamonds
38. The slowdown of the world economy has resulted  in a weakened diamond market since the
end of 2000. Yet, the diamond mining industry has become one of the most important foreign
exchange earners of the South African economy. Diamonds also contribute 0.2%  to government
revenue through direct taxes.
39. There have been no major changes in the organization of the diamond subsector since the last
Review . A recent important event in the diamond industry was the termination of the listing of De
Beers in the Johannesburg Stock Exchange (JSE) on 1 June 2001 (South Africa's longest listed
company, i.e. listed since August 1893). De Beers, a world leader in the marketing of diamonds, now
operates as a private company held by DB Investments (DBI).141 The Diamond Board, established
under the 1986 Diamond Act, regulates the possession, buying, selling, processing, import, and exportof rough and polished diamonds. There is an export tax of 15% on unpolished diamonds. Export
prohibitions apply to crude or unprocessed tiger's-eye, with the exception of samples of a mass not
exceeding 114 grams and tiger's-eye of a mass not exceeding one kilogram, which foreign guests of
local mineral clubs are allowed to carry out of South Africa. South Africa participates in the Kimberly
Process, which was established to protect the legitimate diamond industry.
(c) Platinum-group metals
40. Platinum group metals (PGM) produced in South Africa comprise platinum, palladium,
rhodium, and ruthenium. In 2001, South Africa produced 50%  of the world supply of PGM, up from
about 47% in 1996. Exports of PGM have increased because of higher production; they became the
country's largest export in 2001. Local sales have also increased because of the rise in the
manufacturing of auto catalysts and jewellery.
41. To improve their performance, South Africa's largest PGM producers have continued the
restructuring of their shareholdings, mergers of companies, and cost-reduction measures. However,
the level of employment increased from 93,223 persons in 1996 to 99,571  persons in 2001.
(d) Coal and energy
42. South Africa's is the world's second largest coal exporting country, and the sixth largest
producer. Coal exports represented 12% of total e xports in 2001, and the coal industry employed an
average of 50,771 workers, down from 60,500 in 1996. Coal provides about 70% of South Africa's
primary energy, followed by crude oil (around 17%).
142 South Africa produces one of the world's
cheapest electricity supplies and generates over half of all electricity in Africa. The energy subsector
contributes around 15% to South Africa's GDP143, and employs about 250,000 people.144 Eskom145,
the state-owned company, supplies electricity to househ olds at higher average prices than to industries
                                                     
141 DBI has three shareholders: a company representing the Oppenheimer family interests (45%), Anglo
American plc (45%), and Debswana (10%), which is a joint venture partnership between De Beers and theBotswana Government.
142 Around 95% of crude oil is imported" (Energy Research Institute of the University of Cape Town,
2001).
143 This figure included energy-related taxes and levies (Government of South Africa, 1998).
144 This figure included energy-related taxes and levies (Government of South Africa, 1998).
145 Eskom produces over 90% of all electricity (the rest is generated by industries for their own use).SACU-South Africa WT/TPR/S/114/ZAF
Page A4-273
and mining companies; prices of electricity supplied by about 400 local distributors, including local
authorities, vary widely.146
43. Eskom still operates as a monopoly, and is in the process of being restructured. It will be
corporatized, with generation, transmission, distribution, and non-core activities each forming a
separate entity; competition among generation companies is to be established, and private
participation is to be introduced (Chapter III(4)(ii)).
44. South Africa's energy policy is being transformed on the basis of the 1998 White Paper on
Energy Policy, which establishes five main objectives: increasing access to affordable energy prices
(the aim is to give access to some 40% of South Africans who are still without electricity 147);
improving governance (including the restructuring of Eskom and Mossgas148, and establishing
independent regional electricity distributors); stimulating economic development (by removingdistortions and promoting competition); managing energy-related environmental impacts (by
establishing broad national targets for the redu ction of harmful energy-related emissions); and
securing supply through diversity (e.g. the SADC energy cooperation strategy).
(4) M
ANUFACTURING
(i) Main features
45. The major branches of the manufacturing sector include: the motor industry; textiles, clothing
and related products; food processing and beverages; mineral-based industries; machinery and
equipment; and pulp and paper.  Manufacturing sales by some of the main subsectors during 1997-02
are described in Table IV.4. The manufacturing sector has grown relatively slowly during the period
under review: on average output increased by 1.8% per year.149 Growth has been particularly slow in
clothing, food and footwear; resource-intensive sectors such as metal products; and capital goods and
equipment. Subsectors that have performed better than the average are: autos, chemicals, radio,television and communications equipment.
150 Much of the growth is from increased exports:
manufacturing now contributes about half of tota l South African exports. This growing export
orientation of South African manufacturing is present in all industries.
Table IV.4
Manufacturing sales, 1997-02(R million)
1997 1998 1999 2000 2001 2002a
Food and food products 52,649 54,940 57,202 59,693 67,448 75,257
Motor vehicles 35,948 35,373 42,731 53,843 54,735 74,187
Paper and paper products 17,508 18,281 20,415 23,306 25,147 27,340
Textiles and apparel 21,201 20,402 20,756 20,721 21,911 23,451
Electrical machinery 11,778 11,579 11,899 13,221 13,974 15,342
Total manufacturing production 368,283 373,569 397,609 448,106 502,499 656,374
a January to November.
Source: Information provided by the South African authorities.
                                                     
146 WTO (1998).
147 WTO (1998).
148 Mossgas, a parastatal, processes offshore natural gas into liquid fuels, equivalent to about 5% of the
total produced in South Africa.
149 DTI (2002).
150 The expansion of the auto assembly industry  has favoured local industries, such as leather, glass,
rubber, and platinum group metals, in its supply side chain. The Motor Industry Development Plan (MIDP), inoperation since 1996, has been key in this transformation.WT/TPR/S/114/ZAF Trade Policy Review
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46. Small, medium, and micro enterprises (SMMEs) currently contribute 35% to GDP, and 54%
to formal private-sector employment. Within manufacturing their share of employment has risen from
39% in 1988 to about 45% in 2001, which may be related in part to outsourcing trends. However, the
survival rate of small businesses remains low by international standards, and few are effectively
integrated into the mainstream operations.151
(ii) Policy developments
47. Tariff protection for manufacturing has diminished since the last Review. The simple average
MFN tariff rates went down from 15.6% in 1997 to 11.8% in 2002. However, some manufactures
such as articles of apparel, and textile and clothing products, are still subject to an average tariff of
30% or above. Formula duties apply to preserved tomatoes; specific excise duties are collected on,
inter alia , prepared foodstuffs, beverages and spirits, and products of the chemical or allied industries;
and a d valorem  excise duties on certain manufactured products, such as tractors, motor vehicles, and
chassis, range up to 20% (Main Report, Chapter III(3)(ii), and Chart IV.1 above).
48. The authorities recognize that despite the structural reforms undertaken since 1994 to open up
the economy and enhance competitiveness, a coherent industrial policy framework has not been
clearly articulated.152 Special programmes have been introduced for manufacturing industries
undergoing severe structural changes. The programmes have contributed to the rise of some
industries, for example the auto industry (section (iii)(a) below), but also to the decline of others, such
as the textile and clothing industry (section (iii)(b) below), which is the most heavily tariff protected
subsector (Main Report, Chapter III(3)(ii)). In general, this piece meal approach to manufacturing has
not had the desired impact on the growth rate, employment creation, small business development,
income distribution and equity.  In addition, investment in manufacturing has grown more slowly than
in most other sectors, and job losses have tended to accelerate.153 BEE throughout the economy,
mainly in manufacturing, has also not developed at the desired rate.
49. Some of the few manufacturing industries that are experiencing robust investment growth are:
plastic products, leather, motor vehicles and parts, paper and paper products, and basic chemicals.
According to the authorities, the decline in investment in manufacturing was stopped in 2001.
50. The Government's response to these problems is contained in two basic documents that were
made public in early 2002: the Microeconomic Reform Strategy (MRS), and the Integrated
Manufacturing Strategy (IMS). The Government's objective is to substantially achieve the structural
changes needed by 2014. The MRS seeks to posi tively affect key performance areas: growth,
competitiveness, employment, SMMEs, BEE, an d the geographic spread of economic activity.
Amongst the industries that are considered to have considerable potential for increased output,exports, and employment creation, and that will receive focused attention from the State are: minerals
and metals; textiles and clothing, automobiles, agri-processing, and chemicals . Also, the MRS aims to
liberalize, and improve efficiency in three critical input subsectors: transport, energy, and
telecommunications, which are still dominated by parastatals.
51. As a complement of the MRS, the IMS contains specific actions for achieving structural
changes in areas such as: market access (increased access to developed markets, and new trade links
with key developing countries); regional producti on (basically within SADC); value added (fostering
                                                     
151 DTI (2002).
152 DTI (2002).
153 Growth is less rapid in the labour-intensive than the non-labour-intensive subsectors. Labour
demand has increased, however, in a few subsectors:  leather and leather products, plastic products, wood andrelated products, some chemicals, and TV, radio and communications equipment (DTI, 2002).SACU-South Africa WT/TPR/S/114/ZAF
Page A4-275
exports of higher value-added goods); equity and economic participation (increasing the economic
participation of historically disadvantaged individuals); knowledge-intensity and services integration
(developing and integrating information and communication technologies into manufacturing); and
integrated value matrices (improving the interconnectivity of enterprises).
52. Since the last Review of South Africa, manufacturing support schemes have been replaced
with the "Six Pack" of incentives announced by the DTI in September 2000.154 The Six Pack consists
of:
− Small Medium Enterprise Development Programme (SMEDP), which offers
manufacturing155, and tourism enterprises with "significant expansions of their
operations", tax-free cash grants for two years, based on the cost of the investment in
land, buildings, machinery, equipment, and vehicles.156 A maximum of R 3.05 million
per year for enterprises with an investment in qualifying assets of up toR 100 million.
− Skills Support Programme (SSP) offers a cash grant to cover 50% of the training
costs of enterprises under the SMEDP, in or der to encourage them to introduce new
and advanced skills to their workforce. The maximum assistance an enterprise may
receive is 30% of its actual costs.
− Critical Infrastructure Facility (CIF) supplements the existing public or private sector
infrastructure, by funding a top-up grant between 10% and 30% of actual costs.
− Industrial Development Zones (IDZ) consist of two zones of operation: customs
secured area (CSA), and industries and servi ces corridor (ISC). A CSA is a delimited
area with entrance and exit points controlled by Customs personnel. Each CSA has adedicated customs office providing inspection and clearance services, and one-stop
administrative centre to facilitate the approval and permit processes. CSA-based
enterprises are eligible for: duty-free import of production-related raw materials and
inputs; zero rate on VAT for supplies procured from South Africa; and right to sell
into South Africa upon payment of normal imported duties on finished goods. ISCs
are industrial and office park environments adjacent to CSAs, occupied by service
providers to CSA enterprises. The Government will first designate areas suitable forIDZs. Prospective IDZ companies will then have to apply for permits to develop and
operate an IDZ.
157
− Foreign Investment Grant (FIG) is open to foreign investors (i.e. at least 50% foreign
shareholding) located outside SACU and/or  SADC, and participating in the SMEDP.
                                                     
154 DTI (2002).
155 The SMEDP targets: food products and beverages;  textiles, clothing and leather goods; wood and
products of wood and cork, except furniture; articles of straw and plaiting materials;  paper and paper products;
publishing, printing and reproduction of recorded media; coal, refined petroleum products and nuclear fuel;chemicals and chemical products, including cosmetics and hair products; rubber and  plastic products, non-
metallic mineral products (e.g. glass, and ceramics); basic metals (e.g. iron and steel, and machinery andequipment); electrical machinery and apparatus; radio, television and communication equipment; apparatus of
medical precision and optical instruments; watches and clocks; transport equipment (e.g. motor vehicles, ships,
and aircrafts); furniture; jewellery, musical instruments, sports goods, etc.; and recycling (DTI, 2002).
156 Enterprises with high labour costs may receive an extension of the cash grant for a third year.
157 The first IDZ is the Coega project. In Gauteng, an IDZ is under review for Johannesburg
International Airport  (linked to Durban for the transhipment of cargo).WT/TPR/S/114/ZAF Trade Policy Review
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It offers up to 15% of the value of new machinery and equipment (a maximum of
R 3 million per entity), based on accepted relocation costs.
− Strategic Investment Programme (SIP) offers a tax allowance of up to 100% (a
maximum allowance of R 600 million per project) on the cost of buildings, plant andmachinery, for strategic investments of at least R 50 million in manufacturing of food
products (excluding tobacco and tobacco-related products), and consultancy incomputer hardware and software, data processing and data base activities.
(iii) Selected product categories
(a) Motor industry
53. The Motor Industry Development Programme (MIDP), introduced in September 1995, has led
to rapid structural changes in the automotive industry.
158 Under the MIDP, import duty on completely
built-up light vehicles was reduced from 61% on 1 January 1996 to 40% on 1 January 2002, and from
46% to 30% on original equipment components over the same period. Total domestic production of
light vehicles increased by 11.7% during 1997-01 (from 348,234 units in 1997 to an estimated
392,991 in 2001), while total exports of light vehicles shot up by 484% (from 18,458 units in 1997 to
107,828 in 2001).159
54. The MIDP was to be terminated in 2000 for medium and heavy commercial vehicles, and in
2002 for motor cars and light commercial vehicles.160 However, the DTI, together with manufacturers,
instead amended the MIDP, effective 17 July 2000, by, inter alia , extending its duration until 2007,
with further gradual reduction in import duties on light motor vehicles (from 47% on 1 January 2000
to 30% by 1 January 2007), and original equipment components (from 35% to 25% over the same
period); and introducing a productive asset allowance (PAA) to manufacturers that have invested in
productive assets for the assembly of light vehicles, or in the manufacture of automotive components.Besides the MIDP, manufacturers in the motor industry are eligible for other incentives (section (ii)
above, and Chapter III((4)(i)).
55. In December 2002, the Minister of Trade and Industry formally announced the intention to
extend the MIDP for light commercial vehicles from 2008 to 2012, with further gradual reductions in
import duties on light motor vehicles from 40% on 1 January 2002 to 25% by 31 January 2012, andoriginal equipment component from 30% to 20% over the same period. A review of the MIDP for
medium and heavy vehicles is expected to be completed by June 2003.
56. Import controls on vulcanized rubber thread and cord, plates and strip, have been eliminated,
but remain on new pneumatic tyres (Chapter III(2)(ii) ). Export controls continue to apply to motor
vehicles (Chapter III(3)(ii)). Tariffs on tyres rang e up to 43%, with an average of 9.4% (down from
11.6% in 1997). Motor vehicle duty rates range up to 35%, with an average rate of 12.5%. A
progressive excise duty applies to locally produced and imported motor vehicles and their
components: the rate is calculated on the basis of a formula and increases with the value for ad
valorem  excise duty purposes, to a maximum of 20% (Main Report, Chapter III(3)(ii)).
                                                     
158 For a comprehensive description of the MIDP, see WTO (1998).
159 TISA (2002).
160 See WTO (1998).SACU-South Africa WT/TPR/S/114/ZAF
Page A4-277
(b) Textiles, clothing, and related products
57. The textiles, clothing and related products industry contributed 0.9% to GDP in 2001,
compared with 1.4% in 1996; and employed about 204,814  people, down from 260,000. Exports of
clothing amounted to R 1.9 billion  in 2001  (up from R 626 million in 1996). The Wool Board and the
Cotton Board were abolished in 1998, and wool and cotton marketing in South Africa are now free
from government intervention. In addition to incentive schemes available to all manufacturers, textilesand clothing producers are eligible for the Finance for Textiles, Clothing, Leather and Footwear
Industries (Table AIII.1), and the Duty Credit Certificate Scheme.
161 The World Player Scheme has
been abolished.
58. According to a sectoral restructuring plan, introduced in 1995162, most tariff rebate
concessions will be phased out by the end of 2002; all tariffs applying to the products will become ad
valorem ; and the final phased-down tariff rates (the base minimum rates of duty to be completed by
2002) will be 40% on all clothing products, 30% on household textiles, 22% on all textile fabrics,
15% on yarn, and 7.5% on some synthetic fibres (polyester) and polypropylene fibres. However,
import tariff rates currently range up to 60% for some textile products (worn clothing and other worn
articles (HS 6309 items)).
(5) S ERVICES
59. Services accounted for more than half of South Africa's GDP in 2001. Administrative services
continues to be the largest subsector, followed by financial services, and transport services. Two main
state-owned companies operate in the sector: Telkom (telecommunications), and Transnet (transport).
South Africa is a net importer of services (Chapt er I(3)). Under the General Agreement on Trade in
Services, South Africa scheduled commitments in several service categories163, and adopted the
Reference Paper for basic telecommunications on pro-competitive and transparency practices. TableAIV.1 provides details on South Africa's commitments under the GATS.
60. South Africa took part in the WTO GATS negotiations on financial services, and accepted the
GATS Fifth Protocol, on 27 January 1999 (section (ii) below).
164
(i) Telecommunications
61. South Africa continues to be the leading African country in terms of its telecommunications
market, network, and traffic. The mobile networ ks have grown rapidly (Table IV.5). In 2002, there
were 13 million mobile phone subscribers and 5 million fixed lines, indicating that there are more
than twice as many mobile phones as fixed phones: in 2000, 62.6% of telephone subscribers were
cellular subscribers, that is 19.02 mobile subscribers per 100 inhabitants, compared with only 2.35 in
1996. However, a major problem is the large disproportion between areas: teledensity (numbers ofphones per 100 inhabitants) ranges from below 1 to 64. The national teledensity is 12%. Moreover,
some half million fixed lines were disconnected in 2000 because of fraud or non-payment, causing a
                                                     
161 The Duty Credit Certificate Scheme was scheduled to be phased out as from March 2000. Yarns and
fabrics manufactured in the BLNS countries are regarded  as locally manufactured inputs. In consequence, only
exports outside the SACU area qualify for the scheme. For a comprehensive description of the Duty Credit
Certificate Scheme, see WTO (1998).
162 The plan was introduced after an investigation by a Textile and Clothing Panel, comprising
representatives of business/industry, labour and Government. See WTO (1998).
163 WTO (1998).
164 WTO document WT/LET/288 of 18 February 1999.WT/TPR/S/114/ZAF Trade Policy Review
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decline in the fixed density, for which South Africa ranks fifth highest in Africa.165 This decline casts
a shadow over the future expansion of the Internet in South Africa.
62. In recent years, the subsector has undergone moves towards privatization and liberalization.
However, Telkom, South Africa's telecommunications parastatal, has not yet been fully privatized.
The privatization process in telecommunications began in May 1997, when 30% of Telkom, the fixed-
line operator and until then wholly owned by th e Government, was sold for US$1.26 billion to the
Thintana consortium, which includes the U.S. company SBC, and Telekom Malaysia. The second
stage of the privatization, an initial public offering of shares in Telkom, was postponed to the fiscal
year 2002/03, because of adverse market conditions and delays in finalizing the policy framework.166
With the exception of the mobile market, where three joint-ventures between South African andforeign companies operate
167, Telkom still enjoys monopoly powers over basic public switched
telecommunication services.168 Licensees and private value-added network services (VANS) suppliers
are required to use Telkom infrastructure. Tariffs charged by the cellular companies must be approved
by the Independent Communications Au thority of South Africa (ICASA).
63. A second network operator (SNO) should have been operational by May 2002, when the
monopoly licence of Telkom ended, but the process has been delayed. Equity interests from foreigninvestors in the SNO will be limited to 51%. BEE Groups will hold 19%, and the remaining 30% will
be allocated to the parastatals Transnet and Eskom. The SNO will have to provide 80% national
geographic coverage within ten years. Also, a multimedia licence and a carrier of carriers
(international gateway) has been issued to Sentech, a state-owned company.
64. Under the 1996 Telecommunications Act, as amended in 2001, the Minister of
Communications formulates policies in the subsector, including postal services. The 1996 Act
regulates licences, mobile cellular telecommunications services, and private telecommunicationsnetworks.
Table IV.5
Selected telecommunication indicators, 1996-00 (year beginning 1 April)
1996 1997 1998 1999 2000
Main telephone lines ('000) 4,259 4,645 5,075 5,493 4,962
Main lines per 100 inhabitants 10.49 11.27 12.05 12.76 11.36
Percentage of digital main lines 74.00 82.00 92.50 99.00 99.60
Public payphones ('000)a94.9 127.3 153.5 173.1 178.1
Cellular mobile subscribers ('000) 953 1,574 2,600 5,269 8,308
Cellular subscribers per 100 inhabitants 2.35 3.82 6.17 12.24 19.02
Full-time telecommunication staff ('000) 57.5 56.9 61.2 49.1 43.8
Telecommunication revenue as % of GDP 3.37 4.01 4.31 4.94 5.39
Telecommunication investment as % of GFCFb3.70 6.32 9.24 6.91 6.60
Televisions per 100 inhabitants 12.89 13.10 12.94 12.77 12.70
Number of personal computers ('000) 1,430 1,800 2,100 2,400 2,700
Estimated Internet users ('000) 618 800 1,266 1,820 2,400
a Coin phones, card phones and table-mounted renter's payphone.
b Gross fixed capital formation (GFCF).
Source: ITU (2001), African Telecommunication Indicators , Geneva.
                                                     
165 ITU (2001).
166 ITU (2001).
167 A third mobile licence was issued to Cell C in November 2001. The other two date from 1994:
Mobile Telephone Networks, and Vodacom. See WTO (1998), Trade Policy Review of  SACU, Geneva.
168 During the period, Telkom has the "primary" role in universal access/service provision. National
long-distance services, local access telecommunications services and public pay-telephone services,international services, as well as switching networks will exclusively be provided by Telkom.SACU-South Africa WT/TPR/S/114/ZAF
Page A4-279
65. Under the ICASA Act (Act No. 13 of 2000), the Independent Communications Authority of
South Africa (ICASA), replaced the Independent Broadcasting Authority (IBA)  and the South African
Telecommunications Regulatory Authority (SATRA), in 2000 as the new telecommunications
regulatory body.  The move has been criticized as more institutional than real, since decisions taken
by ICASA are often challenged, particularly by Telkom, which has delayed implementation of
ICASA's rulings.169 ICASA grants licences to VANS providers, sets standards for telephone
equipment, and approves telecommunication tariffs, subject to regulations approved by the Minister
for Communications. ICASA, in cooperation with the Competition Commission, also addresses issues
such as unfair competition, and cross-subsidization.
(ii) Financial services
66. Financial services in South Africa are characterized by extensive interlocking shareholding
relationships between the major banks and the larg e insurance companies. The securities markets are
well developed. Total assets held by the financial subsector represented the equivalent of about 370%
of GDP in 1999, with banks accounting for roughly 27% of total assets.170 Non-residents' participation
in the securities and stock markets has increased sharply.
67. South Africa made further commitments during the 1997 WTO financial services
negotiations.171 For all financial services (excluding insurance services), South Africa made
commitments only with respect to commercial presence on:  national treatment, under which branches
of banks not incorporated in South Africa must maintain a minimum balance of R 1 million on the
deposit accounts of natural persons; and market access, under which companies need to be
incorporated as public companies in South Africa, and registered with the Registrar of Banks in order
to carry on business in the country. With respect to insurance services, commitments on market access
and national treatment were made for consumption abroad and commercial presence. The acquisitionof shares or any other interest (by a resident or non-resident) in a registered insurer resulting in the
holding of 25% or more of the value of all shares , requires the written approval of the Registrar of
Insurance.
68. South Africa still maintains MFN exemptions to allow the other members of the Common
Monetary Area (Lesotho, Namibia, and Swaziland) to enjoy preferential access (exemption fromexchange controls) to its capital and money markets, and transfers of funds.
172
(a) Banking services
69. From 1996 to 2001, the banking structure went from: 40 to 41 registered (equity) banks; 4 to
2 registered mutual banks173; 6 to 15 local branches of foreign banks; and 58 to 55 representative
offices of foreign banks. In 2001, the four largest banks (ABSA, FirstRand, Nedcor, and Stanbic) had69.5% of total bank assets and deposits (down from 78% in 1996).
174 Overseas exposures of South
                                                     
169 Oxford Analytica (2002).
170 IMF (2001a).
171 WTO documents GATS/SC/78/Suppl.3 of 26 February, 1998, and S/L/67 of 15 February 1999.
172 WTO document GATS/EL/78, 15 April 1994.
173 Mutual banks are community-based, and are owned by their depositors.
174 In May 2002, FirstRand bought the Saambou bank, which was the seventh largest bank. An
important element of the deal was a solvency guarantee from the SARB. In 2002, Nedcor bo ught BOE, South
Africa's sixth largest bank, for R 7.3 billion. The deal will create South Africa's largest banking group, and willlead to a greater concentration of the banking sector. With this take-over, the four largest banks will have around85-90% of the assets and deposits. South Africa is among the countries with relatively high bank concentration;it had a Herfindhal-Hirschman Index (HHI) of 0.15 for 1999. As a rule of thumb, an HHI of 0.18 or higher isWT/TPR/S/114/ZAF Trade Policy Review
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African Banks have grown steadily since 1994. Th ere are no state-owned commercial banks, but
several development financial institutions exist, the largest being the Development Bank of Southern
Africa.
70. The banking system is regulated by the Bank Supervision Department (BSD) of the South
African Reserve Bank (SARB). The 1990 Banks Act pr ovides the legislative framework for banking,
and has been regularly amended, inter alia ,  as a way to foster greater compliance with the Basel Core
Principles (BCP), and strengthen the supervision of the subsector. Some of the main changes in
legislation made since the last Review are: Unit Tr usts Control Act (Act No. 12 of 1998) to deregulate
the method of calculation of charges; Financial Markets Control Act (Act No.13 of 1998) and Stock
Exchange Control Act (Act No. 14 of 1998) to fu rther regulate the management of investments;
Mutual Banks Act (Act No. 54 of 1999) to achieve effective supervision by the Registrar of Banks;Banks Amendment  Act (Act No. 36 of 2000) to allow banks greater flexibility in the utilization of
their liquid assets; Financial Institutions (Protection of Funds) Act (Act No. 28 of 2001) to consolidate
the laws relating to the investment, safe custody, and administration of funds and trust property by
financial institutions; and the 2001 Anti-Money Laundering Act to further combat money laundering
activities.
71. Any person, whether South African or foreigner, may control a bank. There are three
alternatives for conducting banking operations in South Africa (all of which require prior approval of
the Registrar of Banks, who heads up the BSD): a separate banking company, a branch of an
international bank or banking group, and a representative office of an international bank. The criteria
for the registration of a bank has not changed since the last Review, and are the same for domestic or
foreign investors. However, foreign banks are required to include additional information with their
application, such as: foreign bank holding company resolution approving proposed formation of thebank; letter of "comfort and understanding" from the foreign bank holding company, and letter of no
objection from the foreign bank's home regulatory authority.
175
(b) Insurance
72. In 2001, there were 63 long-term insurance companies (such as life, home, industrial, and
funeral businesses) in South Africa, and 89 short-term (including fire, motor, and personal accident),up from 52 and 62, respectively, in 1997. Contractual savings institutions, which comprise pension
funds and life insurance companies, mobilize resources in excess of 120% of the GDP in 2000.
176 Life
insurance companies are particularly large by international standards, and are properly funded and
capitalized.177 Life companies are linked to group pension plans, but there is also a large subsector of
company-based pension plans. Short-term insurance business is less developed.
73. The Financial Services Board (FSB), an independent institution established under the 1990
Financial Services Board Act, regulates and supervises the financial markets, as well as non-bank
institutions, which must register with it. Registration criteria have not changed since the last Review.
Any person, whether South African or foreigner, may control an insurance company in South Africa.
However, foreign insurers cannot open branches in South Africa, but may register subsidiaries.
                                                                                                                                                                    
perceived as an indication of very high concentration. In a pure monopoly, the value of the HHI is one. IMF
(2001a).
175 DTI (2000).
176 IMF (2001).
177 South African insurers receive some 80% of all premiums paid in Africa in terms of life insurance
(IMF, 2001).SACU-South Africa WT/TPR/S/114/ZAF
Page A4-281
(iii) Transport
74. In 2001, transport, storage, and related services employed about 48,000 persons, and
contributed about 10% to South Africa's GDP. Transport infrastructure in South Africa, while
advanced for mainstream business, is still very unequally developed, resulting in very poor service for
rural areas. The Government's main policy goals are to improve infrastructure and encourage private
investment, particularly in minibus-taxi, bus, and rail transport178; to pursue greater safety in the
transport system179; and to redefine the current public transport subsidies schemes.180 Through its
infrastructure projects, the "spatial development initiatives" (SDIs)181, the Government aims to
develop the economic potential of specific regions in South Africa, by attracting private investment.182
75. The National Department of Transport (DoT) formulates and implements transport policies: it
sets guidelines, as well as service and safety standards, and promotes transport planning. It has movedcertain elements of its operational activities to four newly established commercial agencies: the South
African National Roads Agency (SANRAL), the South African Maritime Safety Authority (SAMSA),
the Cross-border Road Transport Agency (CBRTA), and the South African Civil Aviation Authority
(SACAA).
183 Transnet Limited, a wholly government-owned public company184, is a holding
parastatal made up of eight businesses and related services: Spoornet (rail transport); Metrorail(commuter rail services); Petronet (liquid petroleum transport); Portnet Port Authority (port
infrastructure and marine related services), and Portnet Port Operations (terminal and cargo
operations); Propnet (property services); Transtel (telecommunications network operator)
185;
Transwerk (engineering); and South African Airway s. Restructuring of the Transnet Group includes
finding strategic equity partners for some units, and consolidating the rail-passenger entities.
(a) Maritime transport
76. South Africa's seven commercial ports (Saldanha Bay, Cape Town, Mossel Bay, Port
Elizabeth, East London, Durban, and Richards Bay), form by far the largest and best equipped
network in Africa. A major port is being developed at Coega. These ports serve as conduits for trade
between South Africa and its partners in the SACU  and in the SADC, but also as hubs for traffic to
and from the rest of the world. The South African Marine Corporation (Safmarine), and Unicorn and
Griffin Shipping are the largest shipping lines. Maritime transport is playing an increasing role ininternational trade (158.9 million tonnes of South Africa's exports and imports in 2001, up from
126.4 million tonnes in 1995).
77. Portnet holds the largest share of maritime transport services in South Africa: it controls the
seven largest ports. Until recently, Portnet has been a natural and legally structured monopoly and its
own regulator. The landowner and operations func tions are currently being split between a Ports
Authority and SA Port Operations, with an Independe nt Ports regulator. In future, SA Port Operations
                                                     
178 Government of South Africa (1999).
179 Government of South Africa (2001).
180 Currently about 35% of the commuting public is subsidized, and the major allocations are for bus
and rail subsidies; the Department of Transport envisages designing a subsidy scheme to be driven by socio-economic factors for targeted commuters (National Department of Transport, 2002b).
181 The SDIs are Lubombo, West Coast, Fish River, Maputo Development Corridor, Wild Coast,
Platinum, Phalaborwa, and Richards Bay.
182 EIU (2001), p. 26.
183 Government of South Africa (2002).
184 The entire issued share capital is controlled by the Minister for Public Enterprises on behalf of the
South African Government.
185 Transtel is currently bidding for a share of South Africa’s second network operator.WT/TPR/S/114/ZAF Trade Policy Review
Page A4-282
will have to compete with other operators for concession of port operations.  South Africa's maritime
safety and pollution administration and legislation are controlled by SAMSA on behalf of the DoT, in
accordance with the SAMSA Act (Act No. 5 of 1998). Among SAMSA's main responsibilities are:
introduction and maintenance of international standards set by the International Maritime
Organization, certification of seafarers, promotion of safety at sea, and pollution prevention. Local
and foreign-owned vessels on international trade-routes to and from South Africa may carry SouthAfrican coastal cargoes and purchase fuel free of duties or other charges. South Africa is a member of
the International Maritime Organization, and a signatory to several international maritime agreements,
including the 1974 International Convention for the Safety of Life at Sea and its 1978 Protocol, the
1966 International Convention on Load Lines, the 1976 Convention on the International Maritime
Satellite Organization, and the 1969 International Convention on Tonnage Measurement of Ships.South Africa has also concluded bilateral shipping agreements with, inter alia , the Netherlands,
Madagascar, Malaysia, and Mozambique.
(b) Air transport
78. In 2001, South Africa's airports network included nine state airports, and 195 provincial,
municipal, and private airports. South African Airways (SAA) has a fleet of 55 Boeing aircraft,serving both domestic and international routes. They are currently being replaced by an Airbus fleet.
Due to the rapid growth of both tourism and business travel, there has been a steep increase in airline
traffic since 1994 at the three major international airports (Johannesburg, Durban, and Cape Town).
The South African air transport market was deregulated in 1991; the parastatal SAA has since
operated in the domestic market in competition with private airlines such as British Airways/Comair,
and Nationwide, and has established a partnership with SA Express and SA Airlink. South Africa’s
major airports have been commercialized, but not yet privatized.
79. The Airport Company of South Africa (ACSA) is  responsible for the planning, construction,
and operations of the state airports, including the three international airports.
186 Domestic air service
licences are issued by the Air Service Licensing C ouncil (ASLC). As a general principle, 75% of the
domestic services of eligible applicants must be owned by South Africans, and they must use South
African aircraft to provide air services.187 Licensing fees range up to R5,000. On 1 October 1998, the
SACAA was established as a stand-alone authority charged with promoting, regulating, and enforcing
civil aviation safety and security, as provided fo r by the SACAA Act (Act No. 40 of 1998). The DoT
negotiates bilateral air transport agreements, and controls and manages South Africa's obligations in
terms of ratified aviation conventions with international organizations. South Africa is a signatory to
several international air transport agreements, including the 1944 Convention on International Civil
Aviation, the 1944 International Air Transport Agreement, and the 1929 Convention for the
Unification of Certain Rules relating to International Carriage by Air.
(c) Land transport
80. Land transport includes passenger, and merchandise transport services by road and rail;  there
are around 7,000 km of national roads (750,000 km in total) and about 34,000 km of rail track. In
                                                     
186 The Airport Company is undertaking major capital developments totalling R 1.7 billion at the
Johannesburg, Cape Town, and Durban international airports. Half of this sum is allocated to Johannesburg
International Airport, the busiest in Africa. Construction of a new domestic terminal at a cost of R 350 million is
expected to be completed by 2003. Cape Town Internatio nal Airport is expected to spend about R 2.8 billion on
developments over the next five years (Government of South Africa, 2002).
187 There are, however certain exceptions. For example,  foreign aircraft may be allowed to provide air
services for a limited period of time.SACU-South Africa WT/TPR/S/114/ZAF
Page A4-283
addition, South Africa has a pipeline network of 3,000 km, which is managed, operated, and
maintained by Petronet.
81. Overall policy in road transport is the responsibility of the DoT. The planning, construction,
and maintenance of roads and bridges, other than those under SANRAL or local governments, are the
responsibility of the provincial governments. Streets are the responsibility of metropolitan, district or
local communities. The bulk of the road and street system is financed by national and local taxes, butSANRAL operates 600 km of state toll roads, and has concessioned 1,300 km to private consortia
which toll those roads. While legislative and executive powers for public transport are a provincial
competency, the DoT is responsible for policy formulation, monitoring, and strategic implementation.
The DoT is currently working on redesigning the subsidies scheme for public transport, so as to
redress the current practice of paying subsidies to buses and commuter rail
188, to the exclusion of the
taxi industry, and of subsidizing only about 35% of the commuting public. The National Land
Transport Transition Act (Act No. 22 of 2000)189, provides for a new system of 'permissions' to
replace permits for taxi and bus transport, and is meant to lay the foundation for a fully integrated,
long-term, user-orientated land transport system. Both DTI and DoT are engaged in a major initiative
to recapitalize the taxi fleet.
82. Spoornet has 80% of Africa's rail infrastructure.190 It is the largest railroad and heavy haulier
in Southern Africa. Spoornet is trying to identify the most efficient mode of internal operations.191 The
DoT has embarked on a comprehensive recapitalization programme in order to improve rail safety
and revive rail transport as a viable public alternative. An amount of R 545 million is provided for in
the 2002/2003 budget for capital expenditure to refurbish rolling stock and upgrade train stations.192
83. South Africa is an important transit point for merchandise going to and from the southern
African region, in particular the landlocked coun tries. The Governments of Mozambique and South
Africa are implementing the Maputo Development Corridor, which includes transport and
communication projects in the 550 km corridor from Johannesburg to Maputo (Mozambique). The
SADC Protocol on Transport, Communications and Meteorology provides a framework for regional
integration in the transport subsector, while cross-border transport within SACU is undertaken in
terms of the SACU Memorandum of Understandin g, which facilitates transport between member
countries through, inter alia , the use of the single permit system. On road transportation, South Africa
still maintains MFN exemptions for the SACU countries (except Namibia), Malawi, Zimbabwe, and
other sub-Saharan African countries. Transport rights are granted on a preferential basis through a
permit, which regulates the transport of passengers and goods.193
(iv) Tourism
84. South Africa’s main tourist attractions include: the Great Limpopo Trans-frontier Park (part
of which constitutes the Kruger National Park); the Cape Peninsula and the fauna of Table Mountain;
the Garden Route (200 km of beaches, forests, and mountains); Kwazulu-Natal parks and mountains,
including the Drakensberg range; the Sterkfontein Caves (the home of the ancestors of humankind);
Robben Island; Blyde River Canon; Cango Caves Western Cape; and the Wine Route.
                                                     
188 In the Department's budget for 2002/2003, the allocation for buses and rail amounts to R 37 million
(National Department of Transport, 2002b).
189 This has been amended by the National Land Transport Transition Amendment Act (Act No. 31 of
2001).
190 Metrorail and the South African Rail Commuter Corporation also operate in the country.
191 Government of South Africa (2002).
192 National Department of Transport (2002a).
193 WTO document GATS/EL/78, 15 April 1994.WT/TPR/S/114/ZAF Trade Policy Review
Page A4-284
85. South Africa was the world's 24th tourist destination in terms of international arrivals in 2001
(25th in 1995). Although South Africa has increased its share in the international tourism market since
the early 1990s, tourism accounted for just over 2%  of GDP in 2001, employing almost one million
people, up from 550,000 in 1995. In 2001, South Africa's reception capacity was 1,566,930 rooms,
compared with 46,435 rooms in 1996. Annual arrivals have doubled since 1994 to around 6 million,
an annual average increase of 6.4% during 1995-00. BLNS countries accounted for 51.2% of totalarrivals in South Africa in 2000, compared with 49.9% in 1995. The growth in tourism since the end
of apartheid has been far less than the authorities and the industry hoped for, mainly because of
concerns about personal safety, due to both crime and health problems.
194 According to the World
Tourism Organization, the persisting lack of aggr essive promotion of tourism investment and of
tourism investment incentives, constitutes another major problem for the industry in South Africa.195
86. The Industrial Development Corporation (IDC) currently provides medium-term finance in
the form of loans, suspensive sales, equity and quasi-equity for the development and expansion of the
tourism industry (Table AIII.1). Also, the Department of Trade and Industry (DTI) provides the
subsector with the Small and Medium Enterprise Development Programme
(SMEDP)(Chapter III(4)(ii)). According to the au thorities, other than exchange control and
immigration regulations, there are no barriers to foreign entry.
87. In 2000, two Amendment Acts to the 1993 Tourism Act were passed: Act No. 8 introduces
further provisions concerning the organization of  the South African Tourism Board (SATOUR), and
Act No. 70 emphasizes the training and registration of tourist guides, and a code of conduct and ethics
for tourist guides; regulates the procedures for lo dging complaints; and criminalizes certain conduct.
88. In May 2000, South Africa launched the Tourism Growth Strategy. In addition to the
international marketing of South Africa as a top world tourism destination, this strategy is aimed at,inter alia , increasing tourism arrivals in South Africa; broadening the geographical spread of arrivals;
increasing the length of stay; and increasing invest ment, both foreign and domestic, in the tourism
industry. The strategy focuses on Africa, the United States, Europe (particularly, United Kingdom,
Germany, France, the Netherlands, and Italy), a nd Asia (China, Japan, India). The Department of
Environmental Affairs and Tourism (DEAT), in partnership with the private sector, has alsoformulated a three-year strategy aimed at transforming the industry by, inter alia , ensuring that all
government departments support BEE in the touris m industry. In July 2002, Lesotho and South Africa
signed a grant agreement with the World Bank for the Maloti-Drakensberg Transfrontier
Conservation and Development Project.
196 The two countries are expected, inter alia , to establish a
sustainable eco-tourism destination in their border region.
                                                     
194 More new hotels have been built in the last three years than in the previous 20, but almost half of
their beds remain unoccupied ( The Economist , 16 December 2000).
195 World Tourism Organization (2001).
196 The agreement will bring US$15.2 million to the project from the World Bank’s Global
Environment Facility (GEF); Lesotho will take US$7.3 million, and South Africa US$7.9 million.SACU-South Africa WT/TPR/S/114/ZAF
Page A4-285
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Competition Commission of South Africa (2001), Annual Report , Pretoria.
Competition Tribunal (2001), Annual Report, Pretoria.
Coughlin, P. and S. Undenge (2001), Study of the Textile and Garment Industries:  Malawi , paper
commissioned by SADC, April, Gaborone.
Department of Environmental Affairs and Tourism (2000), "Draft Discussion Document for the
Fisheries, Management Plan to Improve the Process of Allocating Fishing Rights", August, Pretoria.
Department of Mineral and En ergy of South Africa (2001), Annual Report 2000-01, Pretoria.
DTI (2000), The Investor's Handbook , Pretoria.
DTI (2001a), Draft Working Paper Concerning the Establishment of the CITA, Pretoria.DTI (2001b), South Africa's Global Economic Strategy, Pretoria.
DTI (2002), The Contribution of the Integr ated Manufacturing Strategy, Pretoria.
EIU (2001), Country Profile: South Africa , London.
EIU (2002), Country Report: South Africa,  March, London.
EMIA (2002), EMIA 2002 Guidelines, Pretoria.
Energy Research Institute of the University of Cape Town (2001), "Preliminary Energy Outlook for
South Africa", Cape Town.
European Commission (1999) , The Trade, Development and Cooperation Agreement, Brussels .
Government of South Africa (1998), Pretoria.Government of South Africa (1999), Moving South Africa Strategy , Pretoria.
Government of South Africa (2001), The Road to Safety Strategy 2001-2005 , Pretoria.
Government of South Africa (2002), South Africa Yearbook 2001/02 , Pretoria.
IMF (2001a), Financial System Stability Assessment , 23 February, Washington D.C.
IMF (2001b), "Report for the 2001 Article IV Consul tation with South Africa", Washington D.C.
IMF (2002a), Determinants of FDI in South Africa , June, Washington D.C.
IMF (2002b), "Report for the 2002 Article IV Consul tation with South Africa", Washington D.C.
IMF Staff Country Report No.00/42, "Trade Liberalization and Productivity in South Africa",
Washington D.C.WT/TPR/S/114/ZAF Trade Policy Review
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ITU (2001), African Telecommunication Indicators, Geneva.
Lewis, J.D. (2001): Policies to Promote Growth and Employment in South Africa , World Bank,
Washington D.C.
Ministry of Agriculture and Land Affairs (1998), Agricultural Policy in South Africa , Pretoria.
Ministry of Public Enterprises of South Africa (2000), Policy Framework for an Accelerated Agenda
for the Restructuring of State-Owned Enterprises , August, Pretoria.
National Department of Agriculture of South Africa (2001), Trends in the Agricultural Sector ,
Pretoria.
National Department of Transport (2002a), Strategic Plan 2002/2003, Pretoria.
National Department of Transport (2002b), Business Plan 2002/03, Pretoria.
Oxford Analytica (2002) "Concern over minerals bi ll threat to FDI", 19 July. [Online]. Available at:
http://www.oxweb.com.
Rankin, N. (2001), " The Export Behaviour of South African Manufacturing Firms ", Centre for the
Study of African Economies, Oxford.
South African Bureau of Standards (2001), Annual Report, 2000-01 , Pretoria.
Subramanian, A. and Jonsson, G.; "Dynamic Gains From Trade: Evidence from South Africa", IMF
Staff Papers, IMF, Washington D. C. 2001.
TISA (2002), The South African Automotive Industry , Pretoria.
Tsikata, Y.  "Liberalisation and Trade Performance in South Africa",  Informal Discussion Papers on
Aspects of the South Africa Economy, No.13, the World Bank, 1999.
UK Institute of Development Studies, and the Botswana Institute for Development Policy Analysis
(1998), Study to assess the economic impact of  the proposed EU-SAFTA on BLNS countries .
UNAIDS (2001), Joint United Nations Programme on HIV/AIDS , Geneva.
U.S. Department of State (2002), 2001 South Africa Report on Economic Policy and Trade Practices ,
February, Washington D.C.
USTR (2002), South Africa Report on Economic and Trade Policies , Washington D.C.
World Bank (2000), Country Assistance Strategy for South Africa , Washington D.C.
World Bank (2002), South Africa Data Profile , Washington D.C.
World Tourism Organization (2001), Market Trends , Madrid.
WTO (1998) Trade Policy Review: Southern African Customs Union, Geneva.SACU-South Africa WT/TPR/S/114/ZAF
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WTO (2000), Annual Report, Geneva.
WTO (2002), Annual Report, Geneva.APPENDIX TABLESSACU-South Africa WT/TPR/S/114/ZAF
Page A4-291
Table AI.1
Balance of payments, 1990-01
(US$ million)
1990 1995 1996 1997 1998 1999 2000 2001
Overall balance 355.0 907.0 -1,272.0 4,595.0 920.0 4,215.0 400.0 2,158.0
Current account balance 2,134.0 -2,205.0 -1,880.0 -2,273.0 -2,157.0 -640.0 -575.0 -166.0
 Balance on goods, services and income 2,455.0 -1,560.0 -1,127.0 -1,549.0 -1,414.0 287.0 351.0 573.0
 Balance on goods and services 6,726.0 1,315.0 1,990.0 1,655.0 1,742.0 3,440.0 3,492.0 4,419.0
Trade balance 7,056.0 2,667.0 2,695.0 2,324.0 2,056.0 4,073.0 4,316.0 4,966.0
 Exports 24,336.0 30,071.0 30,263.0 31,171.0 29,264.0 28,627.0 31,636.0 30,642.0
 Imports -17,279.0 -27,404.0 -27,568.0 -28,848.0 -27,208.0 -24,554.0 -27,320.0 -25,677.0
Balance on services -331.0 -1,351.0 -705.0 -668.0 -314.0 -633.0 -824.0 -546.0
 Credit 3,406.0 4,618.0 5,028.0 5,334.0 5,281.0 5,074.0 4,895.0 4,662.0
 Debit -3,737.0 -5,969.0 -5,733.0 -6,002.0 -5,595.0 -5,707.0 -5,719.0 -5,208.0
 Transportation (net) .. -1,226.0 -1,340.0 -1,389.0 -1,205.0 .. .. ..
 Travel (net) .. 277.0 821.0 808.0 809.0 .. .. ..
 Other services (net) .. -402.0 -185.0 -87.0 83.0 .. .. ..
Balance on income -4,272.0 -2,875.0 -3,117.0 -3,204.0 -3,156.0 -3,153.0 -3,140.0 -3,846.0
 Credit 657.0 1,136.0 1,077.0 1,298.0 1,307.0 1,568.0 2,261.0 2,168.0
 Debit -4,929.0 -4,011.0 -4,194.0 -4,502.0 -4,463.0 -4,721.0 -5,401.0 -6,014.0
Current transfers -321.0 -645.0 -753.0 -724.0 -744.0 -927.0 -927.0 -739.0
 Credit 298.0 196.0 54.0 138.0 60.0 66.0 106.0 126.0
 Debit -619.0 -841.0 -807.0 -862.0 -804.0 -993.0 -1,033.0 -865.0
Balance on capital account -56.0 -40.0 -47.0 -193.0 -56.0 -62.0 -52.0 -32.0
 Credit 27.0 22.0 25.0 29.0 24.0 20.0 19.0 15.0
 Debit -84.0 -62.0 -72.0 -222.0 -80.0 -82.0 -71.0 -47.0
Balance on financial account -1,619.0 4,003.0 3,018.0 8,131.0 4,852.0 5,305.0 99.0 501.0
 Direct investment abroad -28.0 -2,494.0 -1,048.0 -2,324.0 -1,634.0 -1,584.0 -277.0 3,686.0
 Direct investment In South Africa -76.0 1,248.0 816.0 3,811.0 550.0 1,503.0 969.0 7,162.0
 Portfolio investment 6.0 2,490.0 2,446.0 6,687.0 4,294.0 8,686.0 -1,865.0 -8,302.0
 Financial derivatives assets and
liabilities.. .. .. 53.0 97.0 -122.0 -142.0 ..
 Other investment -1,521.0 2,760.0 804.0 -96.0 1,543.0 -3,179.0 1,413.0 -2,046.0
Net errors and omissions -104.0 -852.0 -2,363.0 -1,070.0 -1,719.0 -389.0 928.0 1,855.0
.. Not available.
Source: IMF, Balance of Payments Statististics and International Financial Statistics, various issues.WT/TPR/S/114/ZAF Trade Policy Review
Page A4-292
Table AI.2
Merchandise imports, 1997-00a
(US$ million and per cent)
Description 1997 1998 1999 2000
Total imports (US$ million) 30,879.0 26,624.1 24,092.5 26,606.7
(Per cent)
Total 100.0 100.0 100.0 100.0
Total primary products 20.9 17.5 19.7 23.3
Agriculture 7.3 6.8 6.9 6.2
 Food 5.5 5.2 5.4 4.7
 Agricultural raw material 1.7 1.5 1.5 1.5
Mining 13.6 10.7 12.7 17.0
 Ores and other minerals 1.4 1.4 1.4 1.7
2852 Alumina(aluminium oxide) 0.9 0.9 0.9 1.2
 Non-ferrous metals 0.8 0.9 1.2 1.0
 Fuels 11.4 8.4 10.1 14.4
3330 Crude petroleum 10.5 6.8 8.7 13.1
Manufactures 62.6 69.2 72.1 68.7
Iron and steel 1.1 1.3 1.3 1.2
Chemicals 10.7 11.0 12.6 11.8
5429 Medicaments, nes 1.0 1.3 1.6 1.5
Other semi-manufactures 7.1 7.2 8.5 7.9
6672 Diamonds.excl.industrial 1.1 1.0 1.7 1.7
Machinery and transport equipment 33.7 39.0 38.3 37.0
 Power generating machines 1.2 1.4 1.2 1.3
 Other non-electrical machinery 13.0 12.9 11.6 10.3
7284 Mach.appl.spcl indus nes 0.8 0.8 0.7 0.6
Agricultural machinery and tractors 0.8 0.7 0.5 0.5
 Office machines & telecommunication equipment 10.3 14.6 13.5 12.6
7641 Line telephone etc.equip 1.3 2.6 2.4 2.2
7599 Parts,data proc. etc.mch 1.2 1.0 1.6 1.2
7764 Electronic microcircuits 0.7 0.7 0.7 0.8
7649 Parts,telecommun. equipt 0.9 1.0 0.9 0.7
7523 Digtl proc,storage units 0.5 0.8 0.8 0.7
7526 Input or output units 0.8 0.8 0.7 0.6
7643 TV,radio transmittrs etc 1.8 3.9 2.3 2.7
7522 Digital computers 0.4 0.5 0.5 0.6
 Other electrical machines 3.4 3.8 3.9 3.6
7725 Switch.apparatus,<1000v 0.6 0.6 0.7 0.6
 Automotive products 3.0 3.6 4.1 5.5
7812 Pass.transport vehicles 1.1 1.8 2.0 3.1
7843 Other parts,motor vehicl 1.0 1.0 1.2 1.2
 Other transport equipment 2.8 2.7 4.0 3.6
7924 Aircrft etc.ULW >15000kg 0.4 0.9 1.7 1.4
Textiles 2.2 2.2 2.3 2.1
Clothing 0.6 0.7 0.8 0.8
Other consumer goods 7.1 7.7 8.3 7.8
8987 Other recorded media 0.7 0.7 0.8 0.6
8722 Othr.medical instruments 0.5 0.5 0.6 0.6
Other 16.5 13.4 8.2 8.1
9310 Special trans not classd 16.5 13.4 8.1 8.1
Gold 0.0 0.0 0.0 0.0
a 1999 and 2000 data refer to South Africa only, while 1992 to 1998 refer to SACU.
Source: UNSD, Comtrade database based on SITC Rev.3 data.SACU-South Africa WT/TPR/S/114/ZAF
Page A4-293
Table AI.3
Commodity exports, 1997-00a
(US$ million and per cent)
Description 1997 1998 1999 2000
Total exports 22,485.4 19,586.1 23,188.6 26,075.3
(Per cent)
Total 100.0 100.0 100.0 100.0
Total primary products 30.7 33.7 45.1 33.5
Agriculture 15.3 16.6 14.0 12.5
 Food 10.8 12.1 10.2 8.6
1121 Wine of fresh grapes 0.8 0.9 0.9 0.9
 Agricultural raw material 4.5 4.5 3.8 4.0
2513 Chem.wood pulp,dissolvng 1.2 1.2 1.0 1.4
Mining 15.4 17.1 31.1 21.0
 Ores and other minerals 6.2 7.3 6.5 6.1
2878 Ore etc.molybdn.niob.etc 0.5 1.5 1.7 1.3
2816 Iron ore agglomerates 1.7 1.9 1.5 1.2
2892 Prec.metal waste,scrap 0.5 0.5 0.6 0.8
 Non-ferrous metals 1.9 2.2 14.7 4.6
6841 Alum.,alum.alloy,unwrght 0.0 0.0 3.2 2.8
 Fuels 7.3 7.7 9.8 10.2
3212 Oth.coal,not agglomeratd 6.7 7.0 5.8 5.0
3344 Fuel oils, nes 0.0 0.0 1.3 1.7
3343 Gas oils 0.0 0.0 0.7 1.3
Manufactures 57.3 53.1 54.1 53.7
Iron and steel 6.7 7.1 10.0 10.6
6715 Other ferro-alloys 0.0 0.0 4.0 3.8
6753 Flat,hot-rolled s.steel 1.3 1.3 1.2 1.5
6732 Flat,hot-rolld,prod.iron 1.0 1.0 0.8 1.0
6714 Ferro-manganese 0.0 0.0 0.7 0.8
Chemicals 9.2 9.0 8.1 7.9
5225 Zinc,chrom.iron etc.oxid 1.4 0.7 0.7 0.8
Other semi-manufactures 20.7 13.6 13.0 12.6
6672 Diamonds.excl.industrial 14.7 6.2 6.7 6.7
Machinery and transport equipment 14.8 17.0 17.5 17.5
 Power generating machines 0.3 0.2 0.2 0.2
 Other non-electrical machinery 4.8 5.3 4.9 5.6
7436 Machs.filter gas,liquids 0.9 1.5 2.0 2.8
Agricultural machinery and tractors 0.1 0.1 0.1 0.1
 Office machines & telecommunication equipment 1.4 1.8 1.8 1.6
 Other electrical machines 1.3 1.5 1.3 1.3
 Automotive products 3.7 4.8 6.7 6.5
7812 Pass.transport vehicles 1.1 1.4 3.8 4.0
7843 Other parts,motor vehicl 1.3 2.0 1.9 1.6
 Other transport equipment 3.3 3.5 2.6 2.4
Textiles 1.2 1.2 1.0 0.9
Clothing 0.8 0.8 0.8 0.8
Other consumer goods 4.0 4.4 3.8 3.4
8211 Convertible seats,parts 1.4 1.7 1.4 1.1
Other 12.0 13.2 0.8 12.8
9310 Special trans not classd 12.0 13.1 0.0 12.7
Gold 0.1 0.1 0.1 0.1
a 1999 and 2000 data refer to South Africa only, while 1992 to 1998 refer to SACU.
b 1994 figure includes re-exports.
Source: UNSD, Comtrade database based on SITC Rev.3 data.WT/TPR/S/114/ZAF Trade Policy Review
Page A4-294
Table AI.4
Imports by origin, 1997-00a
(US$ million and per cent)
Description 1997 1998 1999 2000
Total imports 30,879.0 26,624.1 24,092.5 26,606.7
(Per cent)
World 100.0 100.0 100.0 100.0
America 14.8 15.4 16.8 15.3
United States 11.2 12.5 13.8 12.0
Canada 1.1 1.0 0.8 0.9
Other America 2.5 2.0 2.2 2.4
Brazil 1.0 0.8 0.9 1.1
Europe 39.6 44.2 46.2 43.4
EU(15) 37.0 41.0 42.6 39.8
Germany 12.2 13.5 14.7 13.2
United Kingdom 9.2 9.1 9.5 8.5
France 3.2 4.0 4.0 4.3
Italy 3.4 3.7 3.7 3.4
Netherlands 2.3 2.3 2.3 1.9
Sweden 1.3 1.6 1.5 1.6
Belgium b1.6 1.6 1.7 1.5
Finland 0.6 1.0 1.2 1.4
Ireland 0.9 1.3 1.5 1.3
Spain 0.9 1.5 1.1 1.1
EFTA 2.1 2.5 2.8 2.6
Switzerland 2.0 2.4 2.6 2.5
Eastern Europe 0.4 0.5 0.6 0.8
Former USSR 0.2 0.2 0.3 0.4
Other Europe 0.2 0.3 0.3 0.3
Asia 19.4 21.4 31.0 35.9
Middle East 0.9 1.0 8.9 13.8
Saudi Arabia 0.1 0.1 4.1 7.6
Iran Islamic Rep. 0.1 0.0 2.8 4.4
East Asia 17.2 19.1 21.0 20.9
Japan 6.7 7.3 7.8 8.0
China 2.2 2.8 3.4 3.7
Chinese Taipei 2.5 2.2 2.5 2.3
Korea, Rep. of 1.4 1.7 1.9 1.9
Malaysia 0.9 1.2 1.2 1.1
South Asia 1.2 1.2 1.2 1.2
Oceania 2.4 2.4 2.4 2.8
Australia 2.3 2.2 2.2 2.5
Africa 2.0 1.7 2.9 2.2
Sub-saharian Africa 1.9 1.6 2.8 2.2
Other Africa 0.1 0.1 0.1 0.1
Other 21.7 14.9 0.7 0.3
a 1999 and 2000 data refer to South Africa only, while 1992 to 1998 refer to SACU.
b Figures before 1999 include Luxembourg exports.
Source:  UNSD, Comtrade database based on SITC Rev.3 data.SACU-South Africa WT/TPR/S/114/ZAF
Page A4-295
Table AI.5
Exports by destination, 1997-00a
(US$ million and per cent)
Description 1997 1998 1999 2000
Total exports 22,485.4 19,586.1 23,188.6 26,075.3
(Per cent)
World 100.0 100.0 100.0 100.0
America 13.3 16.2 15.0 12.3
United States 9.6 12.3 12.0 9.2
Canada 0.7 1.1 0.9 0.8
Other America 3.0 2.8 2.0 2.2
Europe 28.8 36.8 40.6 35.4
EU(15) 26.2 33.8 38.0 33.1
United Kingdom 6.2 7.8 10.9 8.8
Germany 6.3 8.5 9.5 7.3
Netherlands 3.5 4.4 4.4 3.9
Belgium c2.4 2.9 3.8 3.7
Italy 2.5 3.2 3.1 3.2
France 1.7 2.3 2.4 2.2
Spain 1.4 2.1 2.2 1.9
EFTA 1.4 1.7 1.5 1.3
Switzerland 1.2 1.5 1.3 1.2
Eastern Europe 0.6 0.7 0.6 0.5
Former USSR 0.3 0.3 0.4 0.3
Other Europe 0.5 0.6 0.5 0.5
Asia 21.2 19.6 25.1 20.2
Middle East 2.9 2.9 3.8 3.6
Israel 1.0 1.1 2.1 2.0
East Asia 17.1 15.2 19.2 14.9
Japan 6.7 7.6 7.9 5.2
Korea, Rep. of 2.0 1.4 3.0 2.3
Chinese Taipei 2.7 2.0 2.5 2.1
China 0.8 0.8 1.2 1.3
Hong Kong 1.8 1.4 1.7 1.3
South Asia 1.3 1.4 2.0 1.7
India 0.9 1.0 1.7 1.4
Oceania 1.8 1.8 2.0 2.0
Australia 1.6 1.7 1.9 1.8
Africa 16.3 16.8 15.7 15.3
Sub-Saharan Africa 15.9 16.3 15.3 14.9
Mozambique 1.9 2.0 2.8 2.7
Zimbabwe 4.6 4.5 3.6 2.6
Zambia 2.0 1.9 1.7 2.5
Other Africa 0.4 0.5 0.5 0.4
Other 18.6 8.8 1.5 14.8
Areas n.e.s 0.0 0.0 0.0 14.8
a 1999 and 2000 data refer to South Africa only, while 1992 to 1998 refer to SACU.
b 1994 figure includes re-exports.
c Figures before 1999 include Luxembourg exports.
Source: UNSD, Comtrade database based on SITC Rev.3 data.WT/TPR/S/114/ZAF Trade Policy Review
Page A4-296
Table AIII.1
Incentive schemes, January 2003
Name of scheme Objective Access criteria Description
Agro-industries
Development FinanceDevelopment and expansion of
the agricultural, food,
beverage, and marine sectors.An economically viable business plan.
Minimum financing requirement of R 1 million.Medium term finance in the form of
loans, suspensive sales, equity and quasi-
equity to: - establish permanent infrastructure inthe agricultural sector and aquaculture; - establish new or expand existingundertakings in the food and beveragesector.  Interest rates are competitive andrisk related and based on the prime bankoverdraft rate.
Bridging FinanceSchemeAddressing the short term
financing needs ofentrepreneurs who havesecured firm contracts (exceptconstruction contracts) withGovernment and/or the privatesectorEntrepreneurs who have been awarded tenders
by gov.  Entrepreneurs who have securedcontracts to supply services/products toestablished big, blue chip companies.Entrepreneurs with an annual turnover greaterthan R 1 million.Minimum financing requirements of R 500 000.Short term loans (maximum 18 months).
Interest rates are competitive and riskrelated and based on the prime bankoverdraft rate.
Capacity BuildingSupport for RetailFinance
Intermediaries (RFIs)To provide capacity building
support to new RFIs to initiatea loan portfolio and to assist
existing RFIs to expand their
loan portfolios.To qualify, an RFI must:
 - be legally constituted; - have clearly defined SMME target markets;
 - have sound accounting and financial systems;
 - have sound internal organizational guidelines,policies and procedures; - have capacity to carry out current andproposed projects; - have clear and achievable short and mediumterm objectives.Support will be structured around the
capacity needs to the RFIs.  The grantsrange from R 10 000 to R 500 000.
Competitiveness Fund The fund is a cost-sharing
grant scheme run by the DTI,using funds sourced from theWorld Bank.  It providesfinancial support for improvingthe competitiveness of
private-sector South African
firms.Available to South African private firms of all
sizes.Funds allocated on a first-come, first-servedbasis.  Firms should submit a realistic plan forthe development of its business activities.The Fund will support the introduction of
technical and marketing expertise tofirms.  The Scheme will insist on a 50%contribution by the firm itself and grantswill paid on a reimbursement basis.
CriticalInfrastructureFacility (CIF)Critical Infrastructure
Programme.Available to local authorities or the private
sector or in partnership between the two parties.Supplements the infrastructure provided
by existing public or private sectorproviders by funding a top-up grantbetween 10% and 30% of actual costs.
DANIDA Business toBusiness ProgrammeTo develop and strengthen
business opportunities andcreate jobs for eligibleentrepreneurs from previouslydisadvantaged communities.Support will be given to commercially viable
businesses for development, based on formationof business partnership between South Africaand Danish companies.  The long-term objectiveis for private partners to continue with thepartnership when the supports is discontinued.The support will cover expenses
connected with the transfer ofmanagement, business skills, andtechnology from Danish to South Africancompanies and provide access tofinancing for the SA company.  A 100%Khula Guarantee to a financial institution
will be considered for loans aimed
exclusively at procurement of shares,purchasing of machinery and capitalequipment essential for the business tosucceed.
Duty CreditCertificate Schemefor exporters oftextiles and clothing(DCCS)To improve export awareness,
productivity and training toachieve internationalcompetitiveness.To exporters of certain prescribed textile and
clothing products.A temporary kick-start measure to
enhance export competitiveness byoffering duty credit certificates toqualifying exporters.
EmergingEntrepreneur SchemeTo increase access to finance
for SMMEs through banks.Accessible to independently owned SMMEs,
with assets of R 2 million before financing.SMMEs must meet the bank's no-lending
criteria.To enable an entrepreneur to access
funding from his/her bank for theestablishment, expansion or acquisition
of a new or existing business.  The
maximum indemnity is 60-70% and tiremaximum facility is R75 000.
Table AIII.1 (cont'd)SACU-South Africa WT/TPR/S/114/ZAF
Page A4-297
Name of scheme Objective Access criteria Description
Empowerment
FinanceAssistance to emerging
industrialists/entrepreneurs toacquire a stake in formalbusiness.Emerging industrialists interested in small to
medium sized ventures who comply with thefollowing criteria: - the business must be acquired as a goingconcern; - the business must have economic merit (i.e. beprofit-making and cash generative); - the entrepreneur should play a meaningful rolein the management of the concern;
 - the minimum deal size is R 5 million and the
maximum R 100 million; - a minimum cash contribution of 10% of thepurchase price is required from the entrepreneur.Medium term finance in the form of
loans, equity and quasi-equity for: - management buy-ins, managementbuy-outs or leverage buy-outs; - strategic equity partnerships.
EntrepreneurialMining andBeneficiation FinanceDevelopment of small, and
medium-sized mining andbeneficiation activities and
jewellery manufacturing.An economically viable business plan.
Minimum financing requirement R1 million.Medium term finance in the form of
loans, suspensive sales, equity  andquasi-equity to:
 - establish or expand junior mining
houses; - acquire mining assets by HDPs; - undertake mining related activitiessuch as contract mining; - establish or expand jewellerymanufacturing activities.Interest rates are competitive and riskrelated and based on prime bankoverdraft rate.
Equity Fund To fund joint ventures,
expansion re-capitalization ofcompany and buying out of
existing shareholders.Accessible to SMMEs with a net asset value of
not less than R500 000.  Applicants must be ableto demonstrate that they are viable in the
medium to long term, and that the investors can
anticipate an adequate rate of return.Provides for SMMEs that need to expand
their activities, enter into joint ventures,re-capitalise the company, or buy out the
existing shareholders.
Export Finance To assist the promotion of
exports of capital goods andservices by providingcompetitive U.S. dollar andRand financing to prospectiveforeign buyers of equipment.All industrialists/exporters. Credit facilities for capital goods and
services exported from SA (enablingexporters to offer competitive terms toforeign purchasers).Payment terms at market related interestsrates for facilities denominated in U.S.dollars or rand.
Finance for theExpansion of aManufacturing SectorDevelopment and the
expansion of themanufacturing sector byproviding finance for the
creation of new or additional
capacity.An economically viable business plan.
A meaningful financial contribution of at least33% by the promoters (10% to 20% for HDPs).Minimum financing requirement of R1 million.Medium term finance in the form of
loans, suspensive sales, equity and quasi-equity or creation of new or additionalproduction capacity.
Interest rates are competitive and risk
related and are based on the prime bankoverdraft rate.
Finance for Textiles,Clothing, Leather andFootwear IndustriesDevelopment and expansion of
the sectors by providingfinance for: - the creation of new oradditional production capacity; - setting up distributionchannels; - working capital, pre-and postshipment trade finance forexports (see Export Finance)An economically viable business plan.
A meaningful financial contribution of at least35-50% (depending on the nature of thebusiness) by the promoters (10% to 20% forHDPs).Minimum financing requirement of R 500 000.Medium term finance in the form of
loans, suspense sales, equity and quasi-equity.Interest rates are competitive and riskrelated and based on the prime bankoverdraft rate.
Foreign InvestmentGrantTo promote foreign investment Will be available to foreign investors with a
shareholding of at least 50%.A foreign investment grant to overseas
companies investing in new machineryand equipment to establish projects inSouth Africa.
Khula Start To promote greater access to
micro-credit in rural areasAccessible to existing NGO/CBO in rural areas
involved in SMME activities such as businesstraining and advice.A group-lending scheme for the lower
end of the micro enterprise market.  Ittargets historically disadvantagedcommunities, particularly women in ruralareas and informal sectors.  Khula Startwill be initiated through existing NGOsor CBOs who have to apply to becomeMicro-Credit Outlets (MCOs).
Import Finance Provision of medium to long
dated import credit facilities tolocal importers of capitalgoods.All industrialists/importers. Credit and guarantee facilities available
in U.S. dollars and other foreigncurrencies to local industrialists for themedium to long term financing ofimported capital goods and services.
IndustrialDevelopment ZonesProgramme (IDZ)To encourage international
competitiveness of theSA-based manufacturingsector.Available to all industries (zones have to be
designated first).Quality infrastructure.
Expedited customs procedures.Duty-free operating environments.
Table AIII.1 (cont'd)WT/TPR/S/114/ZAF Trade Policy Review
Page A4-298
Name of scheme Objective Access criteria Description
Motor Industry
DevelopmentProgramme (MIDP)To increase competitiveness
and productivity.Available to motor vehicle assemblers and
component manufacturers and exporters.MIDP enables local vehicle and
component manufacturers to increaseproduction runs and encouragesrationalization of the number of modelsmanufactured by way of exports andcomplementing imports of vehicles andcomponents.
Rebate Provisions Promotion of manufacturing
and exportation of goods.Available to all manufacturing industries. Provisions exist for rebated or drawback
of certain duties applicable to importedgoods, raw material and componentsused in manufacturing, processing or forexport.
Sector PartnershipFund (SPF)To promote collaborative
projects that will enhance theproductivity andcompetitiveness of the
manufacturing and agro-
processing industries.Available to any partnership of five or more
organizations within the South Africanmanufacturing and agro-processing industry thatputs forward a qualifying project.The fund is available to groups of five or
more firms in preparation and executionof marketing and production relatedprojects with the aim of improving
competitiveness and productivity.  The
Fund will cover 65% of costs of projectsup to a maximum of R 1.5 million.
Seed Loans for RetailFinanceIntermediaries (RFIs)To provide initial capital to
new organizations to initiatetheir portfolio, and to fundoperational expenses over apredetermined period.To qualify and RFI must:
 - be legally constituted; - have clearly defined SMME target markets; - have sound accounting and financial systems; - have sound internal organizational guidelines,policies and procedures; - have capacity to carry out current andproposed projects; - have clear and achievable short and mediumterm objectives;
 - have matching funds of at least 15% of
envisaged operating expenses.The amount ranges between R 50 000
and R 20 million.  Seed loans areconverted to grants once mutually agreedupon performance criteria are met.
Skills SupportProgramme (SSP)To encourage greater
investment in training, improveindustrial training systems,create opportunities forintroduction of new advancedskills.  Facilitates employmentpromotion.Available countrywide to local and foreign firms
for training grants under the Skills Support.A cash grant for skills development to
enable investors and large expansions toprepare their work force.The following ceiling will apply:  50% oftraining costs will be subsidized, with aceiling of 30% of actual costs.
Small and MediumEnterpriseDevelopmentProgramme (SMEDP)To create wealth, generate
employment, developentrepreneurship, promoteempowerment, utilise local raw
material, ensure sustainability
of projects receiving incentivesin the long run, reduceinvestment lost for small andmedium investors.Available countrywide to local and foreign firms
investing not more than R 100 million in land,buildings, plant and equipment in new projectsor expansion of existing projects.
Legal entities as well as sole proprietors and
partnerships (excluding trusts) engaged inqualifying manufacturing, high valueagricultural projects and agro-processing, aquaculture, bio-technology, tourism information andcommunication technology investments,recycling, culture industry, and business servicemay apply.The incentive package provides for:
 - an investment grant for two years onapproved qualifying assets calculated asfollows:
first R5m investment – 10% pa;
next R10m investment – 6% pa;next R15m investment – 4% pa;next R20m investment – 3% pa;next R25m investment – 2% pa;next R25m investment – 1% pa;an additional investment payable in thethird year based on the ratio of humanresource remuneration expressed in termsof manufacturing cost must be aminimum of 30%;The incentives are tax-exempted in termsof Act 10 of Income Tax Act No.58 of
1982 as amended.
Standard Credit
Guarantee SchemeTo increase access to finance
for SMMEs through banks.Accessible to SMMEs that are independently
owned, with assets less than R 2 million beforefinancing.  SMMEs must meet the banks' normallending criteria.To enable an entrepreneur to access
funding from his/her bankers for theestablishment, expansion or acquisitionof a new or existing business.  Themaximum indemnity is 60-70%.  Themaximum facility is R 600,000.
Strategic InvestmentSupport forProgramme (SIP)Support for strategic
investments in manufacturing.Available countrywide. Tax allowance of up to 100% (a
maximum of R 600 million per project)of the cost of buildings, plant andmachinery, for investments of at leastR50 million in manufacturing of food
products (excluding tobacco and related
products), and consultancy in computerhardware, software and data basedprocessing.
Table AIII.1 (cont'd)SACU-South Africa WT/TPR/S/114/ZAF
Page A4-299
Name of scheme Objective Access criteria Description
Support Programme
for IndustrialInnovation (SPII)Support for SA based products
or process developments thatrepresent a significanttechnological advance andhave a commercial advantageover existing products, andthus have a potential to besuccessfully marketed.All private sector entrepreneurs in industry
submitting a meritorious project proposal.Applicants are assessed on the following criteria: - management's ability for product or processdevelopment; - financial ability for successfully complete theproposed development and commercializationthereof; - ability to manufacture and market products or
implement a process.Support of innovative products or
process development in the form of agrant of 50% of actual costs incurred indevelopment activities.  The MatchingScheme supports product/processdevelopment up to a maximum grantamount of R 1.5 million per project.  ThePartnership Scheme support large-scaleinnovation and product/process
development by providing a conditional
grant with no upper limit that isrepayable in the form of a levy on sales ifthe project is successfullycommercialized.
Techno-IndustryDevelopment FinanceDevelopment and expansion of
technology intensive business
in the IT, telecommunication,
electronic and electricalindustries.An economically viable business plan.
Minimum financing requirement of R 1 million.Equity, equity-related and loan finance
for:
 - techno business that are expanding;
 - new techno ventures with strong localor foreign technology partners andproven technology; - takeovers, buy-ins and managementbuy-outs.Interest rates are competitive and riskrelated and based on the prime bankoverdraft rate.
Technology andHuman Resources forIndustry Programe(THRIP)Enhancing the competitiveness
of South African industrythrough the development ofappropriate skilled people and
of technology and encouraging
long-term strategicpartnerships between industry,research and educationalinstitutions and government.Research groups in natural sciences,
engineering, and technology within educationalinstitutions can participate in collaboration withany private company or consortium of
companies.Contributions provided by industry and
Government to finance the researchefforts of the academic partners providedthat research projects involve training of
students.  R 1 for every R 2 from
industry, and if certain criteria are met R1 for every R 1 from industry could begranted.
Technology TransferGuarantee FundTo provide loan guarantees for
SMMEs for the sole purpose ofacquiring manufacturingtechnology, from South Africaor international/foreigncountry.Available to SMMEs with an approval certificate
from CSIR for a technology evaluation on theproposed technology to be transferred beforeapplying to a financial institution for a TTGFguarantee.The TTGF will guarantee 90% of the
technology transfer transaction expensesto a maximum of R 1 million.  Themaximum term for guarantee will be fiveyears.  Khula will levy the standardindemnity fee of 3% per annum on thefacility as guaranteed, payable annuallyin advance.
Tourism DevelopmentFinanceDevelopment and expansion of
the tourism industry byproviding finance forcommercial projects in themedium to large sector of thetourism industry.An economically viable business plan.
Minimum financing requirement of R 1 million.Medium term finance in the form of
loans, suspensive sales, equity and quasi-equity for the creation or upgrading andrenovation of tourist facilities includinghotels, conference and conventioncentres.Interest rates are competitive, riskrelated, and are based on the prime bankoverdraft rate.
Wholesale Finance Wholesale funding to
intermediaries for on-lendingto individual entrepreneurs.Franchises and other applicants must have:
 - a good record of business development; - a strong financial position; - developed/acquired a training and mentorship
programme;
 - require financing for on-lending to at least tenprojects (at least 60% HDPs); - minimum financing requirement of R1 million.Medium term loan (maximum 6 years).
Interest rates are competitive and riskrelated and based on the prime bankoverdraft rate.
Work Place Challenge To improve the country's
competitiveness andemployment creation.Available to South African firms of all sizes. To enhance cooperation between workers
and management to boost the country'scompetitiveness and employmentcreation by improving industrialperformance and productivity.
Source: Department of Trade and Industry online info rmation. Available at:  http://www.dti.gov.za/
review.asp?iSDivID=143&iEvent_ID=172WT/TPR/S/114/ZAF Trade Policy Review
Page A4-300
Table AIV.1
Summary of South Africa's sector-specific commitments under the GATS
Modes of supply
Sector or subsector Cross-border
supplyConsumption
abroadCommercial
presencePresence of
natural persons
Market access / National treatment
1. BUSINESS SERVICES
A. Professional Services
(a) Legal services (advisory services in foreign and international
law only)
(CPC 861 +)U/U U/U NL/NL Uex/Uex
Legal services (domestic law only)
(CPC 861 +)U/U U/U OP/NL Uex/Uex
(b) Auditing
(CPC 862 +)U/U U/U NL//OP Uex/Uex
(c) Taxation services (excluding legal services)
(CPC 863)NL/NL NL/NL NL/NL Uex/Uex
(d) Architectural services
(CPC 8671)OP/NL OP/NL NL/NL Uex/Uex
(e) Engineering services
(CPC 8672)NL/NL NL/NL NL/NL Uex/Uex
(f) Integrated engineering services
(CPC 8673)NL/NL NL/NL NL/NL Uex/Uex
(g) (i) urban planning services
(CPC 8674)NL/NL NL/NL  NL/NL Uex/Uex
(ii) landscape architectural services
(CPC 8674)NL/NL NL/NL NL/NL Uex/Uex
(h) Medical and dental services
(CPC 9312)NL/NL NL/NL NL/NL Uex/Uex
(i) Veterinary services
(CPC 932)NL/NL NL/NL NL/NL Uex/Uex
(j) Services provided by:
(i) midwives and nurses
(CPC 93191)Ud/Ud NL/NL NL/NL Uex/Uex
(ii) physiotherapists and paramedical personnel Ud/Ud Ud/Ud NL/NL Uex/Uex
B. Computer and Related Services
(a) Consultancy services related to the installation of computer
hardware(CPC 841)NL/NL NL/NL NL/NL Uex/Uex
(b) Software implementation services
(CPC 842)NL/NL NL/NL NL/NL Uex/Uex
(c) Data processing services
(CPC 843)NL/NL NL/NL NL/NL Uex/Uex
(d) Data base services
(CPC 844)NL/NL NL/NL NL/NL Uex/Uex
(e) Maintenance and repair services of office machinery and
equipment including computers(CPC 8450)NL/NL NL/NL NL/NL Uex/Uex
D. Real Estate Services
(a) Involving own or leased property
(CPC 821)NL/NL NL/NL NL/NL Uex/Uex
(b) On a fee or contracting basis
(CPC 822)NL/NL NL/NL NL/NL Uex/Uex
E. Rental/Leasing Services without Operators
(a) Relating to ships
(CPC 83103)NL/NL NL/NL NL/NL Uex/Uex
(b) Relating to aircraft
CPC 83104)NL/NL NL/NL NL/NL Uex/Uex
(c) Relating to other transport equipment
(CPC 83101 +)(CPC 83102 +)(CPC 83105)NL/NL NL/NL NL/NL Uex/Uex
(d) Relating to other machinery and equipment
(CPC 83106)
(CPC 83107)
(CPC 83108)(CPC 83109)NL/NL NL/NL NL/NL Uex/Uex
F. Other Business Services
(b) Market research and public opinion polling services
(CPC 864)NL/NL NL/NL NL/NL Uex/Uex
Table AIV.1 (cont'd)SACU-South Africa WT/TPR/S/114/ZAF
Page A4-301
Modes of supply
Sector or subsector Cross-border
supplyConsumption
abroadCommercial
presencePresence of
natural persons
Market access / National treatment
(c) Management consulting services
(CPC 865)NL/NL NL/NL NL/NL Uex/Uex
(d) Services related to management consulting
(CPC 8676)NL/NL NL/NL NL/NL Uex/Uex
(e) Technical testing and analysis services
(CPC 8676)NL/NL NL/NL NL/NL Uex/Uex
(f) Services incidental to agriculture, hunting and forestry
(CPC 881)U/U U/U NL/NL Uex/Uex
(g) Services incidental to fishing
(CPC 882)U/U U/U NL/NL Uex/Uex
(h) Services incidental to mining
(CPC 883)(CPC 5115)U/U U/U NL/NL Uex/Uex
(i) Services incidental to manufacturing
(CPC 884)(CPC 885)U/U U/U NL/NL Uex/Uex
(k) Placement and supply services of personnel
(CPC 872)NL/NL NL/NL NL/NL Uex/Uex
(l) Investigation and security
(CPC 873)NL/NL NL/NL NL/NL Uex/Uex
(m) Engineering related scientific and technical consulting
services(CPC 8675)NL/NL NL/NL NL/NL Uex/Uex
(n) Maintenance and repair of equipment
(CPC 633)NL/NL NL/NL NL/NL Uex/Uex
(o) Building-cleaning services
(CPC 874)Ud/Ud NL/NL NL/NL Uex/Uex
(p) Photographic services
(CPC 875)NL/NL NL/NL NL/NL Uex/Uex
(s) Convention services
(CPC 87909)NL/NL NL/NL NL/NL Uex/Uex
2. COMMUNICATION SERVICES
B. Courier Services
(CPC 7512)NL/NL NL/NL NL/NL Uex/Uex
C. Telecommunication Services
Facilities based and public switched telecommunication services:
(a) Voice services, except over value-added network OP/NL NL/NL OP/NL Uex/Uex
(b) Packet-switched data transmission services OP/NL NL/NL OP/NL Uex/Uex
(c) Circuit-switched data transmission services OP/NL NL/NL OP/NL Uex/Uex
(d) Telex services  OP/NL NL/NL OP/NL Uex/Uex
(f) Facsimile services OP/NL NL/NL OP/NL Uex/Uex
(g) Private leased circuit services OP/NL NL/NL OP/NL Uex/Uex
(h) Electronic mail
(CPC 7523)OP/NL OP/NL OP/NL Uex/Uex
(i) Voice mail
(CPC 7523)OP/NL OP/NL OP/NL Uex/Uex
(j) On-line information and data base retrieval
(CPC 7523)OP/NL OP/NL OP/NL Uex/Uex
(k) Electronic data interchange (EDI)
(CPC 7523)OP/NL OP/NL OP/NL Uex/Uex
(l) Enhanced/value-added facsimile services, including store
and forward, store and retrieve(CPC 7523)OP/NL OP/NL OP/NL Uex/Uex
(m) Code and protocol conversion OP/NL  OP/NL OP/NL Uex/Uex
(n) On-line information and/or data processing (including
transaction processing
(CPC 743)OP/NL OP/NL OP/NL Uex/Uex
(o) Other:
(i) paging services OP/NL NL/NL NLa/NL Uex/Uex
(ii) personal radio communication services OP/NL NL/NL NLa/NL Uex/Uex
(iii) trunked radio system services OP/NL NL/NL NLa/NL Uex/Uex
(iv) mobile cellular, including mobile data OP/NL NL/NL OP/NL Uex/Uex
(v) satellite-based services OP/NL NL/NL OP/NL Uex/Uex
3. CONSTRUCTION AND RELATED ENGINEERING
SERVICES
Table AIV.1 (cont'd)WT/TPR/S/114/ZAF Trade Policy Review
Page A4-302
Modes of supply
Sector or subsector Cross-border
supplyConsumption
abroadCommercial
presencePresence of
natural persons
Market access / National treatment
A. General Construction Work for Buildings
(CPC 512)U/U NL/NL NL/NL Uex/Uex
B. General Construction Work for Civil Engineering
(CPC 513)U/U NL/NL NL/NL Uex/Uex
C. Installation and Assembly Work
(CPC 514 +)
(CPC 516)U/U NL/NL NL/NL Uex/Uex
D. Building Completion and Finishing Work
(CPC 517)U/U NL/NL NL/NL Uex/Uex
4. DISTRIBUTION SERVICES
B. Wholesale Trade Services
(CPC 622)NL/NL NL/NL NL/NL Uex/Uex
C. Retailing Services
(CPC 631)
(CPC 632)(CPC 6111)(CPC 6113)
(CPC 6121)NL/NL NL/NL NL/NL Uex/Uex
D. Franchising
(CPC 8929)NL/NL NL/NL NL/NL Uex/Uex
6. ENVIRONMENTAL SERVICES
A. Sewage Services
(CPC 9401)NL/NL NL/NL NL/NL Uex/Uex
B. Refuse Disposal Services
(CPC 9402)NL/NL NL/NL NL/NL Uex/Uex
C. Sanitation and Similar Services
(CPC 9403)NL/NL NL/NL NL/NL Uex/Uex
D. Other
Cleaning services of exhaust gases, noise abatement services
and landscape protection services)NL/NL NL/NL NL/NL Uex/Uex
7. FINANCIAL SERVICES
A. All Insurance and Insurance Related Services
(a) Direct life insurance
(CPC 8121 +)U/U NL/NL OP/NL Uex/Uex
(b) Direct non-life insurance
(CPC 8129 +)U/U NL/NL OP/NL Uex/Uex
(c) Reinsurance
(CPC 81299 +)U/U NL/NL OP/NL Uex/Uex
(d) Insurance intermediation and auxiliary services
(CPC 8140)U/U NL/NL OP/NL Uex/Uex
B. Banking and other Financial Services
(Excluding Insurance)
(a) Accepting of deposits and other repayable funds from the
public(CPC 81115 to 81119)U/U Ub/U  OP/OP Uex/Uex
(b) Lending of all types, including, inter alia, consumer credit
mortgage credit, factoring and financing of commercialtransactions
(CPC 8113)U/U Ub/U OP/OP Uex/Uex
(c) Financial leasing
(CPC 8112)U/U Ub/U OP/OP Uex/Uex
(d) All payments and money transmission services, including
credit, charge and debit cards, travellers cheques and bankdrafts(CPC 81339 +)U/U Ub/U OP/OP Uex/Uex
(e) Guarantees and commitments
(CPC 81199 +)U/U Ub/U OP/OP Uex/Uex
(f) Trading for own account or for account of customers the
following:U/U Ub/U OP/OP Uex/Uex
(i) money market instruments
(CPC 81339 +)
(ii) foreign exchange
(CPC 81333 +)
(iii) derivative products
(CPC 81339 +)
Table AIV.1 (cont'd)SACU-South Africa WT/TPR/S/114/ZAF
Page A4-303
Modes of supply
Sector or subsector Cross-border
supplyConsumption
abroadCommercial
presencePresence of
natural persons
Market access / National treatment
(iv) exchange rate and interest rate instruments
(CPC 81339 +)
(v) transferable securities
(CPC 81321 +)
(vi) other negotiable instruments
(CPC 81339 +)
(g) Participation in issues of all kinds of securities,
including underwriting and placement as agent(CPC 8132 +)U/U Ub/U OP/OP Uex/Uex
(h) Money broking
(CPC 81339 +)U/U Ub/U OP/OP Uex/Uex
(i) Asset management, such as cash or portfolio management,
all forms of collective investment management, pensionfund management, custodial depository and trust services(CPC 8119 + and 81323 +)U/U Ub/U OP/OP Uex/Uex
(j) Settlement and clearing services for financial assets,
including securities, derivative products and other negotiable
instruments.U/U Ub/U OP/OP Uex/Uex
(k) Provision and transfer of financial information, and financial
data processing and related software by providers of otherfinancial services(CPC 8131 +)U/U Ub/U OP/OP Uex/Uex
(l) Advisory and other auxiliary financial services on all
the activities listed in Article 1B of MTN.TNC/W/150(CPC 8131 + and 8133 +)U/U Ub/U OP/OP Uex/Uex
9. TOURISM AND TRAVEL RELATED SERVICES
A. Hotels and Restaurants
(including catering)
(CPC 741)Uc/NL NL/NL NL/NL Uex/Uex
B. Travel Agencies and Tour Operators Services
(CPC 7471)NL/NL NL/NL NL/NL Uex/Uex
C. Tourist Guide Services
(CPC 7472)Ud/Ud NL/NL NL/NL Uex/Uex
11. TRANSPORT SERVICES
F. Road Transport Services
(a) Passenger transportation
(CPC 7121)(CPC 7122)U/U U/U NL/NL Uex/Uex
(b) Freight transportation
(CPC 7123)U/U U/U NL/NL Uex/Uex
(d) Maintenance and repair of road transport equipment
(CPC 6112)Ud/Ud NL/NL NL/NL Uex/Uex
12. OTHER SERVICES INCLUDED ELSEWHERE
Washing, cleaning and dyeing services
(CPC 9792)Ud/Ud NL/NL NL/NL Uex/Uex
Hairdressing and other services
(CPC 9702)Ud/Ud NL/NL NL/NL Uex/Uex
Symbols:
NL No limitations, i.e., South Africa agreed to place no constraints on the item in question.
U Unbound, i.e., South Africa made no engagements with respect to the item in question.Uex Unbound except as provided by South Africa's horizontal commitments.
OP Other provisions apply.
a Except that foreign investment in suppliers permitted up to a cumulative maximum of 30%.
b Except for provision and transfer of financial information and financial data processing.
c Except for catering:  no limitations.
d Due to lack of technical feasibility.
Source : WTO document GATS/SC/78, 15 April 1994 and its supplements (1, 2, and 3).