WORLD TRADE  
ORGANIZATION  WT/REG176/5 
2 May 2007 
 (07-1824) 
Committee on Regional Trade Agreements Original: English 
  
 
PROTOCOL ON TRADE IN THE SOUTHERN AFRICAN  
DEVELOPMENT COMMUNITY (SADC) 
 
Questions and Replies
 
 
 
 The following communication, dated 30 April 2 007, is being circulated at the request of 
SADC members.   This document reproduces the questions addressed to the Parties and the responses submitted.  
  
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 Questions from Japan
 
 
1. We appreciate that the Parties of the Protoc ol on Trade in SADC notified the Protocol 
under Article XXIV:7(a) of the GATT 1994.  As far as we understand, the Southern African 
Customs Union (SACU) has not been notified to  the WTO and we will appreciate its early 
notification. With regard to SACU, may we und erstand that the SACU is a complete Custom 
Union which does not impose duties among Members and which has common external tariffs?  
 SACU is in the process of being notified to the WTO and it is a functional Customs Union 
with a Common External Tariff and Common Revenue Pool and an accompanying revenue sharing 
mechanism.  
2. With respect to the descriptions in Paragra ph 12, Page 7 of the Factual Presentations 
(WT/REG176/4), could the Parties clarif y the reason why non-SACU SADC members 
distinguished the Republic of South Africa (RSA) from the other SADC members? Is that 
because the economic size of the RSA is far larger than that of the other members?  
 Yes the size of the South African economy in relation to the other economies necessitated the 
application of asymmetry in the scheduling of  tariff reductions by the non-SACU Members. 
  
3. With respect to Table II.10, Page 25 of the Factual Presentations (WT/REG176/4), has 
the Protocol on Trade in SADC overridde n those agreements shown under “Bilateral 
Intra-SADC Agreement” and that they were lapsed? 
 The Protocol on Trade (Article 27) has not overri dden the existing bilateral agreements.  They 
will effectively be overridden once the provisions of  the SADC Protocol on Trade offer better market 
access.  Some of the bilateral agreements amongs t SADC members excluding South Africa, offer free 
duty access with simple value added rules set at modest  thresholds and will therefore continue to be 
an important feature in trade among the concerne d countries until perhaps after the completion of 
tariff reductions and a review of the rules of origin under the SADC Protocol on Trade.  The situation 
is different however in the case of trade with Sout h Africa where the SADC Protocol now offers the 
best conduit for preferential trade between S outh Africa and the non-SACU SADC members. WT/REG176/5 
Page 2  
 
  Questions from the European Communities
 
   
4. In light of the findings of the Mid-term Review, could the Parties indicate how they plan 
to implement the recommendations? What furth er objectives does SADC pursue in terms of 
regional integration?  
 
 The findings of the Mid-Term Review (MTR) we re considered by SADC trade and industry 
structures culminating in a August 2005 Ministers’ meeting at which most of the recommendations were adopted and implementation has been an  ongoing process since then.  Key among the 
recommendations was the review of SADC rules of or igin to which negotiations at experts level have 
reached consensus on most tariff lines with the outs tanding areas, mainly textiles and clothing, due for 
consideration in May (2007) at what is expected to be the last of the experts meetings.  Revised rules 
of origin are expected to be adopted by Ministers of Trade ahead of the August 2007 SADC Council meeting.  A SADC Extra-Ordinary Summit conve ned in October 2006 to consider measures to 
accelerate the SADC economic integration agenda, gave  impetus to the process when it directed that 
Mid-Term Review recommendations be expediti ously implemented.  A progress report will be 
presented to the August 2007 Co uncil and Summit meetings. 
 
 The SADC Regional Indicative Strategic De velopment Plan envisages the creation of a 
Customs Union in 2010 and beyond that a Common Market.  Immediate objectives are the effective implementation of the Free Trade Area and creat ion of the envisaged SADC Customs Union. 
Preparations with regards to the later have comme nced with the constitution of a Customs Union Task 
Force, consideration of a draft Road Map and commissioning of studies to inform the process. 
 
5. Could the Parties elaborate on the initiati ves towards policy harmonisation with other 
regional integration organisations, in particular with COMESA?  
 
 A formal structure for cooperation exists in  the form of the COMESA-EAC-SADC Tripartite 
Task Force which is constituted at Heads of organisations level and has two subcommittees on 
Customs and Trade and on Infrastructure.  The next  meetings of the sub-committees and Task Force 
are set for Zanzibar from 25-29 May.  A previous Customs and Trade sub-committee meeting agreed to draw up a plan of action for harmonisation in  a number of areas including NTBs, FTA tariff 
elimination, rules of origin, treatment of sens itive products, safeguards, trade remedies, Customs 
Declaration Document, valuation, Customs Union timeframes, Common Tariff Nomenclature, Common External Tariff, competition policy, trade in  services, SPS and standards.  A joint trade and 
customs drafting team will meet to draw up details for submission to the 25-29 May Task Force meeting.  Any action plans agreed by the Task For ce will be subject to discussion and endorsement by 
the respective structures of the three organisations .  Harmonised programmes are already taking place 
is some areas including NTBs where through coor dination work by the Regional Trade Facilitation 
Programme, the three organisations are working join tly on using the same reporting form and system.  
 
Import duties and charges, and quantitative restrictions 
 
6. Paragraph 11 states that "the Parties undertake to adopt policies and measures to  
eliminate all existing NTBs to intra-SADC trad e, and not to introduce new ones".  Could the 
Parties indicate how they intend to tackle the gradual elimination of NTBs and how they will 
ensure full transparency in the process? Wo uld the Parties eliminate their NTBs in a 
coordinated and harmonised fashion? How they en visage ensuring the non-introduction of new 
NTBs? Which would be, if any, the role of the SADC Secretariat in this process?  
 
An NTB monitoring mechanism, agreed to at  a workshop attended by business, trade and 
customs officials in November 2006 was approved by the SADC TNF in April 2007 and has been recommended for adoption by Ministers.  Even prior to the expected adoption by Ministers, Members  WT/REG176/5 
 Page 3 
 
 
  agreed to complete the proposed Action Plan templa te for elimination of NT Bs using recently revised 
NTB inventory reports compiled for all Member s except DRC and Madagascar (which will be 
undertaken in the near future).  The Secretariat will play a key role in the arbitration process as well as 
ensuring that the measures reported in the Action Pl an templates are followed through and that the 
resuscitated SADC Sub-Committee on Trade Facilitation which will be tasked with handling NTB 
issues, is kept active in this regard.  
 
Rules of origin 
 
7. Footnote 30 of the factual presentation not es that "According to the Parties the current 
rules of origin regime is undergoing chang es and SADC members are currently submitting 
proposals on the issue".  Could the Parties explain what the state of play of the ongoing review is? Do the Parties aim at making thei r Rules of Origin less restrictive?   
 
 Consultations on rules have been conducted th rough ad-hoc experts’ group meetings and 
consensus has been reached on most tariff lines.  A key outstanding area is textiles and clothing where 
consultations are centred on the issue of possible granting of single-stage transformation to selected tariff lines.  As was indicated earlier above, the last  of these meetings is scheduled for this May and 
thereafter the SADC TNF will submit proposals to Senior Officials and Trade Ministers who are 
expected to adopt the revised origin rules ahead of the August 2007 SADC Council meeting. 
 
8. What are the regional improvements SADC  intends to do regarding regional 
cumulation?  
 
 From the consultations taking place on rules of origin, no changes are envisaged to the current 
provisions on regional cumulation provided for in the Protocol on Trade.  
 9. Could the Parties describe ho w multiple memberships to various trade agreements are 
affecting internal harmonisation of rules of origin within SADC members? 
 
 SADC product specific Rules of Origin are evid ently different from any of the rules applied 
by the other regional bodies although we note conve rgence in the current COMESA consultations on 
setting alternative rules for specific products.  Ho wever a key determinant to consensus in SADC’s 
rules of origin review or any review of product sp ecific rules, is not so much the issue of multiple 
membership, but rather the extent to which each Part y for its own interest and that of its producers, 
would want to use rules as a protective instrument against greater competition within the integration 
area. 
 
Export duties and charges, and quantitative restrictions  
 10. Could the Parties confirm whether any export  duty or restriction has been applied by 
any Member?   
 
 The Protocol on Trade requires Members not to impose any such restrictions on products 
destined to another Member (Articles 5 and 8).  Th e Protocol however also provides (Article 9) for 
general exceptions to the rule and in the instances th at such restrictions apply, this has been for food 
security purposes.    11. Could the Parties define their position re garding the use of export restrictions and 
export bans?  
 
 SADC is about the free movement of goods and services within the region and development 
of a platform for competitive engagement at global level.  Export restrictions would not be responsive WT/REG176/5 
Page 4  
 
  to this goal and if enacted it will be out of necessity usually to mitigate short term production 
instability. 
 
SPS measures  
12. Could the Parties provide further information regarding the current state of play of the 
discussions on harmonization of legislation? Which products have been covered in these discussions?  Which other products may become the object of discussions? harm seed reg system – ministers for adopt  
 So far work has been carried out in the area of seed where draft harmonized regulations have 
been agreed upon and now await approval from S ADC Ministers of Agriculture to facilitate 
implementation.  Work on SPS harmonization has however not progressed much due to delays in finalizing an overall SPS Annex to the Protocol on Trade which is due for consideration by a 
reconvened Coordinating Committee on Sanitary and Phytosanitary Measures and Technical Barriers 
to Trade [CC-SPS/TBT], a joint body of SADC food and agriculture, trade and health structures 
which is due to meet in early June 2007.   
 
13. Could the Parties elaborate on the state of play of the discussions on equivalence? 
Which products have been covered in these discussions?  
 
 The same response provided earlier above with respect to the overall SADC SPS framework applies to this area. 
 
Customs-related procedures  
 
14. Paragraph 50 states that "the Parties will encourage the use of computerized data 
processing".  Could the Parties elaborate on the roadmap set out for this purpose and the 
progress made so far by each Party? If any, coul d the Parties indicate which problems do they 
encounter in this undertaking?  
 
 All SADC countries except for Lesotho an d Swaziland are on varying data processing 
systems notably ASYCUDYA, TIMS, CAPE, etc.  Plan s to set up computer data processing system 
for Lesotho and Swaziland are at advanced stages.   The main problem encountered is one of 
connectivity between the computer systems.  The SADC Customs Modernisation Project, which is to 
commence implementation during the second half of 2007, is amongst other things, earmarked to 
address this problem.  The project will also deve lop an IT support centre to be responsible for 
problem solving and exchange of IT information amongst Customs Authorities.   
 
15. Could the Parties elaborate on the current state of play of customs cooperation? Have 
the Parties made progress regarding the level of  interconnectivity between the administrations? 
If the Parties have encountered major problems, which are they and how the Parties intend to 
solve them?  
 
 The SADC Sub-Committee on Customs Coopera tion meets regularly has developed a number 
of instruments and taken decisions to enhance customs cooperation in SADC.  Recently the SCCC 
developed a model MoU on mutual and administrative assistance for Members to sign on to at bilateral level.  The major problem encountered is the one of delayed im plementation of approved 
instruments.  16. Have customs procedures been fully harmon ised? Do SADC members apply the same 
customs legislation and documentation? If not, could the Parties elaborate on the current state 
of play and the steps to be taken in order to  simplify and harmonize customs procedures?  WT/REG176/5 
 Page 5 
 
 
   SADC is working towards the full harmonisa tion of customs procedures and has in that 
regard developed a Model Customs Act, a draft Common Tariff Nomenclature, common rules of 
origin regulations and common transit regulations amongst other instruments. 
 
17. It is stated that the Parties "undertake to adopt the Harmonized System and to 
incorporate their laws provisions from intern ational customs and transport conventions". 
Could the Parties indicate whether SADC legislat ion is based upon international standards, and 
if so, under which ones? Could the Parties conf irm whether the Harmonized System has been 
fully adopted?   
 
 The Harmonised System has been adopted by a ll SADC members and most have migrated to 
HS 2007.  The approved SADC Common Tariff Nomenc lature is also now compliant to the 2007 HS 
amendment.  The draft SADC Model Act is b ased on the Revised Kyoto Convention whilst the 
regional transit framework is based on the Istanbul Convention.  
 18. When is the SADC Model Customs Act expected to be adopted?  
 
 The SADC Model Customs Act will, as recommended  by Ministers of Trade, be presented to 
Ministers of Finance for adoption during their meeting this May 2007. 
 
Questions from the United States 
 
 
Import duties 
 
19. Pursuant to Art. 7 of the Protocol, the parties may apply a quota system. 
• What disciplines are applied to th e application of these quotas?   
• Are the quotas limited to intra-SADC trade?  
• Are any such quotas currently in place?  On what products? 
• Please explain the basis for such quotas und er the FTA in light of the general   
prohibition on such quantitative restrictions under GATT Article XI.   
 
 Quotas are currently applied to trade in s ugar as an interim measure with market access 
provided on a non-reciprocal basis for SADC preferential sugar exports (on a quota basis) into the 
SACU market.  The long-term objective of the suga r arrangement (Annex VII) is to establish full 
liberalization of intra-SADC trade in sugar afte r the year 2012 depending on a positive review of 
conditions prevailing in the world sugar market.  
 Quotas also apply to products of HS chapters 50 to 63 exported to SACU by least developing 
country members of SADC, i.e. Malawi, Moza mbique, Tanzania and Zambia (MMTZ), which 
comply with the set of rules of origin set out in the optional column (4) of the list in Appendix I to 
Annex I of the Protocol.  These optional rules prov ide for single stage transformation for items of 
textiles and clothing and are derogation from the double stage transformation applicable to manufactured products of HS Chapters 50 to 63.  This  arrangement was due to terminate at the end of 
July 2006 but has been extended to end in December 2009.   
  These preferential quotas are limited to intra-SADC trade and any exports above the quota 
levels  are subject to the applicable MFN tariffs in  the case of sugar and in the case of textile and 
clothing from MMTZ countries, have to meet d ouble stage transformation to qualify for SADC 
preferential tariffs.  The non LDC non-SACU SADC countries, i.e. Mauritius and Zimbabwe, are not 
covered by the SACU-MMTZ Arrangement and their manufactured textile and clothing exports have 
to meet the double transformation.  WT/REG176/5 
Page 6  
 
   The quotas, being preferential are perfectly provi ded for under Article 7 of the Protocol.  Our 
understanding of Article XI of the GATT is that it governs the application of quantitative restrictions 
applied to trade conducted on an MFN basis and not to preferential trade. 
 
20. Liberalization among the SADC members has begun, with the exception of Angola 
and Madagascar.  
• What is the status of Angola’s and Madagascar’s participation in the liberalization 
efforts of the SADC Trade Protocol?  When are they expected to begin tariff reductions?   
 
 Angola has now acceded to the Protocol but is  still to present its tariff offer for negotiation. 
Once its tariff offer has been accepted by the othe r parties, will it be in a position to deposit an 
Instrument of Implementation.  Angola will present its offer once it feels it is ready to implement 
obligations under the Protocol and the process of  preparing such an offer is still underway. 
Madagascar has acceded to the Protocol on Trade a nd has also presented a tariff offer on elimination 
of tariffs on all SADC trade by the year 2012.  The offer was accepted for implementation by 
SADC Ministers of Trade in October 2006 subject to  finalisation of consultations sought by some 
countries on improvement of the offer on specific tari ff lines.  Consultations with Namibia are still to 
be finalised and once this is done, hopefully before the August 2007 SADC Council meeting, 
Madagascar’s Instrument of Implementation will be accepted and it can commence implementing its 
tariff offer and also receive concessions from other Members.    21. According to paragraph 14 of the Factual Presentation, by the end of the 
implementation period, Mauritius will have elim inated duties on 100 per cent of tariff lines on 
imports from both SADC members and South Afri ca, but on only 96.4 per cent and 89.7 per 
cent of trade flows on imports from SADC membe rs and South Africa, respectively.  Similarly, 
according to paragraph 17 of the Factual Presenta tion, by the end of the transition period, 
Zambia will have eliminated duties on 100 p er cent of tariff lines (to imports from both 
SADC members and South Africa), but on only 89. 2 per cent and 91.9 per cent of trade flows 
from SADC members and South Africa, respectively. 
• Please explain how duties can be eliminated on 100 per cent of tariffs lines but less 
than 100 per cent of trade flows. 
  The mismatch in liberalization analysis based  on tariff lines and trade data projections was 
discussed at some length in correspondence between the WTO and the SADC Secretariat during compiling the Factual Presentation and the problem is  alluded in the footnotes where it is correctly 
stated as follows:  “Some SADC members have upgrad ed [their] offers to HS 2002 which has created 
some difficulty with regard to the status of impl ementation and matching the original tariff offer with 
the new coding system.  Tariff schedules used for calculations in the factual presentation are the 
original (HS 1996) schedules, unless otherwise stated .  Given the change from HS1996 to 2002, some 
trade data (based on HS 2002) was unmatched with the HS-96 tariff schedules.  In these instances an 
attempt was made to match trade and tariffs at the HS six-digit level.  The percentages for tariff line 
liberalization presented [in the Factual Presentation] ar e slightly overstated, since in some cases there 
was trade, but no corresponding tariff line.  On the other hand, the percentages of trade liberalized 
presented in this section are slightly understated, since the figures are expressed as a percentage of all 
trade including unmatched tariff lines”.      WT/REG176/5 
 Page 7 
 
 
  22. Overall, the Trade Protocol establishes an ambitious agenda for liberalization among 
the Parties.  With the exception of Tanzania’s  liberalization of tariff lines on imports from 
South Africa (81.3 per cent), all other parties to the Protocol have eliminated tariffs on over 98 per cent of tariff lines.  However, it appears th at some Parties continue to protect important 
products with significant trade volumes.  For exam ple, Zimbabwe has eliminated tariffs on only 
73.7 per cent of imports from SADC members and only 79.8 per cent of imports from 
South Africa.  Similarly, Mozambique has elimin ated tariffs on only 81.6 per cent of imports 
from South Africa; Malawi has eliminated ta riffs on only 84.3 per cent of imports from 
SADC members and only 87.7 per cent of imports from South Africa.   
• Do the parties, especially Zimbabwe, Mala wi and Zambia, have any plans to extend 
duty-free treatment to additional tariff lines?  
 
• How do these low percentages of duty-free trad e meet the “substantially all the trade” 
test of GATT Art. XXIV?   
 
 Discussions within the SADC TNF regarding th e fast tracking of sensitive list products and 
possible review of the exclusion lists are still going on. 
 
 Regarding the second part of the question, Pa rties to the SADC Protocol on Trade note that 
there is a continuing debate and that there are di fferent interpretations besetting the “substantially all 
trade” provision of GATT Art. XXIV.  The reference to “low percentages of duty-free trade” if it 
relates to the state of trade flows after 2008 and la ter 2012 would not be accurate in light of problems 
alluded to earlier regarding projections based on matching current data to the offers.  For better 
appreciation of this, we have appe nded below the original statistical analysis on the offers done by 
UNCTAD at implementation and where at that time there was no mismatch between trade data and the original tariff offers.  The analysis indicates much higher trade projecti ons and coverage under the 
Protocol.  SADC is undertaking an audit of the im plementation of the SADC Protocol on Trade and it 
should reveal the extent Members’ implementation of their tariff reduction offers is consistent with 
their original offer schedules both in terms of tariff lines covered and tariff rates implemented. 
Members would be expected to take corrective me asures in gazetting their subsequent tariff reduction 
schedules starting with the one for 2008.  Analysis  of trade data after that should provide better 
indication of the actual trade coverage of the Protocol on Trade.   
In conclusion the following are the facts:  
  As of January 2006 SACU tari ffs attained zero rate for all tariff lines except for 27 category C 
lines covering automotive sector products.    The rest of the SADC members are set to attain FTA status by Jan 2008.  
 
 Sensitive products are mainly in areas of security, health and safety and constitute an 
estimated 15 per cent and with their elimination by 2012, well over 90 per cent of SADC trade is 
expected to be at zero by 2012.  
 
    
  WT/REG176/5 
Page 8 ANALYSIS BY UNCTAD OF THE DIFFERENTIATED OFFERS M ADE BY SADC MEMBERS (EXCLUDING OFFERS TO RSA) 
Number of products [HS 6-digit] Imports from SADC (excl. RSA) Coverage (%) 
Country 
Total Free    
in 
2000 Free    
in 
2008 Free    
in 
2012 Sensitive Excluded Total Free      
in 2000 Free         
in 2008 Free         
in 2012 Sensitive Excluded Free      
in 
2000 Free     
in 
2008 Free       
in 
2012 Sensit. Excl. 
Malawi 5,443 1,819 4,646 5,423 777 20 93,238 46,662 82,296 93,238 10,942 0 50.0 88.3 100.0 11.7 0.0 
Mauritius 5,479 3,804 4,959 5,479 520 0 8,858 6,454 7,734 8,858 1,124 0 72.9 87.3 100.0 12.7 0.0 
Mozambique 5,246 1,578 4,929 5,227 299 19 363,202 92,218 312,998 363,171 50,437 31 25.4 86.2 100.0 13.9 0.0 
SACU 7,804 4,940 7771∗ - 33 33 632,518 484,129 617318* - 4,068 15,200 76.5 97.6∗ - 0.6 2.4 
Tanzania 6,215 1,076 5,382 6,172 790 43 28,482 4,056 24,785 28,482 3,697 0 14.2 87.0 100.0 13.0 0.0 
Zambia 6,066 3,236 5,816 6,066 251 0 86,222 38,340 75,805 86,222 10,417 0 44.5 87.9 100.0 12.1 0.0 
Zimbabwe 7,167 2,195 6,672 7,075 410 89 167,752 78,576 132,991 145,455 12,475 22,286 46.8 79.3 86.7 7.4 13.3 
 
                                                      
∗ For SACU the year 2006 applies instead of 2008. 
 
  
   WT/REG176/5
 Page 9ANALYSIS BY UNCTAD OF THE GENERAL OFFERS  MADE BY SADC MEMBERS TO SOUTH AFRICA 
Number of products Imports from RSA Coverage (%) 
Country 
Total Free    
in 2000 Free    
in 2008 Free    
in 2012 Sensitive Excluded Total Free in 
2000 Free in 
2008 Free in 
2012 Sensitive Excluded Free 
in 2000 Free 
in 2008 Free       
in 2012 Sensit. Excl. 
Malawi 5,443 1,816 4,621 5,423 803 20 162,262 60,330 135,245 162,171 26,927 91 37.2 83.3 99.9 16.6 0.1 
Mauritius 5,479 3,804 4,959 5,479 520 0 268,104 173,505 234,673 268,104 33,431 0 64.7 87.5 100.0 12.5 0.0 
Mozambique 5,246 1,475 4,857 4,857 370 19 344,612 73,567 252,937 252,937 91,644 31 21.3 73.4 73.4 26.6 0.0 
Tanzania 6,216 965 5,270 6,173 903 43 94,255 8,667 82,764 94,246 11,482 9 9.2 87.8 100.0 12.2 0.0 
Zambia 6,066 1,948 5,812 6,066 254 0 370,054 84,949 319,722 370,054 50,332 0 23.0 86.4 100.0 13.6 0.0 
Zimbabwe 5,957 2,298 5,169 5,898 751 34 779,129 161,783 547,305 702,211 159,838 75,362 20.8 70.2 90.1 20.5 9.7 
 
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