WORLD TRADE  
ORGANIZATION  WT/TPR/M/222 
7 December 2009 
 (09-6199) 
Trade Policy Review Body 
4 and 6 November 2009  
 
 
 
TRADE POLICY REVIEW 
 
SOUTHERN AFRICAN CUSTOMS UNION 
 
Record of the Meeting  
 
Chairperson:  H.E. Mr. Istvan Major (Hungary) 
 
  Page 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3 
II. OPENING STATEMENT BY THE REPRESENTATIVE OF SACU 4 
III. STATEMENT BY THE DISCUSSANT 7 
IV. STATEMENTS BY MEMBERS 11 V. REPLIES BY THE REPRESENTATIVE OF SACU AND ADDITIONAL COMMENTS 39 
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 47 
 
 
 
Note:   Advance written questions by WTO Members and the replies provided by the Governments 
of SACU are reproduced in document WT/TPR/M /222/Add.1 and will be available online at:  
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm.    WT/TPR/M/222 
 Page 3 
 
 
  I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The third Trade Policy Review of the So uthern African Customs Union (SACU) 
(i.e. Botswana, the Kingdom of Lesotho, Namibia,  South Africa, and the Kingdom of Swaziland) was 
held on 4 and 6 November 2009.  The Chairpers on H.E. Mr. Istvan Major (Hungary) welcomed the 
heads of the five delegations:  Mr. Kedibonye Lale tsang, Deputy Permanent Secretary at the Ministry 
of Trade and Industry of Botswana;  Mr. Teleko Ramo tsoari, Principal Secretary at the Ministry of 
Trade and Industry, Cooperatives, and Marketing of  the Kingdom of Lesotho;  Dr. Malan Lindeque, 
Permanent Secretary at the Ministry of Trade and Industry of Namibia;  Mr. Siyabulela Tsengiwe, 
Chief Commissioner at the International Trade Administration Commission of South Africa;  
Mr. Cyril J.M. Kunene, Principal Secretary at the Ministry of Commerce, Industry and Trade of the 
Kingdom of Swaziland, and the discussant, H.E. Mr. Yonov Frederick Agah (Nigeria).   
2. The Chairperson recalled the purpose of the Trad e Policy Reviews and the main elements of 
the procedures for the meeting.  The reports by  the SACU Members were contained in document 
WT/TPR/G/222 and that of the WTO Secretariat in WT/TPR/S/222. 
3. Questions by the following delegations had been  submitted in writing at least two weeks in 
advance and had been transmitted to the delegati ons of the SACU countries: China;  Brazil;  
Switzerland;  Canada;  the European Communities;  the United States;  Singapore;  Australia;  Chile;  
the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu;  the Republic of Korea;  
Hong Kong, China;  Japan;  and Colombia.  All advance questions, as well as the responses received 
from the delegations of the SACU countri es are reproduced in WT/TPR/M/222/Add.1. 
4. The following delegations had submitted written questions after the two-week deadline:  
Mexico;  Ecuador;  and India. 
5. The Chairperson noted that the documentation pr epared for this review emphasized the steps 
taken by SACU members since their last review in 2003 to further liberalize their economies.  
Reflecting their high dependence on internationa l trade as small economies, the reforms had 
simplified the structure of their common external tariff, and reduced the overall average rate from 
11.4% in 2002 to 8.1% in 2009.  The 2002 SACU Agreement was democratizing the decision-making 
process within the Union;  it called for harmonization of policies in key areas, including industrial development, agriculture and competition, the comm on trade regime remaining so far confined to 
customs-related issues.  On non-harmonized issues, the Secretariat report indicated that the other 
SACU countries were slowly building upon or aligning their regimes on the South African.  SACU countries were generally having difficulties in mee ting WTO notification obligations.  They were 
making efforts to address structural constraints that  had added to the impact  of the global financial 
and economic crisis on their recent economic performance. WT/TPR/M/222 
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  II. OPENING STATEMENT BY THE REPRESENTATIVE OF SACU  
6. It is an honour and privilege for me to deliver th is statement on behalf of the Southern African 
Customs Union (SACU) consisting of following Me mber States:  the Republic of Botswana, the 
Kingdom of Lesotho, the Republic of Namibia, th e Republic of South Africa; and the Kingdom of 
Swaziland. 
7. We firmly believe in the transparency that the trade policy review process seeks to promote, 
and thus we re-affirm our commitment to opening up our trading regimes for evaluation within the 
context of our obligations under the WTO. This commitment shows our unrelenting support of and 
belief in the multilateral process. 
8. The Southern African Customs Union dates back to 1910. Following the attainment of 
independence by the British High Commission Territories in the mid-1960s, a new agreement was 
signed on 11 December 1969 by the sovereign stat es of Botswana, Lesotho and Swaziland (BLS), as 
well as South Africa.  
9. The signing in 1994 of the Marrakesh Agreement heralded a new era of trade liberalisation, 
leading to the establishment of the WTO in 1995. During the same time important political 
developments took place in Southern Africa with th e achievement of the independence of Namibia in 
1990 and the attainment of democracy in South Afri ca in 1994. To take advantage of these important 
global and regional developments, SACU Member States took a decision in 1994 to renegotiate the 
1969 SACU Agreement to better reflect the prev ailing political and economic environment. The 
overriding desire of the SACU Member States was to have an international organisation with 
effective, transparent and democratic institutions , based on joint decision-making procedures, while 
also providing for a dispute settlement mechanis m and the development of common policies.   
10. The five SACU Member States had signed a new and comprehensive Agreement in 2002 in 
Gaborone, Botswana. In 2003 at the 2
nd WTO Review of SACU Member States, the WTO 
membership was updated on progress made in the ra tification and implementation of the newly signed 
agreement.  This Agreement entered into force on 15  July 2004 following its ratification by all SACU 
Member States. Therefore, this is the first review of the SACU countries following the 
implementation of the new agreement. I wish to not e that this agreement was notified and successfully 
considered by the Committee on Regional Trade Agreement at its 53rd sitting earlier this year.  
11. The 2002 SACU Agreement is comprehensive when compared to that of 1969 and the entry 
into force thereof presented a major milestone in  the life of SACU. The main features of the 
agreement can be summarised as follows: 
12. Joint decision-making processes:  The 2002 Agreement provides for clear decision-making 
process whereby all SACU Member States are involve d, with decisions taken based on consensus. 
13. The establishment of common institutions:  The agreement establishes a number of 
common institutions, with the SACU Council of Mini sters being the highest decision-making body in 
SACU, supported by the SACU Commission, the Technical Liaison Committees and the SACU 
Secretariat. Establishing the latter marked an important milestone in the democratisation process of 
SACU. It is a permanent institution based in Windhoe k, Namibia, and is responsible for the day-to-
day administration of the agreement, while also pr oviding support and advice to the other institutions 
established under the agreement. The agreement fu rther provides for the establishment of a SACU 
Tariff Board, which will be responsible for setti ng and implementing tariff policy. The Tariff Board 
will be supported by National Bodies in Member  States. The agreement also establishes an ad hoc  
Tribunal created to resolve any differences that might occur amongst Member States.  WT/TPR/M/222 
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  14. Revenue-sharing formula:  The Agreement provides for a revenue-sharing formula that 
determines how revenue derived fro m customs and excise duties must be shared, taking into account 
the differing levels of economic devel opment amongst SACU Member States.  
15. Trade relations with third parties:  The Agreement further provid es for the establishment of 
a Common Negotiating Mechanism. As a Customs Union,  SACU will have to ensure the integrity of 
the Common External Tariff. As a result, the C ouncil decided that SACU should enter all trade 
negotiations with third parties as a bloc. The CN M will therefore assist SACU in fulfilling this 
mandate and is seen as an impor tant tool in deepening integra tion amongst SACU Member States, 
which is done with a view to enhancing SACU Me mber States’ integration into the global economy. 
16. Development of common policies:  The Agreement recognizes that economic integration 
cannot proceed in the absence of common polici es. The Agreement therefore calls for the 
development of common or harmonized policies, or increased co-operation, in the areas of industrial 
development, agriculture and competition policy. 
17. One of the key objectives of SACU is to enhance trade amongst its Member States by 
facilitating the free movement of goods, whilst deep ening integration through cooperation in the 
development of mutually beneficial economic and trade policies. At the same time, the Agreement 
recognises the different levels of economic devel opment of the Member States and the need to 
provide for their economic development. SACU Member  States interact with each other from varying 
levels of development. We comprise of 4 developi ng countries, 3 of which are small and vulnerable 
economies and 1 least developed country. This le vel of divergence in economic development has 
created its own unique challenges, not only within the region, but also in our engagement at the 
multilateral and bilateral levels. However, this factor  has not hindered our effective interaction in the 
pursuit of what we consider to be in our common interest.  
18. We are fully aware that in the pursuit of our  objectives there will be challenges on the way. 
However, we are committed to ensuring that these objectives are achieved, and in this process, we 
invite our trading partners to support our efforts,  and in particular, the strengthening of SACU and 
country-level institutions. 
19. SACU Member States have also resolved to accelerate the full implementation of the 
agreement, including policy development a nd harmonisation initiatives, and strengthening and 
establishing effective institutions to facilitate the achievement of SACU objectives. At a recent SACU 
Council meeting in September 2009 in the Kingdom of  Swaziland, important decisions were adopted 
to implement a programme of review and realignment of the organisation to bring it even more in line 
with the modern requirements of the 21st century. 
20. As a Customs Union, SACU Member States ha ve decided to undertake trade negotiations 
with third parties collectively. The Agreem ent provides for the establishment of a Common 
Negotiating Mechanism (CNM) for such purpose. I am  happy to pronounce to you that, since the last 
review, SACU has signed a Free Trade Agreemen t with EFTA States and a Preferential Trade 
Agreement (PTA) with MERCOSUR countries, while we  are also engaged in negotiations with India 
towards a PTA. In addition, we have signed a Trade, Investment and Development Cooperation 
Agreement with the USA aimed at facilitating in creased trade between the two Parties to the 
agreement. Our guiding principle in negotiating all these regional trade agreements has been 
adherence to the WTO GATT 1994 provisions that apply in this regard. 
21. Since 2003, SACU Member States have collectivel y expanded at an average annual rate of 4 
%, which supported our stated objective to uplift our economies from poverty and achieve the 
Millennium Development Goals. In order to su stain this growth, SACU Member States are 
developing and adopting policies aimed, inter alia , at attracting investment, promoting WT/TPR/M/222 
Page 6  
 
  industrialization, improving competitiveness and encouraging sustainable development. These 
policies are premised on sound macroeconomic fundamentals.  
22. SACU has made significant improvements in her tariff profile since the last review.  SACU 
will continue with efforts to simplify its tariff struct ure in line with the international trends in this 
regard. Currently, 96.8% of all tariff lines carry ad valorem  rates as compared to the 75% reported 
during the last review. Furthermore, there are onl y 98 tariff lines with mixed duties; a significant 
decrease from the 1 774 lines reported at the last re view. These improvements in our tariff structure 
signify our commitment to facilitate trade by creating a simplified and transparent trading environment for economic operators.  
23. The global economic and financial crisis has had repercussions on economic growth in the 
SACU region. It has led to negative growth being recorded for the first ti me since mid-1990. At the 
same time it has led to the loss of export opportuniti es, as our most important trading partners have 
scaled down economic activity, curtailing imports. Mo st of the SACU countries’ export profile is 
based on a few export products, which makes the co untries vulnerable to any exogenous shocks such 
as the current global financial crisis. The disruption of economic activity in our target markets has not 
only caused significant market loss for our exporters, but  has also led to a major fall in export prices, 
thus putting strain on the current account balan ce. We therefore support calls to sustain the 
momentum reached in the discussions on Aid for Trad e. In this regard I can report that SACU is 
currently in the initial stages of developing a region al strategy and preparing a common infrastructure 
plan for Aid-for-Trade. 
24. We wish to support calls made by other devel oping countries for the successful conclusion of 
the Doha round of negotiations by 2010. We firmly  believe that the conclusion of the round should 
bring about meaningful market access for all deve loping countries. It is only through meaningful 
market access that the multilateral trading system can  help the development of our economies. It is 
our wish that the outcomes of the Doha negotiations  will therefore strengthen and support our efforts 
to further integrate into the global trading system and thereby help us to achieve sustained economic 
growth and development. The SACU Member States have played an active role in the negotiating 
process. Let me take this opportunity to reaffirm  SACU’s commitment to the multilateral process and 
pledge our continued constructive engagement towa rds favourable conclusion of the current round of 
Negotiations. 
25. In conclusion, SACU will be commemorating a hundred years of existence next year. This 
bears testimony to our longstanding commitment towa rds integration. In reviewing our existence, 
SACU has come to the conclusion that, the Cust oms Union has the potential to be an effective 
instrument for further integration and economic  cooperation. Therefore, Member States have 
recommitted themselves to further strengthen this  organisation as a vehicle for implementing a 
common agenda towards regional integration in Southern Africa.    WT/TPR/M/222 
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  III. STATEMENT BY THE DISCUSSANT (H.E. Mr. Yonov Frederick Agah (Nigeria)) 
26. For the benefit of those who may not be aw are, SACU was founded as far back as 1910; and 
is therefore easily one of the worl d’s oldest customs unions.  Howeve r, the first SACU Agreement of 
sovereign states was only signed in 1969.  Today,  SACU comprises the five member states of 
Botswana, Lesotho, Namibia, South Africa and Swaziland.   
27. One aspect of SACU that I find most interesting is its history. I must confess that this is due 
to my bias as an African, rather than  an ideologue. In that regard, what I consider as most important is 
the fact that the history of SACU closely reflects that of the African continent as a whole. On that 
note, I wish to draw from Martin Meredith’s book, The State of Africa: A History of Fifty Years of 
Independence , and recall that during the Scramble for Africa at the end of the 19th Century, European 
powers laid claims to virtually the entire continen t. European negotiators drew straight lines on the 
map, taking little or no account of the myriad of traditional monarchies, chiefdoms and other African 
societies that existed on the ground. And it is in that  context that the resulting colonial territories and 
the subsequent independent African States have enclosed hundreds of diverse and independent 
groups, with no common history, culture, language and religion.  Indeed, the haggling in Europe over 
African territory, land and peoples largely produced m odern states that were enforced both by treaty 
and by conquest. 
28. In the case of SACU, the Basuto King, Mosho eshoe, fearful of the encroachment of white 
settlers into his mountain terrain in southern Africa,  appealed for the protection of Queen Victoria.  
Several of his neighbours, particularly the Tswana  chiefdoms of Buchuana land (Botswana) and the 
Swazi followed in his steps and example.  With resp ect to South West Africa (Namibia), the story was 
different.  Following resistance and rebellion, th e German administration inflicted a reign of 
repression and conquest between 1904 and 1908.  However, as a result of the territorial compromises 
and sharing of German territories after the First World War, South West Africa was handed over to 
South Africa.  
29. The Union of South Africa, on the other hand, w as founded in 1910. It is important to note 
that this date is instrumental to the establishment of  SACU. Britain, which was then at the height of its 
imperial power, set out to take over two independent Boer republics,  the Transvaal and the Orange 
Free State, and incorporate them into the British Em pire. The result was a grueling campaign that took 
half a million imperial troops to finish, leaving a le gacy of bitterness and hatred among the Afrikaners 
that endured for generations, including the virulent  Afrikaners nationalism that eventually took hold 
of South Africa. 
30. Against the above historical background, it would be interesting to hear how the evolution of 
regional integration among the m odern SACU countries has taken into consideration the overall 
objective to consolidate African regional integratio n as a development strategy aimed at achieving 
meaningful industrialisation, developing intra-Afri can trade and participating effectively in the 
evolving global linkages, as well as building A frican unity and consolidating regional political 
structures. 
31. After these introductory comments, my discussi on of the trade policies and practices of 
SACU would now focus on the three usual themes, viz., macroeconomic environment; trade policy; 
and sectoral policies. 
Macroeconomic Environment 
32. As highlighted in the Secretariat Report, s ubstantial differences in  levels of economic 
development continue to exist among the SACU  States. While Botswana and South Africa are 
classified as upper middle-income countries, Namibia and Swaziland are considered as lower middle-WT/TPR/M/222 
Page 8  
 
  income countries. Lesotho is a least developed country (LDC).  During the review period, while the 
economies have collectively expanded at an average of four per cent in real terms, the growth 
performance of some countries has been largely erratic , reflecting mainly in infrastructure constraints, 
electricity supply shortages, cyclical mining output and exchange rate adjustments, as well as the 
impact of the current global economic crisis.  Amid st these imbalances, is the persistent dominance of 
the South African economy, which, during the peri od under review, accounted  for 87% and over 90% 
of the total population and aggregate GDP of SACU, respectively.  The Secr etariat Report notes that 
for the countries to fully integrate and achieve sust ained economic growth, infrastructure in the region 
needs to be improved.  In this respect, it would be  interesting to hear how South Africa has or intends 
to discharge its responsibilities, in accordan ce with its leadership position in SACU. 
33. The SACU economies have maintained their traditionally high dependence on international 
trade; and the structure of economic activity has not  changed significantly since the last review in 
2003. Overall, the ratio of aggregate trade in g oods and services, as a percentage of GDP, increased 
from 56.5% in 2002 to 66.6% in 2007.  However, apart from Botswana, which has maintained surpluses throughout the review period, Lesotho,  Namibia and Swaziland ha ve continued to post 
deficits.  Thus, the positive trade balance recorded by the SACU countries during the last review has 
given way to a deficit that has risen from US $4,388 million in 2004 to US$13,704 million in 2007, 
mainly reflecting the reversal of South Africa’s pos itive record due to declining exports as a result of 
electricity-related constraints; and an increasing de mand for imports of machinery. Similarly, the 
contribution of services, manufacturing and agricult ure to SACU’s GDP has generally experienced 
some marginal decline.  
34. Nonetheless, the SACU countries clearly con tinue to face common challenges, notably 
unemployment, income inequality, poverty, and HIV/AI DS. With the limited level of inflows of FDI 
in SACU and the overdependence of most of its national economies on a narrow range of products, it 
would be important if SACU woul d explain how it intends to address these adverse trends in the face 
of the present global economic meltdown. 
Trade Policy 
35. SACU has clearly continued on the path of economic reform and adjustment that was 
underlined during the last review in 2003. This is not surprising, as all the economies have remained 
increasingly trade-dependent. I believe that it is also in recognition of this reality that the 1969 SACU 
Agreement was renegotiated and si gned on 21 October, 2002.  Moreover, the preamble to the 2002 
SACU Agreement explicitly acknowledged the lack of common policies and institutions under the old 
regime.  Issues relating to institutional structure;  common revenue pool and sharing formula; common 
policies; dispute settlement mechanism; and the Common Monetary Area (CMA) have been 
comprehensively highlighted in the Secretariat Report .  It is highly commendable that most of the 
institutions have been established a nd are functional since the last review.  Members are also adopting 
the SACU Model Law on National Bodies.   
36. However, in spite of the 2002 SACU Agreemen t, some policy harmonisation challenges still 
persist.  First, there is no formal harmonisation of fiscal policy in SACU. Customs and excise duties, 
which are basically still determined by South Afri ca, constitute a major sour ce of revenue for the 
relatively smaller economies (BLNS), but make up a negligible portion of South Africa's fiscal 
receipts. In addition, payments under SACU's re venue-sharing arrangement account for more than 
half of total government income in Lesotho and Swaziland, while the corresponding figures for 
Namibia and Botswana are in the order of 30% and 25%, respectively.  By contrast, these payments 
represent only about one per cent of South Africa's total income. 
37. Second, there is a complexity of over-lapping trade arrangements with third parties.  In 
particular, all the five SACU member states are also members of Southern African Development  WT/TPR/M/222 
 Page 9 
 
 
  Community (SADC) in their respective individual capacities. While South Africa has a separate 
bilateral agreement with European Communities (EC), the other members are signatories to the 
Cotonou Partnership Agreement between the EC and the Africa, Caribbean and Pacific Group of 
States. The SACU countries also benefit from the GSP Schemes of many developed and developing 
countries in their individual capacities. One is happy to  note that as part of the effort to harmonise its 
internal trade policy, SACU has now been directed  to negotiate new preferential-trade agreements 
with third countries as a bloc.  However, since the 2002 SACU Agreement has also allowed members 
to maintain pre-existing preferential-trade agreem ents and related arrangements, the overall common 
trade policy regime appears complex and would need to be further fine-tuned.  I have observed that 
questions submitted by some Members have arisen largely as a result of this development, which 
appears to have raised significant issues of tran sparency and predictability of the SACU common 
regime. 
38. I have already acknowledged the commitment a nd active participation of the SACU countries 
in the WTO.  The individual reports by the members of SACU have also underscored their active engagement in the Doha Development Agenda (DDA) negotiations, with a view to attaining 
favourable outcomes, trade-related capacity building and aid for trade; as well as ensuring that the 
DDA is truly a development round. Given the significant differences in the levels of economic development and prospects among the SACU countri es, it is my expectation that Members would 
demonstrate understanding and exercise the requisite flexibilities that would provide a solution to the 
liberalisation commitments to undertaken by SACU  and other regions in si milar situations.    
Sectoral Policies 
39. In spite of the prevailing challenges emanati ng from the global economic environment, it is 
very heartening to note that there have been no major changes to the common trade policies applied 
by the SACU Members.  There have also been no changes to the customs valuation provisions. 
Indeed, the SACU members have on top of that continued to adopt several initiatives to promote 
harmonisation and facilitate trade. However, there r oom for further improvements, particularly with 
respect to the harmonisation of regional sectoral polic ies, including competition, investment and fiscal 
incentives, as well as intellectual property protection and enforcement. 
40. It is also noteworthy that even though South Africa, after due consultations, continues to set 
the applied MFN tariff for all SACU Members, the tariff structure has been simplified, with the 
elimination of compound duties.  The percentage of tariffs bearing ad valorem  duties has also 
increased substantially from 75% in  2002 to 96% in 2009.  The average applied MFN tariff rate has 
declined from 11.4% in 2002 to 8.1% in 2009, even though the relative dispersion of the tariff rates 
appears to have increased. Some specific and mi xed duties also still apply mainly to agricultural 
products, coal as well as some textile and footwear products. There is therefore need for SACU to 
sustain and improve on the progress so far made in this area. 
41. In respect of specific sectoral policies, I have  considered it prudent to focus only on a few 
areas. Consequently, it is important to note that the contribution of agriculture to GDP, during the 
period under review, has generally declined in bot h Lesotho and Namibia.  In Botswana, a major 
policy thrust has been the removal of the cu rrent monopoly by the Botswana Meat Commission 
(BMC) regarding the export of meat products.  The use of tariffs as an instrument of agricultural trade 
policy remains in place with respect to South Africa.  In Namibia, crops’ farming is dominated by the 
livestock sub-sector. Consequently, there is a gr owing need for SACU countries to pay special 
attention to the improvement and diversification of agricultural production, taking into account the 
important role of the sector in achieving food securi ty, livelihood security and rural development.   WT/TPR/M/222 
Page 10  
 
  42. The mining sector remains central in the SACU  economies.  However, the key challenges 
remain how to strike the balance between the op timisation of economic be nefits for the national 
economies and liberalisation of the sector to promote investment and economic growth. 
43. The 2003 trade policy review of SACU had drawn attention to, inter alia,  the declining share 
of agriculture to GDP; the need for a regional vision of integration in mining by South Africa, 
Botswana and Namibia, in view of the sector’s importance as a revenue and foreign exchange earner; 
and the positive results of the African Growth a nd Opportunity Act for the textiles and clothing 
sectors of SACU members, especially Lesotho.  It would appear that the overall circumstances of 
these sectors have hardly substantially improved. I am, therefore, tempted to ask what measures have 
been put in place by SACU since the last review ; and why have those measures not produced the 
desired results?  
Conclusion 
44. I have in this discussion only attempted to highlight some of the issues that I consider as 
central to the understanding and appreciation of the trade policies of SACU and its member states.  I 
have also tried to avoid taking up some of the areas that have drawn significant interest from the 
membership, taking into account the questions that  have been submitted to SACU and its individual 
members.  Some of these issues include intellectua l property rights, the development of new national 
trade policy frameworks, contingency trade remedies,  standards and technical requirements as well as 
national industrial development strategies, inv estment, competition and consumer protection. 
45. I should, therefore only conclude by, once ag ain, acknowledging the progress that has been 
made by SACU members, in spite of the prevaili ng unfavourable external c onditions confronting their 
fragile economies.  I encourage Members to s upport SACU as it puts in place policy initiatives and 
programmes that would engender sustainable economic  progress and prosperity, for the benefit of its 
peoples and the global community.  WT/TPR/M/222 
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  IV. STATEMENTS BY MEMBERS 
CHINA 
46. We are very happy to note that the joint effo rts of SACU Members have further strengthened 
the institutions as a customs union. The common and harmonized economic and trade policies have contributed to their integration into the world economy. 
47. SACU and China have enjoyed very close a nd mutually benefiting trade relationship for 
decades. Bilateral trade registered the fastest growth  during the review period. Just take South Africa 
and Lesotho as two examples. South Africa is the sec ond largest trading partner of China in Africa. In 
2008, trade between China and South Africa totalled  17.8 billion US dollars, which represents an 
increase of 27% over 2007. As a comparison, a lthough trade between China and Lesotho is still 
modest, which stayed at 82 million US dollars in 2008, there is great potential for expansion. Since 
1 January 2005, China started to provide duty-fr ee-quota-free treatment to products originating from 
LDCs. We hope this will help prom ote trade between China and Lesotho as a least developed country. 
China’s trade with Botswana and Namibia are also developing fast. 
48. Apart from trade, the strong momentum of deve lopment has been maintained in the areas of 
investment and economic cooperation during the period under review.  
49. As of June 2009, South African enterprises ha ve had investments in 629 projects in China 
which amounted to 520 million US dollars. Famous enterprises present in China include Sasol and 
SAB, the South African Breweries. On the other ha nd, Chinese enterprises are al so investing in South 
Africa, Namibia, Botswana and Lesotho. As of June 2009, China’s investment in South Africa 
reached 837 million US dollars ranging from food, clothing, mining, electrical appliances to transport 
and telecommunications. Economic cooperation between China and SACU under the framework of 
the Forum on China-Africa Cooperation (FOCAC) has been progressing smoothly, which covers such 
areas as housing facilities, schools, hospitals, stadiums, ro ads, railways, airports, irrigation works, etc.  
50. Last Saturday, the Ministry of Foreign Affairs of China held an open day of FOCAC in 
Beijing which was greatly welcomed by the public of China and our African friends in China. This 
Sunday, the Fourth Ministerial Conference of FOCA C will be held in Sharm el-Sheikh of Egypt, 
where Chinese Premier Wen Jiabao will be present. We  have firm confidence that it will be a fruitful 
conference. 
51. The Secretariat Report has noted that SACU countries have strong interests in the WTO, 
including on issues specifically related to th e Doha Negotiations. These interests include the 
commitment to ensuring that the developmental con cerns of developing countries and least developed 
countries are reflected in the final outcome of these negotiations. China fully shares these interests. In 
this regard, we highly commend th e personal contributions made by Mr. Faizel Ismail of South Africa 
as coordinator of NAMA 11 and Ambassador Anthony Maruping of Lesotho as coordinator of the 
LDC Group. 
BRAZIL 
52. One of the mainstays of Brazilian foreign policy during the Government of President Lula has 
been to strengthen its economic and commerc ial ties with partners from the South.  
53. One of the main recent achievements to furt her this objective was the conclusion of the 
Preferential Trade Agreement between Mercosur a nd SACU. This agreement comprises not only tariff 
preferences, but also rules of origin, safegua rds, dispute settlement, SPS measures and customs 
cooperation.  WT/TPR/M/222 
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  54. Although in terms of tariff line coverage the inst rument is still limited, we consider it to be a 
first step in the direction of a broader and deeper agreement. We also welcome the ongoing India-SACU trade negotiations, as we belie ve its conclusion will be an add itional stepping stone on our way 
to a Trilateral Trade Agreement which sh all unite Mercosur, India and SACU.  
55. We hope that the agreements under negotiation by SACU will help the bloc – the oldest Trade 
Customs Union, in place since 1910 - to address the formidable twin challenges of integration and 
economic and social development. Those challenges are also opportunities, particularly in areas where 
cooperation is fundamental: food security, infrastructure deficiencies and HIV/Aids.     
56. Economic challenges are no less formidable: hi gh level of unemployment and the current 
trade deficit of the bloc call for further reforms in  the agricultural sector and the diversification of 
SACU member’s economies.   
57. On the other hand, we would like to commend SACU for the progress accomplished in the 
tariff area: the low level of MFN applied rates th at was further brought down from 11.4% in 2002 to 
8.1% in 2009; the simplification of its tariff structur e, that resulted in increasing the percentage of ad 
valorem  rates from 75% in 2002 to over 96% in 2009; and the decrease in the number of lines of both 
specific and mixed duties. It is also noteworthy that the highest average tariff protection is at 7.8% for 
non-agricultural products.  
58. We also welcome the recent harmonization of  customs procedures by the introduction of a 
single administrative code and the adoption of a st andard custom procedure code.  I will address the 
trade policies of the SACU members individually. 
59. Brazil would like to praise the recent econo mic performance by Botswana, a model in 
governance in Africa, which has led to the figure of  USS 7,000 as average GDP per capita. It is true, 
however, that Botswana has to deploy further effo rts in addressing the question of income inequality. 
We also commend the country’s efforts to fight HIV and to guarantee a free-of-charge distribution of retro-virals, a policy we follow in Brazil with excelle nt results in coping with  this scourge. Botswana 
is faced with the need to diversify its economy in  order to shield it from the ups and downs of the 
market of diamonds. In this context, the recent substantial increase of apparel exports is to be 
welcomed. To make this viable, as it is the case fo r other SACU members, the dependence on energy 
imports has to be further addressed. An initiative that  is likely to generate important results is the 
support scheme to small and medium enterprises.  
60. With regard to Lesotho, the economic performan ce is improving markedly with the growth of 
its GDP, driven by the diamond production, and as in the case of Botswana, by its textiles and 
clothing industry. It is also good news that the inflow of foreign direct investment has tripled in the 
last years and that the Government has taken measure s to facilitate investment s in the country, despite 
many structural constraints. We recognize the big ch allenges Lesotho had to face in the last years in 
order to deal with difficulties such as food securi ty and agricultural development, as a result of a 
severe drought. 
61. We are particularly appreciative of the step s taken to mainstream trade in its national 
development policy, as reflected in the establishm ent of the National Steering Committee, in 2002. 
Also, the initiative of the DTIS (Diagnostic Trad e Integration Study) carried out in the country 
deserves our praise. We hope that the identified needs will be fully addressed. 
62. I would like to turn now to Namibia, which between 2003 and 2008, experienced an 
impressive yearly GDP growth of 6% and an  important overall improvement in the human 
development indicators. It is also worth mentioning th at the annual inflow of foreign direct investment 
more than tripled over 2003-07. The macroeconomic  fundamentals are solid: low inflation rates,  WT/TPR/M/222 
 Page 13 
 
 
  surpluses in both its overall fiscal situation and extern al current account. The efforts deployed by the 
Government in preparing itself for the eventual d ecline in the SACU import duty revenues are to be 
commended. On the other hand, one vulnerability of Namibia rests in its energy sector where imports 
of oil and electricity account for 3/4 of  the national energy consumption.  
63. Brazil is also impressed with the establishment of national committees on NAMA, 
Agriculture, Services, Aid for Trade and Fisheries. The setting up of those institutions reflects a high 
degree of awareness on the need to coordinate domestic efforts, thus enabling an adequate 
participation in the multilateral fora. We are also  glad to witness advancements in the area of 
intellectual property rights. We would like to even tually receive more information on the sui generis 
system to protect new plants varieties, micr o-organisms and non-biological and microbiological 
processes which is currently under elaboration.    
64. Turning now to Swaziland, our attention is draw n to high rate of HIV infections in the 
country. The other human development indicators al so portray, unfortunately, a troublesome scenario. 
Against this background, we agree with need to set up a broad and comprehensive institution, which 
will be responsible for addressing and elaborating a strategy so that the country can overcome the 
many supply constraints it faces.  
65. With respect to the recent economic performance of  South Africa, we would like to highlight 
the improvement in the climate for investment, wh ich led foreign direct investments to increase 
sevenfold between 2003 and 2007.  
66. At the same time, we note that even though pub lic spending in infrastructure is increasing, the 
Government has been successful in reducing the public debt. We also commend the land reform 
program and other incentives adopted to s upport disadvantaged farming communities.  
67. Nevertheless, there are sources of concern as well,  related to the growing deficit in the current 
account; high level of unemployment; growing inflati on; energy shortage a nd appreciation of the 
rand. As pointed out in the report, in some cases, the high costs of inputs constrain development of the 
manufacturing sector in the country.  
68. In conclusion, this TPR has brought to th e fore SACU members’ strong development 
concerns. The thorough examination of the economic performance of the bloc and the challenges it is 
confronted strengthen the case of SACU’s request fo r additional flexibilities in NAMA, in the context 
of the DDA negotiations. Brazil has always favored a deal that will be able to accommodate SACU’s 
concerns. Also within the context of the Round, le t me also seize this opportunity to thank South 
Africa and Lesotho for their efficient work as Coordinators of the NAMA-11 and the African Group, 
respectively.  
69. Another conclusion we can draw from this TPR is  the fundamental role of Aid for Trade for 
SACU members. In some of the countries under review , we realize that their needs have already been 
carefully assessed. We hope developed countries will be sensitive to them. Notwithstanding the constraints which stem for its own position as a devel oping country, Brazil would also like to reiterate 
its willingness to deepen cooperation with SACU me mbers, in areas in which transfer technology 
could be helpful, such as for biofuel production. 
SWITZERLAND 
70. In my statement I will focus on two main issues:  (i) the bilateral econom ic relations between 
the SACU States and Switzerland, and (ii) the economic performance of the SACU States. WT/TPR/M/222 
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  Bilateral economic relations between Switzerland and SACU 
71. Switzerland’s bilateral economic relations w ith the SACU’s member States are very 
heterogeneous: In 2008, the total trade volum e between SACU and Switzerland amounted to 
approximately 1.43 billion Swiss francs while the to tal volume of our trade with South Africa, 
accounted for over 99% of this amount. South Afri ca is traditionally our most important trading 
partner on the African continent. 
72. For years, the Swiss trade balance with South A frica has been negative. However, for the first 
time last year, at least since 2000, we exported more  to South Africa than we imported. Furthermore, 
the Free Trade Agreement between the EFTA and SA CU States entered into force in 2008 and has 
deepened our trade relationship with all SACU-member States. 
73. With regard to Swiss direct investments in th e SACU member States, the total stock of Swiss 
Foreign Direct Investments (FDI) in SACU’s memb er States amounted to approximately 7.46 billion 
Swiss francs at the end of 2007; and the lion's share of it lied in South Africa. Switzerland is the fifth 
most important foreign investor in South Africa. More than 100 Swiss companies provide over 35,000 
jobs and play a significant role in several sectors, esp ecially in the industrial sector and in the area of 
services. 
74. Considering South Africa’s growth potential, its  hub function for the Southern African region 
and its increasing importance for Swiss exports, th e Swiss government adopted at the end of 2007 a 
foreign economic strategy for South Africa aiming at further strengthening our trade and investment 
relations. Its main components are:  first, the further dismantling of trade and non-trade barriers, 
beyond the Free Trade Agreement between EFTA and th e SACU States; and secondly, an intensified 
dialogue with South Africa in the frame of the WT O. The dialogue includes a more liberal access to 
the South African financial market for forei gn banks and insurance companies, and a close 
cooperation in the area of patent law and trade mark protection.  
The economy of the SACU States  
75. The international financial crisis and the gl obal economic recession have also affected all 
SACU member States. Nevertheless, South Afri ca’s solid economic and financial policy were 
rewarded i.e. with important FDI inflows. A ccording to the World Investment Report 2009 of 
UNCTAD, South Africa’s foreign direct investment  inflows increased by 58% to US$ 9 billion in 
2008, despite opposite global trends. This is a clear sign, that foreign investors continue to trust the 
South African economy. Nevertheless, there remains a need to vigorously pursue domestic reforms in 
order to increase economic efficiency. South Africa’s rank with regard to “the ease of doing business” 
has deteriorated this year by two positi ons according to the World Bank/IFC.  
76. The role of South Africa for the economy of the other SACU Member States is crucial. South 
Africa is the main importer of goods produced by th e other SACU countries and their main supplier of 
goods and services. Therefore, the healthier th e South African economy is, the better will the 
economies of the other SACU Member States perform. 
CANADA 
77. Prior to the last trade policy review of the Southern African Customs Union in 2003, your 
respective governments concluded the 2002 SACU Ag reement, which reformed the oldest customs 
union in the world.  This renewed union has been ce lebrating its fifth annive rsary of implementation 
since last July.  Consequently, Canada wishes to congratulate the members on having responded to the challenges of a stronger, fairer and more integr ated partnership, characterized by more solid 
management and greater liberalization of trade a nd investment.  While SACU has reaffirmed your  WT/TPR/M/222 
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  commitments within the WTO, you have also cons olidated your commercial and economic links with 
a number of third parties, including the Eur opean Free Trade Association, MERCOSUR and the 
United States.  We wish the member States conti nued success in integrating into the world economy 
through increased trade and investment. 
78. Since the last review, trade relations between SACU and Ca nada have expanded 
considerably, proving that greater integration and stronger ties with other countries can develop side 
by side with increased trade with Canada.  In US dollar terms, Canada's expor ts to SACU have tripled 
since the last review, while Canadian imports incr eased by 87 per cent, at least up until the onset of 
the global economic crisis. 
79. Canada attaches great importance to its trade links  with the Southern African Customs Union.  
In 2008, bilateral trade in goods amounted to US $2 billion (CAN$2.1 billion).  Canada's trade 
relations with SACU are characterized by sustaine d trade in inorganic chemicals;  machinery and 
equipment;  precious stones and metal;  sulphur, salts  and minerals;  and vehicles and vehicle parts. 
80. I would now like to comment on each of the SACU member states: 
Botswana 
81. We commend Botswana for its prudent fiscal management and impressive economic growth, 
and on its ability to diversify away from the mining sector, even during a period when mining 
activities worldwide were on the upswing.  We al so commend Botswana for setting up a commodity 
exchange which will offer multi-asset class trading in commodities, currencies and bonds under the 
regulatory framework of the Non-Bank Financial In stitutions Regulatory Authority (NBFIRA).  The 
concept of an Innovation Hub in Gaborone is a nother initiative to note that will see the region 
accessing much needed technologies.  Canada is proud to have contributed to the creation of 
Botswana’s National Informati on, Communication Technologies ICT Policy, Maitlamo.  These 
initiatives fit well in the country’s diversifica tion programme and it will encourage cross border 
integration programmes and benefit members of SACU and the rest of the region. 
Lesotho 
82. We compliment Lesotho on its efforts to develop a strategy that will improve policy 
coordination in trade, investment, economic devel opment, and poverty alleviation, undertaken in 
cooperation with international partne rs.  We are pleased to note that this strategy is funded by the 
Integrated Framework for Trade-Related Technical Assistance for which Canada is a key donor.  Like 
other SACU members, Lesotho is eligible for non-re ciprocal preferential treatment under a number of 
bilateral initiatives, including Canada’s Market Access Initiative for Least Developed Countries.  
Canada continues to import knit and woven appare l from Lesotho, and Lucara Diamons is active in 
your country. 
Namibia 
83. We commend Namibia for creating a welcoming e nvironment for foreign direct investment.  
We note that within the Sub-saharan region, South Africa, Botswana, and Namibia rank 2nd, 3rd, and 
4th, for ease of doing business, according to the Worl d Bank’s current Doing Business report.  Imports 
into Canada from Namibia have increased seven -fold (in USD terms and 6.0 times over in CAD 
terms) since the 2003 Review of SACU, almost entirely due to increased shipments of uranium. WT/TPR/M/222 
Page 16  
 
  South Africa 
84. South Africa has made major strides in im proving its macroeconomic performance, with 
robust growth for much of the period under review.  It has reduced unemployment from some 29% to 
the present 24.5%, while increasing goods and services trade. 
85. Since the 2003 Review of SACU, South Africa’ s trade and industrial development policy has 
aimed at achieving the following strategic objectives:   sustaining economic growth;  contributing to 
the international competitiveness of manufacturing i ndustries;  promoting small, micro, and medium-
sized enterprises;  promoting economic empowerment of previously disadvantaged persons;  reducing 
inequality and poverty;  promoting organizational effi ciency;  and contributing to the development of 
the SADC region and Africa as a whole. 
86. There are 26 Canadian mining and mining explor ation companies with either operations or 
offices in South Africa, illustrating a strong investment relationship. 
Swaziland 
87. We are pleased to know about Swaziland’s effo rts to improve policy coordination at the 
national level by addressing human capacity constrai nts in the areas of negotiation skills, technical 
analysis, and policy formulation.  As such, Sw aziland has responded to a concern which Canada 
raised in the last Review of SACU. 
Conclusion 
88. In its Summary Observations, the Secretariat st ated that all SACU countries face common 
economic and social challenges such as eradica ting poverty, combating HIV/AIDS, and promoting 
employment and income equality.  For us, these challenges only underscore the importance of 
progress and ambition in the current round of trade nego tiations in order that we can make trade a real 
engine for growth and poverty reduction.  In this  respect, Canada looks forward to working with the 
SACU member states in the WTO and other for a,  such as the Commonwealth, as we seek to advance 
economic and social development. 
EUROPEAN COMMUNITIES 
89. We've got a lot of ground to cover in the two days of discussion as in a number of regards we 
are still reviewing five separate trade regimes. Neve rtheless, it is important to highlight a few points 
of bilateral background, before making our comments and questions. 
90. The EC is the largest trading partner of SACU, as well as the leading foreign investor in the 
region. Over a third of combined SACU exports of  goods are sold in our market. A similar share of 
goods imported into SACU originates in the EC.   
91. All SACU members have enjoyed preferential access  to the EC albeit - consistent with their 
disparate levels of economic deve lopment and economic structures – under different arrangements.  In 
order to ensure a more stable WTO-consistent frame work for our trade, and one that is at the same 
time more directly supportive of ongoing regional integrati on and more effective in  terms of attracting 
investment and facilitating diversified exports, we  have launched negotiati ons on a region-to-region 
Economic Partnership Agreement. Its main novel character istic is that this is to be a reciprocal but 
asymmetric agreement between the parties, with a different treatment between the more advanced 
South Africa and the rest of SACU.    WT/TPR/M/222 
 Page 17 
 
 
  92. I am pleased to say that an interim EPA covering goods, but also including provisions on 
SPS, TBT, trade facilitation, rules of origin, and a specific chapter on development cooperation, has 
already been signed by three SACU members - Botswana, Lesotho and Swaziland. With these 
countries we are now moving forward towards a full EPA that will further include services, investment and trade-related rules Our hope is that Namibia will also decide in favour of completing 
signature of this interim EPA and that negotiations  can proceed towards a single final agreement for 
the entire SADC EPA region and with a complete SA CU as the natural building block. It would offer 
the best prospect for delivering on the common obj ective of economic development based on parallel 
regional and global integration. 
93. The reports prepared for this review highlight the need for more Trade-Related Assistance. In 
relation to the EPA, the EC has been making ava ilable increased AfT at the national and regional 
levels, based on a demand-driven approach. In this context, I would also like to recall that the 10
th 
European Development Fund (EDF) was made considerab ly larger than the 9th, and that the Regional 
and National Indicative Programmes (RIPs and NIPs) have been especially directed at making trade, as an essential instrumental of development, work for Africa.  
94. Turning now to our comments for today, I will not try to be exhaustive as we have submitted 
a number of written questions in advance. Here I wo uld like to focus on those points that refer to the 
common regime or apply similarly to the na tional situations in all SACU members.  
95. Trade has traditionally been and remains a vita l factor in economic development and poverty 
alleviation for all SACU countries. Yet, busin esses importing from or exporting to their markets 
generally face unnecessarily cumbersome procedures and high transaction costs. SACU members 
occupy positions in the low end of World Bank’s ra nking in terms of ease of cross-border trading. 
Trade facilitation could therefore be another area of high return on reform. We encourage SACU 
members to give it more focus and to take full a dvantage of the opportunities offered by the relevant 
Doha round negotiations in this regard. 
96. With respect to customs union matters, we look forward to this TPR as an occasion when 
WTO membership can be updated on the state of play in SACU in terms of policy harmonization and 
institution-building. Being a customs union ourselves,  we not only subscribe to the potential of 
regional economic integration but also appreciate the challenges involved, the commitment and the 
laborious effort required to advance it.  
97. We have the following questions in partic ular. Could the SACU members confirm that 
customs controls currently remain in place on their internal borders, as stated in the report of the 
Secretariat? If so, we would be interested to unde rstand more precisely their continuous function and 
how economic operators can c ope with border checks, documents and formalities.  
98. As SACU members have maintained individual agreements with third countries preferential 
rates have never been fully harmonized. Can SACU  members confirm that in terms of the applied 
MFN rate and any other duties charged on imports  the CET covers all lines with no national 
exceptions? 
99. The 2002 SACU Agreement provided for a major st ep forward in the consolidation of the 
customs union, including bringing a number of new areas under the common regime. We would be interested to know how far has implementation of the agreement progressed so far and within what 
timeframes are SACU members aiming to complete alignment with regard to customs procedures, 
technical standards and regulation, SPS measures, trade defense and competition. How advanced are 
SACU members in the establishment of a services and investment protocol? WT/TPR/M/222 
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  100. A set of new common institutions for the customs union has also been established by this act, 
some of which are not yet operational, notably the Tariff Board. In the absence of a common body to 
make recommendations on tariff changes, how does th e current system where the CET is set by South 
Africa ensures that the interests of  all members are nevertheless c onsistently taken into account? How 
are modifications of the revenue-sharing formula de cided so as to limit negative impacts on the small 
SACU members' whose budgets dependent heavily on this revenue? Finally, transparency on trade 
regime and policies is a key obligation for all WT O Members. Again the background of an evolving 
customs union, it is particularly important that SACU countries keep the WTO membership regularly 
informed. 
101. In conclusion, I would like to reassure our SA CU partners of the good faith with which the 
EC is engaging in our bilateral re lations and of our willingness to assist them in their ambitions such 
as deepening their integration within SACU and beyond. In parallel, we are keen to work with them in 
this house on strengthening the rule-based multilateral trading system. 
UNITED STATES 
102. I would like to begin by acknowledging that SA CU – which is believed to be the oldest 
customs union in the world – has made great strides since its last TPR in 2003.  As noted in the 
Secretariat’s report, economic growth across SACU  since 2003 has averaged about four percent.  
SACU has also advanced the process of integrati ng member economies, aided in part by the 2002 
SACU agreement.  While many aspects of that agreem ent have yet to be full y implemented – which is 
the focus of some of the questions that my g overnment has submitted – there has been noteworthy 
progress in various areas.  For example, as a group,  SACU countries have together undertaken several 
free trade and preferential trade negotiations over the last six years, reflecting their shared objectives 
and common purpose.  SACU has also generally lo wered and simplified its applied tariffs and has 
seen its participation in internati onal trade increase significantly.  As the Secretariat report notes, the 
simple average rate of SACU's applied MFN common  external tariff decreased from 11.4% in 2002 to 
8.1% in 2009 and 96.8% of all tariff lines now ca rry ad valorem rates, up from 75% in 2002.  Intra-
SACU trade has also increased, reflecting the deepening economic integration among the SACU 
members.   
103. At the same time, we recognize that the SACU  countries continue to face serious challenges 
that have kept them from achieving their full ec onomic potential.  Most notably, each of these 
countries continues to struggle with the impact of HIV/AIDS, which has taken a particularly heavy human, social, and economic toll in the SACU region.  The SACU governments are investing 
substantial resources to address HIV/AIDS and other health issues and the U.S. government is pleased 
to support these efforts through the President’s Emerge ncy Plan for AIDS Relief and other programs.   
104. We also acknowledge that the SACU countries,  like many other countries across the world, 
have felt the impact of the global economic crisis , which has resulted in a sharp decline in their 
exports this year.  We urge the SACU countries to  consider ways to use trade to help pull their 
economies out of the crisis, and not to resort to  trade-restricting or trade-prohibiting measures. 
105. The United States is pleased to have a vibrant trade and investment relationship with each of 
the SACU countries.  Overall, two-way US-SACU tr ade in goods more than doubled between 2003 
and 2008, reaching almost $18 billion.  All five SACU members are beneficiaries of the African 
Growth and Opportunity Act (AGOA), and each has exported a variety of products to the United 
States under AGOA and GSP.  South Africa is th e largest exporter of non-energy products under 
AGOA, sending a broad array of goods to the United States duty-free under AGOA and GSP, 
including motor vehicles, metals and minerals, a pparel, citrus fruit, wine, chemicals, nuts, and 
jewelry.  Lesotho has long been the largest e xporter of apparel to the United States under AGOA.  
Swaziland exports apparel, sugar, and prepared food products under AGOA and GSP.  Botswana  WT/TPR/M/222 
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  exports apparel under AGOA; and Na mibia exports worked marble and granite as well as wood 
products under GSP.  All told, over 97 percent of SACU exports to the United States in 2008 entered 
our market duty-free. 
106. I would also like to draw attention to certa in errors in the description of AGOA in the 
Secretariat’s report.  Specifically, the Secretariat’s report (paragraph 59 on page 13) states that 
AGOA’s “special dispensation relating to apparel was extended to 2007, but has since expired.”  In 
fact, the Africa Investment In centive Act of 2006 extended this provision - AGOA’s special third-
country fabric provision - to September 30, 2012.  Also, the report states in the same paragraph that 
37 sub-Saharan African countries are eligible for AGOA trade benefits.  The actual number, as of 
today, is 40.  We trust that the Secretariat will amend its report accordingly when the report is 
undergoing final scrutiny and before it is released to the public. 
107. From 2004 to 2008, the United States provided $13 5 million in trade capacity building (TCB) 
assistance to SACU governments and businesses to help them make the most of global trade opportunities, including those under AGOA.  Trade -related assistance under Lesotho’s Millennium 
Challenge Corporation (MCC) compact accounts fo r nearly $100 million of this amount.  Namibia 
signed an MCC compact in July 2008; and tr ade capacity building assistance will constitute a 
substantial portion of its five-year, $304.5 milli on compact.  Other U.S.-funded TCB activities for 
SACU countries include programs to assist histor ically disadvantaged small and medium-size 
enterprises in South Africa, technical assistan ce related to SPS issues and financial sector 
development in Botswana and Namibia, and a wide  range of technical assistance, including export 
diversification and promotion programs, carried out by the USAID-funded Southern African Trade 
Hub in Botswana. 
108. In July 2008, the United States and the five member countries of SACU signed a Trade, 
Investment, and Development Cooperative Agreemen t (TIDCA).  The TIDCA establishes a forum for 
consultative discussions, cooperative work, and possibl e agreements on a wide range of trade issues, 
with a special focus on customs and trade facilita tion, technical barriers to trade, sanitary and 
phytosanitary measures, and trade and investment promotion.  Work is now under way to identify 
specific activities and possible agreements under the TIDCA, guided in part by direction provided 
when Ambassador Kirk and the trade ministers of the SACU countries met at the AGOA Forum in Nairobi in August of this year. 
109. The United States has submitted some questions about policies and processes at both the 
SACU-wide level and in individual SACU countries, and I would like to thank the Members of SACU 
for providing responses, which we will study carefully .  Our questions, a few of which I would like to 
highlight today, touch on issues such as import licen sing, technical barriers to trade, SPS, intellectual 
property rights, state-owned enterprises, ta riffs, and export subsidies.  Specifically: 
110. We call attention to the Secretariat’s report that cites a number of cases in which SACU 
member countries have apparently failed to notify th e WTO of certain measures relating to such areas 
as agriculture, rules of origin, import licensing, indu strial subsidies, and TBT.  In the secretariat’s 
words, “Numerous notifications remain outstandi ng.” The report also notes that SACU members 
exceed bound rates in several tariff lines and that th e use of formula duties based on reference prices 
“does not ensure conformity with the provisions of the WTO Customs Valuation Agreement.”  We 
would like to hear what steps are being take n to address these apparent variances from core WTO 
commitments. 
111. With respect to South Africa, I would li ke to draw attention to four areas: 
112. First, according to the Secretariat’s report, So uth Africa bases its animal health requirements 
on OIE guidelines and on risk assessments.  Unfortunate ly, that has not been our experience, although WT/TPR/M/222 
Page 20  
 
  the United States acknowledges South Africa’s recent movement to bring import requirements in line 
with OIE guidelines.  But, the pr ocess that South Africa intends to follow to allow for market access 
remains unclear.  We look forward to South Africa’s clarification in this regard.   
113. Second, the Secretariat report states that South Africa’s Black Economic Empowerment 
(BEE) Codes of Good Practice “a llow global and multinational comp anies some flexibility in how 
they structure their empowerment deals.”  While the United States generally supports the objectives of 
South Africa’s BEE policies, which are intende d to promote the economic empowerment of the 
historically disadvantaged population in South Africa, some U.S. companies have expressed concern about how South Africa has implemented its BEE polic ies.  They assert that the process for approving 
“equity equivalent” plans has been slow and non-transparent.  We would like to know how the South 
African Department of Trade and Indu stry plans to address these concerns.  
114. Third, we have posed several questions related to regulation of South Africa’s 
telecommunications sector.  We are especially inte rested in learning what specific steps South 
Africa’s Department of Communications has taken si nce the last TPR to strengthen the Independent 
Communications Authority of South Africa (ICASA). 
115. Fourth, the Secretariat notes that South Africa c ontinues to be one of the major users of anti-
dumping measures in the WTO.  The United States ’ experience with South Africa’s measures bears 
out the Secretariat’s statement.  South Africa currently maintains anti-dumping duties on four U.S. products, including chicken meat. We are disappointed  that the South African government has chosen 
to leave in place anti-dumping measures on these pr oducts despite a September 2007 South African 
Supreme Court of Appeal ruling that would appear to invalidate the basis for the continuation of the 
antidumping measure.  We would be interested in  learning more about the implementation of the 
Supreme Court of Appeal ruling, especially with r espect to the antidumping measures against the U.S. 
products. 
116. Finally, with respect to SACU writ large, we are interested in hearing how plans for wider 
regional economic integration in Africa might affect  SACU’s future, including plans for a customs 
union encompassing the Southern African Developm ent Community (SADC) and the planned merger 
of the free trade areas of SADC, the East Afri can Community, and the Common Market for Eastern 
and Southern Africa. 
117. The Doha Round will set the terms of trade fo r decades to come.  The United States remains 
committed to achieving a balanced and ambitious co mpletion of the Round as soon as possible.  But 
we cannot accomplish this alone.  We are convin ced that the creation of new trade flows and 
meaningful market openings is required to accomplish trade-generated economic growth and 
development.  We look forward to working w ith SACU countries to achieve this outcome. 
SINGAPORE 
118. Singapore’s economic relationship with SACU has been progressing well over the last ten 
years.  From 1998 to 2008, Singapore’s bilateral tr ade with SACU grew by a significant Compounded 
Annual Growth Rate (CAGR) of 10.3%.  SACU is our 38
th largest trading partner, and our bilateral 
trade with SACU last year amounted to US$1.54 billion.  In particular, South Africa, besides being Singapore’s largest trading partner in Africa, is al so beginning to attract an increasing number of 
Singaporean investments, in areas as varied as chemicals, consumer goods, and consultancy services.  Singapore’s trade with Botswana, Lesotho, Namibia and Swaziland combined, amounted to 
US$41 million in 2008. 
119. While not immediately obvious, there are in fact, several commonalities between Singapore 
and SACU, in that we are both highly dependent on fo reign trade for growth and are both gateways in  WT/TPR/M/222 
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  our respective regions.  It is important for countries like us to develop our economic policies in such a 
way that allows us to best benefit from these unique characteristics.  Our similar outlooks on the 
importance of multilateral trade liberalisation and mark et diversification, is an example of this, and 
continuing this direction is essentia l to our economic development. 
120. In this regard, we are glad to note the re duction in SACU’s applied MFN Common External 
Tariff rate since 2001, to the 8.1% rate that it is t oday.  We are also pleased that SACU has simplified 
its tariff structure to carry more ad valorem  rates, and has reduced the number of tariff lines with 
mixed duties.  We see these as positive steps that will help in increasing SACU’s long-term global competitiveness. 
121. Services is another area of great potential, which can be tapped into to play a significant role 
in the diversification of the SACU economies.  As  mentioned in the Secretariat’s report, further 
liberalisation and investment in services should ge nerally improve the efficiency of other economic 
activities and the competitiveness of SACU’s exports.  It would be good to see this element included in the development plans and economic strategies of the SACU Members.  On this note, it is 
heartening that the SACU Members are engaged in  robust national developm ent programmes, and we 
encourage plans that keep SACU  Members’s markets open and accessi ble so that economic activity 
and growth are continually enhanced in the region. 
AUSTRALIA 
122. Australia’s economic and trade re lations with the southern African countries that comprise 
SACU – Botswana, Lesotho, Swaziland, Namibia an d South Africa - continue to grow solidly.  
123. In line with the Australian Government’s co mmitment to enhance its relations with the 
countries and regional institutions of Africa, we aspire  to build on the solid trading relationships we 
share with SACU countries through strong support for Australian business on the ground in Africa. 
124. Amongst SACU members (and more broadly in A frica), South Africa is clearly an important 
trading partner for Australia.  In 2008-2009, two- way merchandise trade was valued at $3.3 billion. 
Australian exports to South Africa were $2.06 billion (mainly coal, medicaments, meat, and 
specialised machinery and parts) and Australia n imports from South Africa were $1.23 billion, 
notably passenger motor vehicles (mainly BMW Series 3 vehicles) worth $480 million, as well as pig iron, manganese ores and concentrates and vehicle parts and accessories. While our trading relationship was affected by the economic downtur n in 2008, we still have a strong foundation for 
future growth, which we look forward to realis ing, including during the 2010 FIFA World Cup. 
125. Australia’s two-way merchandise trade with the other SACU members amounted to nearly 90 
million in 2008-09, primarily in food, machinery, vehicle parts and medicaments. While the economic 
downturn has affected trade worldwide, includi ng with our SACU counterparts, our trading 
relationships with Botswana, Namibi a and Swaziland have all grown by  almost eight per cent in the 
past twelve months and we look forward to furt her developing these tradi ng relationships in the 
future.  
126. Two-way investment flows between Australia a nd southern Africa have expanded in recent 
years, particularly in the resources sectors of SACU countries.  Australia’s investment relationship with South Africa is important – in 2008, Australian investment in South Africa reached A$1.17 billion. Apart from mining, agriculture, in frastructure and the services sector are also 
attracting Australian investment in southern Africa.  South Africa dominates African investment into 
Australia and is worth over A$1.5 billion.  While investment flows between Australia and the other 
SACU members are not yet significant, we look forward to future growth in this area. In particular, WT/TPR/M/222 
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  people-to-people links between our countries will increase this investment over coming years. 
Currently, nearly 9000 African students atte nd Australian schools, colleges and universities. 
127. Australia notes the WTO Secretariat Report fi nding that export opportunities in services 
remain largely untapped by the SACU (with the exception of South Africa).  As an enabler of 
comparative advantage in both manufacturing and agriculture, Australia encourages further 
liberalisation and investment by the SACU in  the services sector.  This would improve the 
competitiveness of its exports, specifically by reduc ing costs for telecommunications, transport, and 
energy services. 
128. While South Africa is Australia’s largest mark et in the SACU, we recognise the different 
stages of economic development and diverse needs of the SACU Members.  We encourage the SACU 
to accelerate structural reforms and harmonisation of its Members’ policies to improve their 
economies’ productivity and competitiveness.  Australia welcomes South Africa’s leadership role in promoting trade liberalisation as the most develope d SACU Member. Australia also values the role 
played by South Africa in engaging with its Afri can counterparts in developing a common agenda for 
the G20.   
129. Australia shares SACU’s view that some Members face additional hurdles in taking 
advantage of the opportunities offered by the mu ltilateral trading system, and is committed to 
assisting all WTO members to participate effectively in the multilateral trading system. In this regard, 
in 2008-09, Australia more than doubled our cont ribution to the WTO for development assistance 
activities and are committed to multilateralism and de veloping country particip ation in international 
trade. Australia has also provided duty and quot a free access for all products from all Least Developed 
Countries (LDCs), including Lesotho, since 2003. We urge other WTO Members to offer 
comprehensive and unqualified duty and quota free access to LDCs.  
130. Australia attaches importance to our cooperati on with SACU members in the WTO and the 
Doha Round and welcomes the commitment of SA CU members to economic reform and continued 
trade and investment liberalization. Australia shar es SACU's interests in securing a comprehensive 
conclusion to the Doha Round that yields real a nd substantial agricultural reform and reduces trade 
distortions that discriminate against efficient agricu ltural producers. In this regard, Australia values 
South Africa’s constructive role in promoting the importance of trade liberalisation and strong 
advocacy for agricultural trade reform, including as a member of the Cairns Group. Likewise, we 
acknowledge South Africa’s leadership of the NAMA- 11 grouping, but look forward to substantial 
efforts to improve market access for industrial prod ucts, bearing in mind the development dimension 
of the Round. 
131. We look forward to working with the SACU, and other Members, to reach ambitious and 
balanced outcomes to the Doha Round - outcomes th at strongly assist developing countries actively 
and effectively integrate into the global economy.  
CHILE 
132. This review, like all those carried out this year, is taking place against the backdrop of the 
global economic crisis which struck last year.  Th is crisis has undoubtedly had a negative impact on 
the SACU countries, which have worked to overcom e these problems.  Despite these difficulties, and 
the challenges posed by the HIV/AIDS pandemic in  the SACU countries, the reports show positive 
economic results for the period under review. 
133. The Secretariat report also points to a positiv e trend in SACU trade policies which we 
welcome in the context of unilateral trade liberali zation by SACU.  On the one hand, applied tariff  WT/TPR/M/222 
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  rates were reduced during the period under review , and on the other, the tariff structure was 
streamlined, leading nearly all tariffs to be expressed in ad valorem  terms. 
134. We also wish to emphasize the continued impr ovement in the instruments and institutions of 
the customs union, following the entry into force of  the new agreement in July 2004.  This shows the 
countries' commitment to deepening trade integration. 
135. Another development which we view positively is the priority given by SACU to trade 
facilitation initiatives, particularly investments in ph ysical infrastructure.  These effectively promote 
economic and commercial activity, and have become  important tools for improving the countries' 
quality of life. 
136. Our delegation wishes to express its agreement with the importance attached by 
SACU members to the multilateral trading system head ed by the WTO.  This is reflected not only in 
the reports before us, but also in thei r ongoing activities in this Organization. 
137. In relation to the Doha Round, we have the sa me positions in many areas, particularly in 
respect of agriculture.  In this connection, we not e the active participation of the representatives of 
South Africa and Lesotho, Faizel Ismail and Anthony Maruping, respectively. 
138. We urge SACU to continue working to improve the trade institutions it has established and to 
continue attracting new investment that will enab le it to achieve the objective of diversifying its 
economic activities, for the benefit of its member countries. 
139. Chile has put a number of questions to SACU  regarding trade facilitation, tariffs and 
agriculture.  We hope to receive replies at the end of this review. 
140. In conclusion, I would point out that not only trade, but also sport contributes to the aim of 
bringing counties together.  One of the members of SACU will be hosting the next football world 
championship in 2010.  South Africa has already been preparing for this important event, and we wish 
it much success.  Chile will also be participating, partly as a result of our openness with respect to 
services under Mode 4, Movement of natural persons. 
SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU  
141. SACU is an important trade part ner of ours and we wa tch its development with a great deal of 
interest. It is encouraging to see that new SA CU directives since 2004 have provided for further 
harmonization of policies in such areas as customs pr ocedures, standards, technical regulations, SPS 
measures, competition, and unfair trade practices.  
142. It appears that the relative structure of econom ic activities within the SACU geographical area 
has not changed much since its last Trade Policy Re view in 2003, with member States continuing to 
exhibit significant differences in their levels of economic development. For example, South Africa, 
has comparatively well-developed transportati on and telecommunications networks. And South 
Africa’s economy is relatively diversified while othe r SACU members remain highly dependent on a 
very limited number of products. In this regard, we would be interested to know how SACU plans to 
improve the region’s infrastructure as a whol e, especially for the purpose of giving the less-
advantaged countries more opportunity to fully in tegrate and share in sustained economic growth.  
143. In addition, we have noted, that South A frica continues to set the applied MFN Common 
External Tariff (CET) in consultation with its SACU  partners. In some cases, though, it seems that the 
structure of the CET does not adequately reflect eith er the needs of the individual economies or those 
of other SACU members. Tariff bindings by all SACU members are at ad valorem  rates. The WT/TPR/M/222 
Page 24  
 
  imposition of non- ad valorem  rates on some tariff lines create s a risk of non-compliance by SACU 
members with their own individual tariff bindings,  and the use of formula duties based on reference 
prices does not ensure conformity with the obligations under the WTO Agreement on Customs Valuation. This raises the question of how  the SACU-member govern ments coordinate the 
implementation of these duties both within and outside SACU, and at the same time ensure 
compliance. 
144. Having said that we would like to specially not e and share the view of several previous 
speakers the active participation and contributio ns of SACU members states in the WTO work 
particularly in the Doha Round Negotiations. In the written questions we submitted in advance we 
identified a few aspects of certain SACU countries’ trad e policies that are of particular interest to us. 
The question topics included South Africa’s 2009 priva tization plan and whether there are likely to be 
limits on foreign investment in the previously State-Owned Enterprises. Another was on certain 
aspects of Botswana’s government procurement policy.  
REPUBLIC OF KOREA 
General assessment of SACU’s Achievements since 2003 
145. Collectively, during the period under examinati on the SACU states expanded at an average 
annual rate of roughly 4%, and in the process furt her increased the use of trade as a vehicle for 
progress:  the numbers state that the ratio of aggr egate trade in goods and services as a percentage of 
GDP increased steadily from 56.5% in 2002 to 66.6%  in 2007.  While the positive balance in trade 
has given way to a deficit during this period, we not e that this outcome was partly due to increased 
demand for machinery products by the part of South Africa.  Given that capital investments are 
essential, necessary, and a pre-requisite for furthe r economic growth, we are certain that these 
investments will “pay off” by assisting SACU states to accrue even greater prosperity in the future. 
146. With regard to SACU’s trade with the world, we note that the lion’s share of SACU’s trade 
has traditionally been conducted with the EC and the US under the preference programs provided by 
these two countries. 
Korea-SACU Bilateral Relations/FTA 
147. However, we also note that in recent year s SACU’s trade with Asian countries including 
Korea is on the rise, and we welcome this new trend.  We have always held the view that there was much room for greater South-South cooperation between the two regions, and clearly the recent figures validate this view.  As such, we woul d like to propose to capitalize on this new found 
momemtum by engaging in further intensive discussions  with a view to establishing a new, mutually 
beneficial trading regime linking the two regions.  In this context, we welcome the understandings 
achieved during the fourth Korea-South Africa Policy Dialogue, and hope that it will form the basis 
for future progress in this area. 
Points for Further Consideration 
148. While reviewing the progress achieved by the SACU states during the period under review, 
my delegation noted some areas in which further considerations for furthe r improvement might be 
necessary.  I would like to take this opportunity to point out a few items for consideration by my 
SACU colleagues. 
149. We note that the inflow of FDI into SACU remains low vis-à-vis  the global standard, and is 
concentrated in a number of sectors such as mining, clothing, and a couple of services.  Given that 
FDI is an important source for sustained economic  growth, I believe the membership might benefit  WT/TPR/M/222 
 Page 25 
 
 
  from learning what specific measures are on the drawing board, either individually or as SACU as a 
whole, to attract more FDI into the SACU region. 
150. Also, through the Secretariat report as well as various other sources, my delegation notes the 
challenges SACU members face in their fight against the HIV/AIDS pandemic, and the overall high unemployment against the backdrop of insuffici ent educational and economic infrastructure.  
Recalling that a healthy and well-educated labor fo rce is indispensable and imperative for greater 
economic growth, it is clear there is a need for great er government spending in this area.  However, at 
the same time it is also clear that greater government  spending generally yields results in the long-run, 
while increased government expenditure could de-s tabilize the government’s balances in the short-
run/near future.  Faced with such difficult choices, how are choices being made by the SACU states?  
It will be worthwhile to discuss this issue during the second session on Friday. 
Concluding Remarks 
151. I would like to inform SACU that some additiona l questions have been received from capital, 
and will be delivered electronically through the Secret ariat after this meeting.  We hope preliminary 
answers on to them could be provided during the second day. 
HONG KONG, CHINA General 
152. Hong Kong, China enjoys cordial trade rela tions with SACU members.  Our total 
merchandise trade amounted to US$1.5 billion in 2008,  and amidst the financial crisis, imports from 
SACU members to Hong Kong have been growing this  year.  We look forward to further growth in 
our bilateral trade with all SACU members in future.  
Tariffs and other Charges 
153. Regarding trade in goods, we are glad to see that SACU has reduced its Common External 
Tariff (CET) and lowered its average tariff rate  from 11.4% in 2002 to 8.1% in 2009.  We would 
encourage SACU to continue its efforts in bringi ng down the CET, especially on agricultural products, 
to further enhance trading opportunities. 
154. On the other hand, we note that the overall tariff  structure remains rather complex due to the 
existence of ad valorem  duties, as well as non- ad valorem  duties that come in different forms.  As 
pointed out in the Secretariat Report, the use of non- ad valorem  rates on some tariff lines also creates 
a risk of non-compliance by SACU members with individual tariff bindings. The V AT and sales tax 
are not harmonized within SACU and the disparit y of taxes increases the cost of filing customs 
documents.   We therefore encourage SACU to simp lify the tariff structure further and expedite the 
harmonization of taxes to facilitate trade. 
Contingency Trade Remedies 
155. We note that all SACU members must apply anti-dumping (AD), countervailing and 
safeguard measures imposed by South Africa.  Unde r such arrangement, some SACU members have 
to bear the adverse economic consequences of th e extensive AD and safeguard duties imposed by 
South Africa.   The automatic extension of S outh Africa’s AD measures to other SACU members 
without proper investigations may be inconsiste nt with the WTO Anti-dumping Agreement.  We 
would urge SACU to review this practice. WT/TPR/M/222 
Page 26  
 
  Standards and Technical Requirements 
156. We note that South African national standards ar e harmonized with international standards.  
That said, the Secretariat Report notes that South Africa’s regulatory system is somewhat fragmented, with different departments setting technical regulations  for the same or similar products.  In order to 
improve the predictability of its sy stem and facilitate traders’ access to the relevant information, we 
would encourage South Africa to consider improvements in this respect. 
Services 
157. Turning to services, we note that this sector is an important contributor to the economy of 
SACU.  However, the development potential and expor t opportunities of the services sector in most 
SACU members remain largely untapped due to the constraints in infrastructure, finance, knowledge 
and skills, among other things.  In this  regard, we believe that further liberalization of trade in services 
would help SACU members to improve the ef ficiency and competitiveness of their economic 
activities by bringing in knowledge and skills  and lowering costs through competition.   
158. We certainly recognize the challenges involved and the necessary adjustments required when 
undertaking continued liberalization.  In this c onnection, we are pleased to note SACU members’ 
efforts in carrying out regulatory reforms to enhance good governance.  We would like to encourage 
SACU members to keep up their liberalization effort s, in particular in respect of infrastructural 
services such as transport and logistics, financial an d telecommunications services.  In the same vein, 
we would like to encourage SACU members to tabl e their services offers commensurate with their 
respective level of developments as soon as possible. 
159. We note from the Secretariat Report that telecommunications growth in South Africa has been 
hampered by regulatory constraints restricting competition. In particular, the state semi-monopoly on 
fixed-wire services has resulted in high charges and inadequate services for consumers.  We would like to encourage South Africa to consider intr oducing measures to promote competition, which can 
help enhance economic efficiency and protect consumers’ rights. 
JAPAN 
(SACU) 160. The Japanese government welcomes  the moderate annual growth of 4% of the combined 
SACU economies since 2003. According to the S ecretariat’s report, SACU has decreased the 
Common External Tariff (CET) from 11.4% in 2002 to 8.1% in 2009, and also simplified the structure 
of tariffs: Ad valorem rates are employed in 96.8%  of all tariff lines in 2009, compared with the 
corresponding figure of 75% in 2002. These changes are appreciated. Having said that, the Japanese 
Government would welcome further reduction in  relatively high tariff rates on various goods. 
161. We note that SACU still leaves many policy areas to be harmonized. The Secretariat’s report 
points out that these are customs procedures, st andards, technical regulations, SPS measures, 
competition, etc. The full implementation of polic y harmonization envisaged in the SACU agreement 
will benefit not only SACU member countries but also other countries, by facilitating further 
multinational trade and investment. We therefore hope  that SACU will continue to develop common 
policies in line with the SACU agreement.  
(South Africa) 
162. We would also like to touch upon the business e nvironment in South Africa. We have heard 
from companies operating in South Africa of some problems, such as those relating to work  WT/TPR/M/222 
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  permission procedures, and security problems. S outh Africa is a leading economy in SACU, and 
beyond. We hope for further improvements in its busin ess environment, especially as it is seen as a 
model for other countries.  
163. In conclusion, Japan would like to reiterate its  hope that SACU and its member countries will 
continue to promote internal harmonization and lib eralize their economies and trade in order to 
benefit from the multilateral trading system. 
COLOMBIA 
164. It is very difficult to analyse an entire region like the one represented in the Southern African 
Customs Union.  The countries making up the uni on exhibit major discrepancies in their levels of 
economic development, infrastructur e and institutional arrangements. 
165. Although SACU has officially been a custom s union since 2002, with common agricultural 
and industrial policies, progress is still limited.  The only spheres of trade policy that have been 
harmonized in SACU to date are applied customs tariffs;  excise duties;  rebates, refunds and 
drawbacks of customs duties;  customs valuation;  non-preferential rules of origin;  and contingency 
trade remedies. 
166. Since its last trade policy review in 2003, no  major changes have been identified in the 
institutional structure relating to trade policy.  The slight variations in the components of its 
production structure are not significant. 
167. Nevertheless, it is noted that, by virtue of trade agreements and unilateral preferences, 
SACU enjoys preferential access to the markets of  the European Union and the United States of 
America, as well as those of various other develope d and developing countries.  In order to take 
advantage of these preferences as an engine of economic development, it is essential for the 
SACU countries to make use of their customs union to achieve greater trade integration among themselves and with the rest of the world. 
168. South Africa is the biggest economy in SACU, the country with the highest GDP and the 
greatest volume of trade.  Moreover, it sets monetary policy for much of the customs union and establishes the union's common external tariff.  Sout h Africa also accounts for virtually all the trade 
between the customs union and Colombia. 
169. South Africa has made progress in tariff simplif ication and has reduced the average applied 
tariff.  However, the structure of the applied tari ff varied between a higher average rate on agricultural 
products – which is worthy of note - and a lower av erage rate on non-agricultural products.  Also 
noteworthy in this latter category is the averag e tariff on manufactures, which continues to be 
relatively high. 
170. Another noteworthy factor is the continued high le vel of State participation in the markets for 
manufactures, mining and some infrastructure services.  Furthermore, the manufacturing sector benefits from a range of incentive plans, some of which are contingent on export performance. 
171. According to the Secretariat, Botswana is m eeting the challenge of accelerating structural 
reforms with a view to improving economic productivity and competitiveness. 
172. Lesotho is implementing a plan that provides fo r the strengthening of agricultural activity and 
the industrial sector. WT/TPR/M/222 
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  173. Namibia has established a wide range of tax incentives for the manufacturing sector, together 
with import restrictions, in order to prom ote local production of agricultural products. 
174. Swaziland faces the challenge of diversifying its manufacturing sector, which is currently 
heavily dependent on sugar and a numbe r of products obtained from sugar. 
175. South Africa accounts for 99.9 per cent of Colombia's trade with the Southern African 
Customs Union.  It is our biggest trading partner in Africa.  Trade between our two countries showed 
an upward trend between 1999 and 2007.  After that period, however, the value of Colombian exports 
to South Africa fell by 80 per cent in 2008 compared with 2007.  The decline was explained by the collapse in sales of ferronickel and petroleum.  We tr ust that this is due to the effect of the global 
economic and financial crisis, and that the trend in  trade flows will be reversed when the situation 
improves. 
176. In conclusion, permit me to say that the S outhern African Customs Union complements the 
internal policies of its members, enabling them to  strengthen their institutions and their production 
sector in order to improve competitiveness. 
MEXICO 
 
Successes and challenges of the review 
 
177. As is clearly indicated in the report, the five  member States of SACU, despite the differences 
observed in their level of economic developmen t, face common challenges such as unemployment, 
income inequality, poverty and HIV/AIDS.  We ag ree with the assessment that it is necessary to 
improve regional infrastructure in order to promote greater integration and sustained growth as a way 
of remedying these differences in development. 
178. The report notes that, even though the new 2002 Agreement provides for the adoption of 
common policies and strategies with a view to greater harmonization between the members in various fields, the only trade policies that have been harmoni zed to date are those relating to applied customs 
tariffs;  excise duties;  duty rebates, refunds an d drawbacks;  customs valuation;  non-preferential 
rules of origin;  and contingency trade remedies.  We agree with the WTO Secretariat in noting that 
SACU's performance outlook will depend on the effectiveness of ongoing  policy harmonization 
efforts aimed at achieving a more cohesive regional market. 
179. Given SACU's dependence on international trad e, it benefited enormously from the global 
prosperity of previous years.  Similarly, it has been significantly affected by the financial crisis, 
mainly because most of its members have a limite d export base.  Hence the importance of continued 
efforts at diversification with rega rd to the main export products, in order to promote the growth and 
development of its economies.  We hope that th e member governments will take the necessary steps 
to address the shocks of the global economic crisis, including in particular measures to diversify and 
stimulate private sector development, without negl ecting the aim of deepening members' integration. 
180. On the question of tariffs, the report notes that  South Africa continues to set the applied 
MFN Common External Tariff in consultation with the other members.  It also notes that SACU has succeeded in simplifying its tariff structure by increasing the number of tariff lines carrying ad 
valorem  rates to 96.8 per cent of all lines in 2009, and that it reduced its applied MFN average tariff 
from 11.4 per cent in 2002 to 8.1 per cent in 2009.  However, reference is made to a coefficient of 
variation of 1.4, higher than that recorded in th e previous review, which indicates a greater relative 
dispersion of tariff rates.  A reduction in this dispersion could stimulate productivity, boost the 
competitiveness of production in individual sectors and increase regional exports.  WT/TPR/M/222 
 Page 29 
 
 
  181. Regarding the services sector, the report indicates that it plays a crucial role in diversifying 
the SACU economies and makes a major contribu tion to GDP (60.2 per cent).  However, the 
opportunities to promote the development of important  subsectors in most member countries have not 
been turned to account because of limitations in in frastructure, marketing and promotion, finance and 
lack of skilled labour.  Investment in tourism in frastructure is of major significance given South 
Africa's selection as host of the next football world cup.  We wish South Africa the best of luck, 
although Mexico will emerge as world champion.  In view of the foregoing, we agree on the need to 
promote greater liberalization and investment in the services sector in order to improve the efficiency of other economic activities and the competitiveness of the region's exports.  Despite the importance 
of this sector, it should be mentioned that the commitments undertaken are a long way from the 
required binding under the GATS.  As part of the current negotiations, we believe that the 
presentation of an improved offer reflecting autonomous  liberalization would give more certainty to 
the economic operators and have  positive effects on levels of investment and trade. 
Bilateral trade relations 
 182. We do not at present have any bilateral agreem ents with SACU members, but we hope that 
trade will continue through the Doha Round negotiations. 
ECUADOR 
183. The Southern African Customs Union, comprisi ng Botswana, Lesotho, Namibia, South Africa 
and Swaziland, has recorded a combined annual av erage growth rate of 4 per cent since 2003.  
Although this growth has been somewhat irregular in some of the member countries, it is to be hoped 
that its continuity and improvements in infrastruct ure will make it possible to reduce the differences in 
the existing level of development between the five members of SACU. 
184. Regarding the institutional framework, we cannot fail to mention the entry into force in 2004 
of the Agreement on the Southern African Cust oms Union, which seeks to achieve greater 
harmonization of policies in different spheres.  Ne vertheless, it is still necessary to make greater 
efforts at harmonization in this area. 
185. We note from the Secretariat report that, notwithstanding a degree of simplification of the 
SACU tariff structure, some tariff lines continue to be  subject to specific and mixed duties.  Similarly, 
the continued application of non-tariff barriers su ch as quotas, import forecasts, or additional duties 
applied to agricultural imports limit the flow of imports.  We appeal to the members of SACU to 
reconsider the implementation of these trade policy instruments. 
186. Trade between Ecuador and the members of SACU  is still limited.  Accordingly, Ecuador 
recently opened a trade office in South Africa.  We  trust that this will be a first step towards 
strengthening the trade relations between Ecua dor and South Africa, and SACU as a whole. 
INDIA 
187. The Southern African Customs Union (SACU), the world’s oldest live customs union, has 
undergone many transformations.  The last such  transformation through the 2002 SACU Agreement 
has created the platform for the evolution of SA CU into a modern rules-based dispensation with 
common policies and institutions.  This agreemen t now provides the basis for deeper regional 
integration as well as SACU’s engagement with th e global economy.   Please allow me Chair, to 
extend through you, our warmest felicitations in a dvance to SACU on the completion of 100 years of 
this unique partnership next year. WT/TPR/M/222 
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  188. A customs union involving members at different levels of development including a LDC, 
poses many unique challenges in development of ha rmonised policies, physical infrastructure as well 
as a relationship with other trading partners th at balances the interests and capacities of SACU 
members.  Last year when I visited Maseru on the occasion of the LDC Trade Ministers’ meeting, I had occasion to appreciate the immensity of this chal lenge.  The complexity of this challenge cannot 
be over-estimated.  India salutes these efforts whic h provide a new benchmark for regional integration 
among developing countries with a view to facing together, the challenges of globalisation.   
189. Nowhere is this complexity more manifest than in the NAMA negotiations under the Doha 
Round.  The composition of the SACU has many sp ecial features, including the higher commitments 
taken by South Africa in the Uruguay Round and the fact that one of its members is a LDC.  These 
special features make the case for bespoke flexibilities for SACU abundantly clear.  I would like to 
reiterate India’s strong support for such speci al flexibilities for SACU in the NAMA outcome.   
190. Despite their small representation in Geneva, SACU members play an active and visible role 
in the WTO and other international organizations.  Lesotho last year provided a strong leadership to 
the LDC Group. South Africa has been proactive in several areas and coordinates the NAMA-11 
group of developing countries.  Th e positions articulated by SACU members have reinforced the 
solidarity of developing countries in the Doha Round Negotiations.  I would specially like to mention 
with appreciation the role being played by Amb assador Faizel Ismail and Ambassador Maruping. 
191. The Secretariat Report has highlighted several interesting features of the economic 
performance of SACU members.  These include the increased role of trade in their economies, serious 
problems related to physical infrastructure, high le vels of unemployment, and except for South Africa, 
their dependence on a few export products, especial ly commodities.  The ongoing global economic 
crisis has taught us many lessons.  For most de veloping countries, high export dependence, especially 
on unprocessed commodities, has emerged as a problem rather than a solution.  Expansion of trade cannot be a substitute for development of the domes tic economy which can lead  to higher incomes, 
more jobs and greater and more widely dispersed do mestic demand.  This is a more sustainable path 
to economic development.  I am sure SACU me mbers have drawn such lessons already.   
192. India’s relations with member states of SACU as well as SACU itself are historical, warm, 
cooperative and multi-dimensional. Th ey now cover virtually all fields  of human end eavour and enjoy 
regional and international significance.  These relations hips have been strengthened in recent years by 
various high-level visits and a huge expansion in trade.  Despite th e burgeoning relationships, we are 
convinced that there is significant potential yet to be realized.  Sustained efforts to strengthen, deepen 
and diversify our relations w ith SACU countries and SACU are a priority for India.  
193. India’s trade with SACU has gone up by 157% in the last 5 years.  The two-way trade was 
over US$ 6.5 billion last year.  The trade balance remains in favour of SACU, a fact which does not 
cause us any concern.  Along with the expansion of tr ade, there has been substa ntial broadening of the 
trade portfolios, which is something of great satisfaction to us.   
194. India has taken steps to extend lines of credit to  SACU countries to finance trade. EXIM Bank 
of India has extended several lines of credit to E astern and Southern African Trade and Development 
Bank which includes SACU members. We are happy to note that these lines ha ve been fully utilized 
for import of capital equipment, technology, project s and goods and services, on deferred credit terms.  
195. A number of Indian companies are currently executing projects in SACU member states.  
Major areas of Indian investment include autom obiles, IT, metals, hotels, pharmaceuticals, diamond 
processing, etc.   WT/TPR/M/222 
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  196. There is also a growing trend of SACU companies, especially from South Africa, investing in 
India.  The sectors of investment include br eweries, infrastructure, banking, insurance, 
pharmaceuticals, electronics, etc.   
197. With the objective of deepening our economic engagement with SACU, India is negotiating a 
Preferential Trade Agreement with SACU.  We hope th at finalisation of this agreement will provide a 
further boost to our trade and investment.  India is already working with SACU members to help them 
diversify their economies in such areas as agricultu re, textiles, health, tourism, small and medium 
enterprises, and institution building.   Business sectors of India and SACU have been developing their 
partnerships through frequent inter actions.  Earlier this year, we were happy to receive Ms. Moremi, 
Executive Secretary of SACU in the 5th CII India Africa Conclave.  
198. India has strongly supported the objectives of th e New Partnership for Africa’s Development, 
which is headquartered in South Africa.  A sum of US$200 million has been committed for this purpose to be utilized through credit lines, grants, etc.   
199. Another dimension of India’s increasing cooperation with SACU members is in the field of 
human resource development. We are privileged to receive students from all SACU members for 
education and training in India.  Since 2000, over 1,200 nationals of SACU  members have undergone 
training under Indian Technical and Economic Coopera tion (ITEC) programme in Indian institutions.  
200. We believe, India-SACU relations have also been enriched by the presence of the Indian 
community in all SACU member countries. The I ndian community is active in all spheres of 
economic activity as well as in government department s, hospitals, educational institutions, etc.  
BOLIVARIAN REPUBLIC OF VENEZUELA 
 
201. The exercise we are completing today is a very interesting one, as very few customs unions of 
developing countries are evaluated in this Organizat ion, and SACU is the oldest customs union in the 
world.  It is exceptional, moreover, in that it is composed of members with very different productive, 
economic and trade profiles, which at times are ve ry difficult to harmonize.  Over and above these 
disparities and the road that remains to be trav elled, we acknowledge th e considerable efforts 
deployed by the members of SACU to advance thei r own integration process, and we draw attention 
to the important steps taken under this integration agenda in commercial and institutional terms and in 
relation to SACU's multilateral commitments , as noted in the Secretariat report. 
202. The relations between Venezuela and the SA CU members are not necessarily distinguished 
by their commercial component.  However, we ha ve strengthened cooperati on links with all the 
members in various fields, particularly in the areas of education, culture, hea lth and energy.  We hope 
that, as a result of the deepening of our relations with the African continent in general during the 
decade that is drawing to a close, trade relations  with the SACU member countries will very soon be 
strengthened to our mutual benefit. 
203. Outside this scenario, we can affirm that Ven ezuela and the SACU members in general share 
very similar positions on most of the trade topics covered by the Doha Round,  and we have defended 
the development dimension of these negotiations th roughout this long process, with the aim of 
achieving a fair, balanced, development-oriented resu lt consistent with the mandate.  We have also 
promoted fulfilment of the fundamental principles of this negotiation, such as less than full reciprocity 
and special and differential treatment, as provide d for in the Doha Ministerial Declaration. 
204. This is clearly exemplified, specifically in the case of South Africa and other members of the 
Union, by the solid partnerships we have formed in this negotiation, both in agriculture through the WT/TPR/M/222 
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  G-20, and in NAMA through the NAMA–11 group of developing countries, these being the groups 
that have set the pace in these negotiations. 
205. Regarding NAMA in particular, since the Hong Kong Ministerial Conference we have been 
advocating the need for flexibilities on non-agricultura l tariff reduction, bearing in mind the existing 
asymmetries with respect to the industrial development of developing members.  Just as our 
delegation has submitted a proposal to address our di stinctive circumstances in the non-agricultural 
sector, the delegations of the customs union have submitted and defended a va luable proposal which 
also addresses their sensitivities,  asymmetries and objectives, and which above all is of great 
significance for the positive development of the SACU integration agenda, with a view to 
transforming this agenda into a useful tool for the development of its members.  Let us hope that the 
exercise that we are conducting today will enable tho se most sceptical of this proposal to gain a better 
understanding of the reasons for it and its necessity. 
206. Lastly, we recognize the efforts being made by the SACU members in this forum, where they 
maintain active participation and leadership in ma ny areas of the WTO agenda.  In this connection, 
we encourage them to continue to play a proactive role in the interests of fairer and more equitable 
trade, taking account of the real needs of all the developing and least developed countries. 
EGYPT ON BEHALF OF THE AFRICAN GROUP 
207. The African Group would like to extend its full and continuous support for the members of 
the Southern African Customs Union (SACU) during their third Trade Policy Review, and wish them 
its successful conclusion. 
208. Although SACU countries continue to show substantial differences  in the levels of economic 
development, with Botswana and South Africa cl assified as upper middle-income countries, while 
Namibia and Swaziland are considered lower middl e-income countries, and Lesotho is a least 
developed country, they however face common challenges, notably unemployment, income 
inequality, poverty.  
209. I would like to recall within this context the two fold effect of the economic and financial 
crisis on African economic growth and national de velopmental plans, and the reiteration of the 
African Trade Ministers last week in Cairo that  the early and successful conclusion of the Doha 
Development Round, with the developmental compone nt at its core, has become imperative as a 
stimulus for the growth of African economies, and represent their means towards further integration in 
a more strengthened and development friendly multilateral trading system. 
210. The African Group would like to therefore e xpress its support to the SACU countries’ 
common objective of ensuring that the development concerns of developing  and least developed 
countries are taken into account in the outcome of the DDA negotiations. We furthermore support 
their calls for a substantial reduction or the elimin ation by developed WTO Members of all tariff and 
non-tariff barriers, particularly those on products of interest to developing and least developed 
countries.  
211. Economic integration is one of the main objectives of Africa. SACU is considered to be one 
of the oldest customs unions in the world, and is a major building bloc in that direction. The African 
group therefore calls on all WTO members to positivel y contribute to its strengthening and further 
development, and refrain from ac tions that would weaken or undermine that Union. The group would 
like to express its support to the 2002 Southern Afri can Customs Union Agreement that entered into 
force on 15 July 2004, which provides for further harmonization of policies in customs procedures, 
standards, technical regulations, SPS measures, a nd other areas. We encourage SACU countries to  WT/TPR/M/222 
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  further align their policies in these areas, and urge WTO Members to provide the necessary support 
for its success.   
PAKISTAN 
212. The commitment shown by SACU Members fo r pursuing a unified and harmonized trade 
policy is commendable.  It is heartening to note  that since 2003, SACU economies have shown an 
average annual growth of 4% in real terms which has been achieved in the face of infrastructure 
constraints, fluctuations, exchange rates adjustme nts and above all the impa ct of global financial 
crisis.  The delegation of SACU, the Member st ates and their people deserve special appreciation 
from WTO Members for keeping a steady growth  rate and overcoming other difficulties. 
213. Among the most important aspects of regional in tegration is that SACU has established a 
revenue sharing formula under the common revenue pool. 
214. Another important characteristic of SACU countries  is their belief that trade liberalization at 
multilateral level as well as integration at regiona l level can be used to address the development 
concern of developing and least devel oped countries.  This is clearly manifested by two factors:  first 
the overlapping membership of SACU countries w ith South African Development Countries (SADC) 
its Preferential Trade Agreement with MERCOSUR a nd EFTA;  and secondly by its tariff structure.  
The applied MFN CET has decreased from 11.4% in 2002 to 8.1% in 2009.  Not only that tariff rates have been reduced, the tariff has also been simplified and approxi mately 97% tariff lines are on 
ad valorem . 
215. Whereas all SACU members have contributed thei r part in achieving a sustained growth over 
the years, one of its Members has been leading by  example.  The structural changes done by the 
SACU members need further deepening to continue to reap the benefit of regional integration and 
globalization. 
216. The SACU members have continued to demonstr ate their commitment for trade liberalization 
and openness and has impacted the current work in  Doha Development Agenda.  I would like to 
especially acknowledge the role of South Africa as Coordinator of NAMA 11 for furthering the 
viewpoints of developing countries.   
NORWAY 
217. As a member of the European Free Trade Asso ciation (EFTA), Norway signed a Free Trade 
Agreement (FTA) with SACU in 2006 which ente red into force on 1 May 2008.  Through the 
Agreement, EFTA granted the SACU States free trad e in all industrial goods from the onset, whereas 
the SACU States have committed to progressively dismantle their tariffs until 2014 on almost all 
industrial products. 
218. The FTA takes account of the SACU countries’ di verse levels of development by allowing for 
the special and differential treatment of Bo tswana, Lesotho, Namibia and Swaziland where 
appropriate, and by setting out principles of ec onomic co-operation and technical assistance.  
219. In 2008, Norwegian exports to SACU amounted to 827 million Norwegian kroner (NOK), an 
increase by 96 % compared to 2005. The most impo rtant products are energy, electrical machinery, 
other machinery, iron and steel, iron/steel products, seafood, and medical instruments. 
220. Norway’s imports from SACU amounted to 5789 million NOK in 2008, an increase by 94 % 
compared to 2005. The most important products are nickel, edible fruit and nuts, as well as meat.  WT/TPR/M/222 
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  221. While SACU’s global trade figures for the 2000–200 7 period showed a growing trade deficit, 
there has been a growing trade surplus with EFTA. It is our hope that the EFTA-SACU FTA will pave 
the way for a further increase in our trade relations. 
222. In recent years, a number of large-scale Norwegian investments have taken place in SACU 
countries, primarily within the field of energy and aluminium. There is also growing activity in areas 
such as fisheries and construction. In addition, the Norwegian development agency Norad continues 
its “match-making” programme with the aim of fi nding local business partners. Since the programme 
began, 40 “matches” have been established. Many of  these are within the marine and environmental 
technology sector.  
223. The SACU countries have been actively engaged in trade negotiations at the WTO. Like the 
SACU countries, Norway believes that trade is vita l in promoting economic gr owth and development.  
However, market access is not suffici ent, as has been highlighted in the SACU countries’ reports prior 
to this review. Bottlenecks in the form of limite d infrastructure and technical capacity continue to 
hinder developing countries from fully benefiting from the advantages of trade. 
224. SACU countries are important Aid for Trade part ners for Norway. For Norway, ensuring that 
developing countries reap the benefits from the possi bilities offered by the multilateral trading system 
continues to be a high policy priority. It is also  imperative to ensure policy space for developing 
countries so that they may choose development strate gies that take into account their special needs. 
Norway strongly emphasises that Aid for Trade must go hand in hand with our efforts to achieve the 
best possible result from the Doha Round and must be  supportive in fulfilling the objective of the 
Doha Round as a Development Round.  
225. In conclusion Norway remains a committed de velopment and trading partner and we look 
forward to continued cooperation with the SACU  countries, both bilaterally and within the 
multilateral WTO framework. 
NIGERIA 
226. At the outset, Nigeria wishes to acknowledge the SACU countries’ contribution to the 
multilateral trading system. We note the importance at tached by SACU countries to their participation 
in the multilateral trading system and their comm itment in ensuring that their agreement is in 
conformity with the multilateral rules. We would like to commend SACU for the fundamental 
economic reforms being undertaken; and more importantly, the steps they have taken to move away 
from import-substitution to more outward-oriented policies as well as adapt to the fast changing 
environment of globalization. We note with encouragement South Africa’s continued trade 
liberalisation efforts. Botswana should be enco uraged to diversify its economy away from its 
dependence on diamonds and meat. In the same vein, we recognise Lesotho’s status as an LDC, which 
poses special challenges with in the union. We also wish to congratulate Namibia for its efforts since 
independence in 1990 to restructure and diversif y its economy, including its export base away from 
mining, agriculture and fisheries production. We wish to underline the importance of the continued 
pursuit of these liberalisation efforts, in order to increase market access and to improve the stability of 
their trade regime. 
227. At the bilateral level, Nigeria enjoys excelle nt trade and economic relations with SACU. The 
bilateral relations between Nigeri a and South Africa are strategically important to both countries. We 
have noted that the value of bilateral trade be tween Nigeria and South Africa in particular, has 
continued with the sharp upward curve that was witnessed over recen t years. Since the establishment 
of the Nigeria-South Africa Chamber of Comme rce in 2009, we have also witnessed increased 
interaction between our respective business comm unities. South African companies have been  WT/TPR/M/222 
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  successful in several sectors in Nigeria, including  the hospitality, financial services, communications 
and energy sectors.  
228. At the institutional level, we note that a ne w Southern African Customs Union Agreement 
entered into force on 15th July 2004.  The agreement laid the basis for strengthening cooperation in the 
pursuit of common goals and objectives. It is also a ma nifestation of the desire and commitment of the 
partners to consolidate their regional trade re lations.  This agreement provides for further 
harmonization of policies in a number of areas, incl uding customs procedures, standards, technical 
regulations, SPS measures, competition, and unfair tr ade practices, although alignment in these is yet 
to fully materialise.  
229. It is noteworthy that the SACU Secretariat has acknowledged the challenge for the Customs 
Union due to its members being party to separate trade regimes. South Africa trades with the EU 
under the Trade and Development Cooperation Agre ement (TCDA) while the other members had 
previously traded with the EU under the Cotonou Agreement, which expired in 2007.  There is 
therefore a need to harmonise these two regimes with  the EU, in order to adhere to the objectives of 
the customs union, particularly in terms of a comm on external tariff and the free movement of people, 
goods and services among its members.  The customs union is also faced with the challenge of 
implementing the agricultural policy, competition policy, unfair trade practices and other priority commitments in the SACU agreement. Perhaps, it w ould be helpful, if there is clarification as to 
whether there is a time frame regarding the harmonisation of policies in these areas.  Also, it would be helpful, if there is clarification on how SACU c oordinates its participation in the DDA negotiations.  
230. South Africa is one of the earliest users of trad e remedies. It has been observed that the new 
SACU Agreement has important implications for the anti-dumping regime within the customs union. 
For instance, it changed the way in which tariff decisions, including anti-dumping tariffs are made, 
and it also requires member states to develop legislation on contingency trade remedies such as anti-dumping for the region, and to establish national bodies to address these remedies with different 
countries. Nigeria hopes that South Africa would be able to share its experiences and assist other 
African countries in this respect.  
231. In conclusion, we are mindful of the fact that  in the pursuit of their common objectives, there 
will be challenges in the way. With the comm itment towards ensuring that the objectives are 
achieved, we urged trading partners, to support their efforts, particularly the strengthening of SACU 
and country-level institutions. To achieve the goals and objectives of the new SACU Agreement 
would require collective effort to move forward as a region. It is Nigeria’s expectation that the 
outcomes of Doha would further strengthen and s upport the efforts by SACU; and would assist its 
members in achieving economic growth and development.  
NEW ZEALAND 
232. Although New Zealand’s most substantial trade relationship in the region is with South 
Africa, we look forward to engaging with colleagues from all SACU member states on issues of 
mutual concern.  
233. New Zealand is pleased to note that since the last trade policy review SACU economies have 
collectively enjoyed solid economic growth, and have made progress towards overcoming 
developmental challenges. New Zealand welcomes  the progress made at national level toward 
implementation of competition policies and the steps taken to strengthen intellectual property laws.  
234. The New Zealand and South Africa trade relations hip is diverse and of significant value. 
Although trade with other SACU members is modest, there is clear potential to build bilateral trade on 
the basis of the longstanding and friendly ties between our countries.  WT/TPR/M/222 
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  235. New Zealand recognises that a priority for SA CU members, with the exception of South 
Africa, will be the diversification of their econom ies. This poses significant challenges. New Zealand 
urges SACU members to give due weight to the Secretariat’s recommendation that further 
liberalisation and investment in services should generally improve efficiency of other economic 
activities and the competitiveness of SACU’s expor ts. New Zealand encourages SACU to continue 
with its work towards more coherent policy form ulation in the areas of agriculture, industrial 
development and  competition. 
236. New Zealand acknowledges SACU’s role in voicing  the concerns of developing countries in 
the WTO, and its commitment to building a multilate ral trading order that will take account of the 
interests of developing countries. We encourage SA CU countries to continue to build institutional 
capacity to ensure that member states can participat e fully and most effectivel y in all negotiations, and 
ultimately to take advantage of the opportunities offered by the multilateral trading system. 
237. We encourage SACU to continue its work to  advance and deepen regional integration. 
Although the five SACU member states continue to  show substantial differences in the level of 
economic development, with South Africa and Bo tswana now classified as upper-middle income 
countries, this asymmetry need not stand in the wa y of regional integration processes. New Zealand’s 
engagement with ASEAN, in particular the conc lusion of AANZFTA negotiations this year, provides 
an example of how countries with widely different  levels of development and capacities can work 
together  in support of the common goal of enhanced  regional integration and economic development.  
ZIMBABWE 
238. Zimbabwe cherishes the very strong histori cal trade and economic ties it shares with the 
SACU countries. We, along with SACU countries  are bonded Members of the Southern African 
Development Community (SADC) and other regiona l groupings where we share common interests 
and vision.  At the bilateral level, Zimbabwe has  trade agreements with three of the SACU members,  
Namibia, Botswana and South Africa. 
239. We wish to commend the progress made by the SACU member states in advancing the trade 
agenda, and the significant progress on the macro- economic front during th e period under review. 
Mindful of their potential strengths and challeng es to attaining their national socio-economic and 
technological objectives, the SACU members, guide d by the national visions, have embarked on 
national development plans and  strategic polic ies, which will be realized through various 
interventions to improve trade competitiveness, expand the export base and strengthen human resource development and institutional capacity-building, among others.  
240. We note from the Secretariat’s report that the member states of the SACU continue to exhibit 
pronounced differences in levels of economic development and th at the global economic crisis has not 
spared the SACU, moreso, given that the majority of them are dependent on a very small range of 
commodity exports. We applaud the efforts bein g made by these members to diversify their 
economies, mainly through encouragement of fore ign direct investment (FDI), creation of a 
conducive environment for private sector participa tion and ensuring infrastructural development. We 
recognize the critical importance of continued techni cal assistance and capacity building for these 
members, and support for infrastructural investments,  particularly for the la ndlocked SACU members, 
so that they may improve performance in tradi ng across borders, thereby reducing the costs and time 
involved in importing and exporting go ods from and through these countries. 
241. My delegation wishes to commend Lesotho, th e least developed among the SACU countries, 
for the positive development efforts since the last Trade Policy review in 2003 which have witnessed 
a high growth in per capita income of 78.7 per cent from $529.07 in 2003 to $945.49 in 2007. We, nonetheless, note the challenges being faced by Lesot ho, which include trade preference erosion, a  WT/TPR/M/222 
 Page 37 
 
 
  threatened revenue source under the current globa l economic crisis, rural poverty, food insecurity, 
high unemployment, income inequality, and the deve lopment of an appropriate policy to deal with 
HIV and Aids. We believe that Lesotho will be ab le to meet the challeng es with continued support 
from the donor partners and the development community. 
ZAMBIA 
242. It is clear from the reports that SACU countries had in the recent past recorded steady growth 
rates in terms of gross domestic products averaging between 4% to 5%.  However, with the on-set of 
the financial crisis, no single SACU country has b een spared from the eff ects of the crisis as 
witnessed by the contraction in growth rates, risi ng inflation, increased levels on unemployment and 
slowed export growth. 
243. Like many commodity dependent economies, SACU faces several challenges requiring 
concerted efforts within regional and multilateral in itiatives aimed at promoting sustained growth and 
development.  Notable challenges highlighted in th e Reports include high food prices, high levels of 
poverty and unemployment, limited devastation, lim ited growth of the services sector among others. 
244. As highlighted in the report of the Kingdom of Lesotho in particular, there is no doubt that 
preferential market access schemes play an important and catalytic role in promoting export growth 
and overall economic development. 
245. It is equally clear that regional as well as inte rnational markets are important platforms for 
promoting among others, scale economies and transfer technology. 
246. It therefore remains important for regional and the multilateral frameworks to unfold in a 
manner that supports national initiatives.  The conclu sion of the Doha Round that upholds principles 
that support development can therefore not be ove r-emphazised.  This should be supported by 
adequate support through initiatives such as aid for tr ade and the enhanced integrated framework for 
LDCs. 
247. It is my delegation’s hope that the conclusion of  this review process set clear in the minds of 
our development partners the challenges that Africa  continued to face in the global economy and the 
urgency to promote the growth and diversificati on of these economies, with the overall objective of 
promoting a healthy global economy. 
248. May I end by seeking clarity by the delegation of South Africa regarding the regional 
industrial development strategy highl ighted on page 31, para. 15 of the Report.  We would like to seek 
clarity whether this regional strategy is limite d to the SACU region in view of South Africa’s 
membership to the Southern African Development Community. 
ANGOLA 
249. Angola maintains excellent political, economic and trade relations with SACU.  We hope that 
this customs union will expand in the future with  the implementation of the provisions of the 
SADC regional economic programme, the ultimate aim of which is market integration, cooperation 
and coordination of sectoral policies in the framewo rk of the comprehensive project represented by 
the SADC Trade Protocol.  The long-term objective of the protocol will be to secure duty-free 
admission for 99 per cent of goods between the countr ies of the region and to develop intra-regional 
trade by 2012-2015. 
250. With respect to regional sectoral policies, Angol a is responsible for coordinating the energy 
sector and other important water resource projects need ed by the region to ensure the rapid growth of WT/TPR/M/222 
Page 38  
 
  its potential, along the lines followed by other deve loping regions in the world.  Our delegation 
welcomes the reforms undertaken by the countries of th e customs union, particularly in relation to the 
common tariff, the formulation of agricultural polic ies, competition, unfair trading practices, and the 
adoption of the new formula for distributing customs and excise revenue among SACU members. 
251. From the bilateral standpoint, Angola maintain ex cellent trade relations with two countries of 
the customs union, namely South Africa and Namibia;  the value of our commercial transactions with 
them has tripled over the last five years, and we hope to see it quadrupled in the coming years, following the entry into force of the SADC Trade Protocol. 
  WT/TPR/M/222 
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  V. REPLIES BY THE REPRESENTATIVE OF SACU AND ADDITIONAL COMMENTS 
252. I am pleased to address this body on the occasi on of the SACU Trade Policy Review and to 
deliver responses to the comments and questions raised during the first session.  A number of issues were raised in the run up to and during this revi ew, covering a broad spectrum of trade, policy and 
institutional matters. 
253. In this respect, we wish to thank Members fo r their insights, encouragement and advice. We 
will consider these as we go forward.  
254. In this statement and in addition to the written responses that we have already provided, I will 
address Members’ comments relating to SACU’s (a ) economic and institutional environment, (b) 
trade policies by measure and (c) sectoral policie s, by elaborating specifically on:  Institutional 
Structure and Functioning of SACU;  Regional Inte gration Developments;  Th e Impact of the Global 
Economic Crisis;  The Multilateral Trading System and the DDA Negotiations; and Trade 
Liberalisation, Trade Reform and the Openness of the SACU Economies. 
255. With respect to the Institutional Structure and Functioning of SACU
, the coming into force of 
the new SACU Agreement in 2004 heralded a new er a in deepening integration in the region through 
common institutions, policies and democratic deci sion-making processes. In accordance with the new 
Agreement, the Council of Ministers, the Commissi on, five Technical Liaison Committees and the 
Secretariat are now fully operational. 
256. In addition, the process of establishing the SACU  Tariff Board and National Bodies is also at 
an advanced stage. These institutions will addr ess all issues and concerns relating to tariff 
administration, tariff setting, contingency trade re medies and trade defence instruments. SACU has 
embarked on a capacity building programme through the attachment of officials from the other 
Member States to the International Trade Administration Commission (ITAC) of South Africa. As an interim measure, the Council of Ministers manda ted ITAC to conduct tariff and trade remedy 
investigations in consultation with other SACU Members. The entire SACU market is taken into 
account in these investigations by ITAC, with all SACU Members having an opportunity to 
participate, or to request for investigations into ta riff or rebate provisions. These include requests for 
increases as well as decreases in the SA CU Common External Tariff (CET).  
257. The development of common and harmonised polic ies in the areas of industrial development, 
agriculture and cooperation on competition polic y matters, as identified in the 2002 SACU 
Agreement, remain important objectives for us. This  is a challenging process due to the different 
economic circumstances of the Member States. No twithstanding these challenges, SACU has initiated 
policy development work in all areas covered in the SACU Agreement. SACU countries have also 
embarked on the harmonization of customs proced ures, the improvement of customs cooperation, 
simplification of documents and electronic data inte rchange initiatives, to further facilitate trade.  
258. Several WTO Members indicated in their statements a desire to see greater harmonization of 
technical standards and sanitary and phytosanitary  measures in SACU. We wish to reaffirm our 
commitment that these measures should not create unnecessary barriers to trade and we are addressing 
these in internal, regional and international fora.  
259. Regarding dispute settlement, we have co mmenced with the establishment of an ad hoc  
SACU Tribunal and the necessary supporting procedures and policies.  
260. With respect to the harmonization of fiscal polici es and tax regimes, I can mention that this is 
being considered within the context of the SADC  Finance and Investment Protocol. Our excise tax WT/TPR/M/222 
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  regime is already harmonized and there are no furt her taxes on internal trade within the customs 
union. 
261. Several Members have referred to the differenc es that exist in the levels of economic 
development among SACU Member States. In spite of  this challenge, the region has still managed to 
achieve an average GDP growth rate of 4%. It is recognised though that this growth has been uneven 
across the Member States. The SACU Council of Mini sters is addressing this situation by refocusing 
the SACU agenda towards, among others, the devel opment of infrastructure that will promote deeper 
regional integration and trade. This strategy is  aimed at strengthening the economies of the lesser-
developed Members of the Customs Union. 
262. With respect to Regional Integration Developments
, we will continue to strengthen and 
deepen our integration within the Customs Union and support other regional initiatives that aim to 
enhance regional integration. We are aware that, in pursuit of our common objectives, there will be 
challenges. However, we remain committed to en suring that our common objectives are achieved, and 
in this process, we invite our trading partners to support our efforts, in particular, the strengthening of 
Customs Union institutions, capacitie s, mechanisms and policies. 
263. In support of this, I can indicate that our Council of Ministers has on various occasions 
reaffirmed its common objectives of strengthening SA CU and ensuring the integrity of the Union and 
its Common External Tariff is maintained. We therefore acknowledge that the Members of the 
Customs Union have inherited a few bilateral ag reements that will be harmonized within the 
framework of a CET.  
264. A specific enquiry was made earlier this week rega rding internal border controls in SACU. In 
addition to our written responses, it should be not ed that the SACU Agreement makes provision for 
the application of a Common External Tariff for all goods entering the Customs Union.  
265. One of the key objectives of SACU is to facilitate the cross-border movement of goods 
between the territories of its Member States. In order to achieve this goal, the SACU Agreement 
provides for the free movement, within the Common Customs Area, of domestically grown, produced 
or manufactured goods. In addition, no duties are imposed on goods imported from outside the 
Customs Area, once cleared through the first point of entry into the Common Customs Area. This free 
movement relates specifically to the elimination of customs duties and quantitative restrictions on 
trade between Member States and is the practice across the Customs Union.   
266. The Agreement, however, provides for trade measu res being applied on the grounds of health, 
environment, intellectual property rights, national s ecurity, exhaustible natural resources, as well as 
economic, social, cultural or other reasons decide d by Council. These include the administration of 
SPS regimes and Infant Industry Protection measures.  
267. More significantly, however, is the fact that  border controls are applied for purposes of 
levying domestic taxes (e.g. VAT or GST), whic h are not yet harmonised within SACU and for 
purposes of collecting trade data, which, inter alia,  is used in the calculation and sharing of revenue 
from the Common Revenue Pool (CRP).  
268. Our vision is for SACU to be a building bloc fo r deeper integration on the continent. We are 
pursuing this vision with the implementation of th e SADC Free Trade Area, as well as the planned 
trilateral trade engagement between SADC, the EA C and COMESA with the objective of creating a 
wider free trade arrangement.  
269. Regarding our trade negotiations with third pa rties, the outcome of the Interim Economic 
Partnership Agreement (IEPA) negotiations has led to several challenges for the implementation of  WT/TPR/M/222 
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  the SACU Agreement. These include difficulties in th e application of the CET and Rules of Origin. 
The modalities for implementing the IEPA are also  still being negotiated be tween the EC and the 
SADC EPA group as the implementation of the IEPA  requires resolution of the outstanding SADC 
EPA concerns and harmonisation with the Trade Ch apter of the South Africa-EC Trade Development 
Cooperation Agreement (TDCA).  
270. SACU aims to have trade agreements with thir d parties that strengthen and deepen integration 
within the Customs Union and assist its Member St ates to integrate into the global economy through 
enhanced trade and investment. SACU will work to en sure that all trade agreements with third parties 
promote this objective. 
271. With respect to the Impact of the Global Economic Crisis , I can indicate that our region and 
Member States are being affected  through lower commodity prices, a reduction in demand for our 
exports in global and regional mark ets, contraction of industrial activity and subdued global tourism 
demand. This has led to job losses in all sectors, but especially in the mining, manufacturing and services sectors. Additional eviden ce of the impact of the global crisis on the region has manifested 
itself in dramatic trade declines and consequently  the decline in customs revenue, which, as was 
pointed out, remains an important source of revenue for many SACU Countries.   
272. This fall in revenue has contributed to higher budget deficits, which may be further 
compounded by the need to borrow to supplemen t budgetary shortfalls. This obviously impacts 
negatively on our infrastructure development and other national development programmes. The net 
outcome being that the achievement of our povert y alleviation goals and millennium development 
goals are under threat. 
273. As a consequence there has been  increased pressure from stakeholders in SACU, i.e. business 
and labour, to protect domestic jobs. However, SA CU Members have continued with the process of 
reform of their economies in an effort to reduce input costs for downstream industries and promote 
labour intensive investment and job creation. With  this objective in mind, SACU reduced tariffs on 
235 lines in textiles, chemicals, aluminium, capital e quipment and machineries. In this context, there 
has also been a modest increase of 5 percentage  points on 38 clothing lines in bringing these up to the 
current bound levels in complian ce with our WTO commitments.  
274. While financial markets and the global economy c ontinue to face uncertainty, there is still an 
urgent need for action to mitigate this crisis. In this regard, SACU Member States support the 
outcomes of the two recent G20 Summits. On our part, we recognise the importance of undertaking the necessary institutional and structural reforms to make our economies more resilient in the face of 
the global crisis. We will pursue the development impe rative and ensure that the impact of the global 
crisis is mitigated so that poor households are protected. In this regard , we are placing special 
emphasis on the development of the small, medium  and micro enterprises (SMMEs) and their vital 
role in rural development, as well as poverty alleviat ion, employment creation and social upliftment.  
275. In order to mitigate these challenges, SACU  Member States will continue to pursue 
diversification programmes away from exporting prim ary products to exportin g value-added products, 
and also trade diversification with respect to products and markets.  
276. We therefore count on our development part ners to support our programmes, especially 
through Aid for Trade Initiatives and to support us in  obtaining crucial financing for our projects in 
these areas. We also reaffirm our position that the cu rrent global financial crisis should not lead to a 
resurgence of protectionist measures.  
277. Before I conclude on this theme, I wish to remind Members not to forget the significance of 
the Customs Union in crisis times like these. Duri ng the economic crisis, SACU has experienced an WT/TPR/M/222 
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  increase in trade amongst its Memb ers, evidence that the Custom s Union provides a measure of 
shelter against external and global shocks. As mu ch as SACU is pursuing global integration, trade 
diversification and trade liberalisation, the prom otion of intra-SACU trade to complement these 
existing and new markets, remains an important objective.  
278. SACU is fully committed to the Multilateral Trading System
 and have participated actively in 
the WTO negotiations thus far. As such, SACU Me mber States reaffirm their commitment to the 
successful conclusion of the DOHA round based on its development mandate.  
279. We are also seeking a negotiating outcome that leads to substantially improved market access 
conditions for economic operators from developing  nations seeking access to markets in developed 
countries. The outcome should result in a real reduction in trade-distorting support given to 
agriculture, while at the same time contributing to the achievement of the millennium development 
goals, leading to sustained economic growth and development for developing countries.  
280. SACU includes three small and vulnerable econom ies and one least developed country. In 
this context, we appreciate the recognition expressed by several Members in their statements that the 
current SACU binding commitment is an outcome  of the Uruguay round where South Africa was 
treated as a developed country. This is creating substantial economic and developmental challenges 
for us and we therefore appreciate that almost a ll WTO Members recognize the need for SACU to be 
provided with additional flexibilities when applying the NAMA formula as compensation for the impact of the deeper cuts in applied tariffs. We  call on those that still harbour some doubts about the 
appropriateness of this request to reconsider their position. 
281. Some delegations also referred to the need fo r SACU to diversify the production and exports 
of agricultural products.  SACU fully agrees with  these members and calls on all WTO Members to 
assist SACU in addressing this challenge by ensu ring a development outcome in the Doha Round. 
This outcome should effectively address existing trade and tariff policies in developed countries, such 
as tariff escalation and high levels of trade and production distorting support. In addition, SACU 
Member States require sufficient policy space to deve lop and diversify its produ ction and export base. 
282. We believe that it is important that the D oha Round is brought to  a speedy and successful 
conclusion with real and tangible outcomes in favour  of the developing and l east developed countries. 
283. Finally, we also take note of the concern that  some Members raised regarding SACU Member 
States’ outstanding notifications to the WTO. We are aware of this concern and I can report that 
Member States are building the necessary capacity to en able them to honour their commitments in this 
important area of transparency. 
284. In relation to Trade Liberalisation, Trade Re form and the Openness of the SACU Economies
, 
several Members have already noted that SACU’s av erage MFN tariffs have declined since the last 
review in 2003. Since the last review, SACU has al so made remarkable progress in reforming its tariff 
regime. The average applied rate declined from 11. 4% in 2002 to 8.1% in 2009. The SACU average 
applied tariff for agriculture in 2004 was 9.3% a nd in 2009 it is 9%. The total number of tariff lines 
has been reduced from 12,800 eight digit tariff lines in 1990 to 6,618 in 2009. The proportion of duty 
free lines in the SACU tariff structure is currently 53% compared to 45% in 1990. 
285. SACU has also restructured and simplified its tariff structure and as a result does not have any 
tariffs that are bound in non- ad valorem  form, although SACU has some applied tariffs which are 
in non- ad valorem  form.  Non- ad valorem  tariffs comprised 25% of the tariff structure in 2002 
and now comprise only 3% of SACU tariffs, mainly in the agricultural sector. The remaining 3% of 
non-ad valorem  tariffs should be seen in the context of existing global distortions caused by the high 
level of trade distorting support measures being implemented by a large number of developed  WT/TPR/M/222 
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  countries.  SACU does not provide any trade distorting domestic support or export subsidies in 
agriculture. SACU Members thus look forward to  the DOHA Development Round to effectively 
address these huge distortions in agriculture trade.  
286. Concerns have been raised about possible non-compliance of the remaining non- ad valorem  
duties with bound rates. This is theoretically possi ble, but the likely occurrence of duties exceeding 
bound rates is very low and the significance of th ese duties has diminished over time due to price 
differentials. SACU is continuing with the process of simplifying its tariff structure.  
287. Concerns have also been raised about the high use of trade defence inst ruments. It is worth 
noting that anti-dumping initiations have been declini ng since 2006. It is therefore no longer correct to 
state that SACU is the highest user of such instruments. 
288. I will now briefly touch upon key sectoral initiatives, which SACU is embarking on.  
289. In relation to Agriculture , SACU Member States recognise the need to foster agricultural 
development and the agricultural sector remains a priority for the region. Despite its declining 
contribution to GDP in all SACU Member States , agriculture, through its backward and forward 
linkages, remains a significant source of employment and is critical for the attainment of food security 
in SACU Member States. Efforts to diversif y production and the agri cultural export base are 
continuing and, to this end, the support for small scale farmers is being strengthened.  
290. With respect to the Mining  sector, it remains a cornerstone of SACU economies and is 
consistently amongst the largest contributors to GDP in our Member States. We also recognise the volatility of this sector and our Member States therefore remain committed to promoting local 
beneficiation and value addition of mineral resource s. Member States also continue to work toward 
diversifying their export base to mitigate against the adverse effects of commodity price fluctuations.  
291. In relation to the Energy Sector
, the importance of reliable and sustainable energy is also 
recognised. Recent power shortages, as noted by some delegates, pose real threats to regional growth, 
investment and development. Alternative and additional energy sources are being developed.  
292. With regards to the Manufacturing Sector , industrial development remains a priority policy 
objective of all SACU Member States and to this end SACU is in the process of harmonising regional 
industrial policy. Sector strategies provide an impor tant tool to promote industrial development and 
will continue to be pursued. We also recognise the important role of tariffs  in promoting industrial 
development. 
293. We acknowledge the importance of promoti ng Small, Medium and Micro Enterprises  to 
advance economic development and employment. We wish to emphasize that the development of our 
economic policies will reflect the importa nce of developing the SMME sector. 
294. To maintain a Competitive Business Environment , SACU Member States remain committed 
to, amongst others, providing a stable macroecono mic environment, developing an appropriate 
regulatory framework and ensuring access to inputs and access to markets in order to support the establishment and development of SMMEs and business enterprises in SACU.   
295. In relation to the Services Sector
, SACU Member States recognise the importance of an 
efficient and well regulated regional services market . Consistent with international trends, in each 
SACU Member State, the contribution of services to GDP has been steadily increasing.  
296. With respect to Investment , specifically foreign direct investment (FDI), the region places 
high priority and emphasis on policies that will facilitate FDI. Consequently, SACU Members are WT/TPR/M/222 
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  actively developing and adopting updated macroeconom ic policies and legislation in the areas of 
Investment Promotion, Industrial Policy, Competition Law, etc. SACU is also in the process of developing strategies with respect to investment , exports and private sector development. It is 
expected that these strategies would assist in th e realisation of economic diversification.   
297. We have addressed a substantial number of comme nts raised by Members. SACU has worked 
hard during the past few weeks to answer all th e advance written questions in detail.  Additional 
questions that were submitted in the past few days , will be answered within the stipulated timeframe 
allowed.  
298. In concluding, I feel greatly honoured to pr ovide some final remarks on behalf of my 
colleagues from the SACU Member States. In doing  so, I would like to offer appreciation to the 
distinguished chairperson of the Trade Policy Review Body, who has ably steered this Review to 
conclusion. Furthermore, our sincere thanks to our distinguished discussant for his contribution. 
299. We also thank the WTO Secretariat for undertaking its detailed analysis and for compiling a 
comprehensive report on SACU. We wish to expr ess our appreciation for the expression of support 
and encouragement received from the WTO Members. Fi nally, we invite you to celebrate with us the 
centenary of SACU in 2010 and join us at the FIFA World Cup in South Africa. 
DISCUSSANT 
300. On the basis of all that we have heard, I have no doubt that the SACU member States have 
successfully used this third TPR to demonstrate the challenges confronting the region; and Members 
have also certainly appreciated those challenges.  
301. At the regional level, the key issues that have  been raised in the questions by Members 
include the differences in the leve ls of economic structures, devel opment and needs, arising from the 
historical realities and circumstances of the SACU member States; overlapping trading arrangements and complex multiple regimes, including the relate d challenges of policy harmonisation; contingency 
trade remedies; tariffs and other charges; standards and technical requirements; and the impact of the 
global economic crisis, which has resulted in a sharp decline in exports and overall trade performance. 
302. Members have recognised and expressed d eep appreciation for the commitment and 
contribution of the SACU member States to the WTO and, in particular the Doha Round negotiations. 
I also think that there has been reasonable rec ognition from Members that the SACU countries have 
refrained from raising trade barriers, in spite of in creasing trade deficits and deterioration in economic 
circumstances. I believe that this is a very good lesson for the rest of the membership. It is also 
reassuring that the SACU member States have reaffi rmed their commitment to work closely with the 
rest of the membership towards the successful conclusion of the Doha work programme as soon as 
possible.  
303. Many Members have used the opportunity of this  review to demonstrate the extent and depth 
of their bilateral trade and investment relations w ith the SACU member States. And I believe it is in 
that context that concerns have been expressed re garding some aspects of the national trade policies 
and practices of the SACU member States, partic ularly intellectual property rights protection and 
enforcement, investment, competition and consumer protection. 
304. It is my honest assessment that this has b een on the whole, a very successful review. 
However, it is my expectation that the SACU memb er States would reciprocate the goodwill that has 
been demonstrated by the rest of the member ship over these two days, by continuing with the 
necessary reforms and adjustments that should build on the progress that has been  made since the last 
review. In that regard, there is a need to carefully  reflect on the concerns that have been expressed so  WT/TPR/M/222 
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  that when they return for the four th review in six years time, the story would even be a better one. 
And on a lighter note, I wish to share this joke with the delegation. A Euro pean tourist once asked a 
South African: I want to walk from Durban to Cape  Town, can I follow the railway tracks?  The South 
African answered: Sure, it’s only two thousand kilometres, take lots of water.  SACU has come a long 
way, but you still need a lot of hard work for the arduous task ahead in today’s knowledge-based 
global economy . 
305. To achieve that objective, further efforts would need to be made at the national level by the 
member States.  In particular, South Africa shoul d be able to demonstrate a more cohesive and 
mutually beneficial leadership role in the devel opment process of the sub-region. I completely agree 
with Switzerland that “the healthier the South A frican economy is, the better will the economies of the 
other SACU member States perform”.  
306. There is need for further liberalisation a nd policy harmonisation in mining, investment, 
transport and logistics services, in order to build synergies, improve the efficiency of other economic 
activities as well as enhance competitiveness and attract foreign direct investment. All these measures 
should, no doubt, assist in advanci ng and deepening regional integrati on. This is more so as it has 
been increasingly recognised that continuous struct ural reforms and outward orientation are key pre-
requisites for sustainable economic development. This should also assure that the SACU member 
States fully benefit from the numerous free trade agreements and arrangements that are being put in place. 
EUROPEAN COMMUNITIES 
 
307. Let me thank SACU Members for the replies provided to our own questions and indeed all 
questions submitted ahead of this TPR. Transparency  is a key obligation of all WTO Members. And 
the TPR is one of the most important tools to enha nce transparency about the different aspects of our 
trade policies and practices. In this vein, we woul d have appreciated somewhat more comprehensive 
explanations and clarifications with regard to some  of our questions. As we have mentioned in other 
occasions, it is of outmost importance that all Members subject to a TPR provide substantive, 
complete and useful replies for helping other WT O Members better understand their trade practices 
and measures.  We have no specific follow-up comm ents at this point. We will on the other hand 
submit today in writing a few additional questi ons, among others on tariff policy, services and 
regional trade agreements. 
308. Finally, I have to return to a point we rai sed in our introductory statement regarding the 
omission of a description of South Africa’s fisheries sector and policies. I would like to insist that the 
Secretariat explains its decision not to cover this important sector at all in the case of South Africa, which is contrary to the standard practice and i ndeed in stark contrast to a well-detailed account 
provided for Namibia in the same report. 
CHINA 
309. Through SACU’s intervention this morning, we have been able to see a much clearer picture 
of where SACU stands regarding its macro econo my and trade policies, what the challenges and 
problems are and what SACU Members have in vision to deal with them.  
310. Taking this opportunity, China would like to r eaffirm to SACU, and th rough SACU, to all our 
African friends, our solidarity with them. Last Saturd ay, the Ministry of Foreign Affairs of China held 
an open day of the Forum on China-Africa Coopera tion, known as FOCAC, in Beijing, which was 
warmly received by the public of China and Africa ns in China as well. Yesterday, Chinese President 
Hu Jintao addressed to the Op ening Issue of the new edition 
China and Africa  Journal, the only 
English magazine in China specifically for Afri can readers. This coming Sunday, the Fourth WT/TPR/M/222 
Page 46  
 
  Ministerial Conference of FOCAC will be held in  Sharm el-Sheikh of Egypt, where Chinese Premier 
Wen Jiabao will be present. We have firm confid ence that this conference will be fruitful and that 
China-Africa cooperation will be pr omoted to a higher level. 
CANADA 
311. I would like to thank the SACU delegation for the responses to the advance written questions 
as well as their comprehensive statements.  We ha ve a follow-up question to the responses provided 
which I will forward to the Secretariat for your consideration. 
SECRETARIAT 
312. The section on fisheries is missing from the Secretariat Report.  The 2003 Report did contain 
a detailed section on fisheries but this time unfor tunately we did forget.  We did not do it 
intentionally.  
  WT/TPR/M/222 
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  VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
313. This third Trade Policy Review of the Southern  African Customs Union (SACU) has given us 
the opportunity to appraise the evolution of SACU's trade policies since 2003.  This was made possible largely by the constructive engagement of the high-level  delegations of Botswana, Lesotho, 
Namibia, South Africa, and Swaziland.  I would also  like to acknowledge the valuable contribution of 
the discussant, Ambassador Yonov Agah, and thank Memb ers for their participation in this exercise. 
314. Members praised the SACU countries for th eir positive economic performance during the 
review period, which was largely due to their re form efforts. Nonetheless, SACU countries' GDP 
growth has been somewhat erratic, mainly reflec ting infrastructure and other constraints; it has 
recently been affected by the global economic crisis.  In this regard, SACU countries were encouraged 
to move ahead in implementing structural reforms to address these constraints and reduce 
unemployment, income inequality, and poverty. 
315. Members commended the SACU countries on thei r commitment to the multilateral trading 
system, and their strong support for the DDA. However, several Members highlighted the 
complicated nature of SACU countries trade policies arising from overlapping preferential 
arrangements. Negotiation and im plementation of such arrangements were not only difficult to 
manage, given the limited resources of the countries, but could also detract from multilateral efforts. 
Members encouraged SACU countries to take step s to fully implement their 2002 SACU Agreement 
with a view to enlarging the scope of their co mmon regime away from customs-related issues. The 
revenue-sharing formula establishe d under the 2002 SACU Agreement has contributed to an increase 
of public revenues in  Botswana, Lesotho, Namibia, and Swazila nd, with South Africa continuing to 
manage the Common Revenue Pool.  
316. Members congratulated the SACU countries on thei r trade liberalization efforts. The structure 
of the common external tariff has been simplified a nd its simple average rate reduced from 11.4% in 
2002 to 8.1% in 2009. Members indicated that the imposition of non- ad valorem  rates on some tariff 
lines creates a risk of non-compliance by SACU Members with their individual tariff binding 
commitments on ad valorem  rates. Concerns were also expressed about the tariff lines on which the 
MFN applied rates exceed the bound levels, and ab out the relatively large use of anti-dumping and 
other contingency trade remedies by South Africa on behalf of the customs union. Some Members 
urged SACU countries to enhance compliance with WTO notification obligations. 
317. SACU countries were encouraged to move ahead in terms of market and product 
diversification given that, with the exception of So uth Africa, they have a narrow export base;  key 
exports are diamonds and other minera ls in Botswana and Namibia, te xtiles in Lesotho, and sugar in 
Swaziland. On request, SACU countries provided cl arifications on various issues, including export 
and investment incentives; standards, technical regulations, and SPS meas ures; public procurement 
regimes; protection of intellectual property right s; agriculture, including food security; mining and 
energy; manufacturing, particularly the motor, textiles, and clothing industries; and services. 
318. Members appreciated the replies provided by the delegations of SACU countries, and looked 
forward to further responses. 
319. In conclusion, the numerous questions a nd active discussion indicate the importance 
Members attach to this Review.  I encourag e SACU countries to improve their multilateral 
commitments, both in goods and services, and to pursue the implementation of their reform 
programmes, with a view to enhancing the transpar ency, predictability, and credibility of their trade 
regimes, and adherence to the WTO principles.  Tr ading partners can help by ensuring that their 
markets are fully open, and by providing appr opriate technical assistance to SACU countries. 
__________