WORLD TRADE  
ORGANIZATION  TN/MA/W/92 
29 October 2007 
 (07-4658) 
Negotiating Group on Market Access Original:   English 
  
 
MARKET ACCESS FOR NON-AGRICULTURAL PRODUCTS 
 
Communication from the Southern African Customs Union (SACU) comprising 
 
Botswana, Lesotho, Namibia, South Africa, and Swaziland  
 
 
 The following communication, dated 25 October 2007, is being circulated at the request of the Southern African Customs Union (SACU) compri sing Botswana, Lesotho, Namibia, South Africa, 
and Swaziland.  
_______________ 
 
 1. Botswana, Lesotho, Namibia, South Afri ca and Swaziland are members of the Southern 
African Customs Union (SACU), which is the long est surviving customs union in the world. The 
SACU Member States are all developing countries w ith differentiated levels of development. Whilst 
SACU shares a Common External Tariff (CET), pecu liarities of the group include issues affecting 
Lesotho, a Least Developed Country, (LDC), Bots wana, Namibia and Swaziland which are Small and 
Vulnerable Economies (SVEs) and South Africa, a developing country. The New SACU Agreement 
of 2002 envisions deeper integrati on in order to mitigate these and ot her challenges, including through 
the development of common policies in the areas of  industry, agriculture and competition among 
others.  
 2. As individual Members of the WTO and now  being a notified regional grouping, SACU 
undertook deep cuts in the Uruguay Round of Negotiati ons, considerably reducing their bound rates to 
almost half the average for developing countri es and are therefore not in the same position as 
comparable developing countries. Notwithstanding sustained economic reform s and unilateral tariff 
liberalization since 1994, applied rates for a numbe r of our most sensitive sectors remain relatively 
high with very little “water” in the ta riff to absorb further deep cuts.  
 3. Against this background, and in order to find a constructive and equitable solution to the 
issues we have raised, we reiterate the core mandate and principles underpinning the NAMA 
negotiations as agreed in Doha, elaborated in th e July Framework Agreement (2004), concretized at 
the Hong Kong Ministerial Conference (2005) and furt her elaborated by the Chairman in his Draft 
Text on NAMA Modalities (2007). These include:   
• That the needs and interests of developing countries are at the centre of the Round; 
• “To reduce, or as appropriate, eliminate tariff s, including the reduction or elimination of 
tariff peaks, high tariffs, and tariff escalation, as well as NTBs, in particular on products 
of export interest to developing countries ” (our emphasis ); 
• “To take fully into account the special needs and interests of develo ping country and least 
developed country participants, including through Less Than Full Reciprocity  (LTFR) in 
reduction commitments”; and 
• Paragraph 24 of the Hong K ong Declaration that requires “comparability of ambition” in 
agricultural market access and NAMA, so that  the coefficients for the formula in NAMA TN/MA/W/92 
Page 2  
 
  for developing and developed countries r esult in average tariff percentage cuts 
comparable to the cuts in Agriculture. 
 4. These mandates and core principles provide th e context for the negotiations on the central 
elements of the Formula, Coefficient and Flexib ilities. The principle of Less Than Full Reciprocity  
(LTFR) is particularly important, as it requires that developed countries do more
 than developing 
countries in reduction commitments.  5. In this context SACU notes with concer n that the Chairman’s Draft Text on NAMA 
Modalities, of July 2007 has not adequately a ddressed our situation of a Customs Union whose 
membership includes a developing country, three SVEs and an LDC. 
 6. SACU believes that the Chairman’s curre nt Draft Text will present challenges for the 
economies of the region. SACU Me mbers are deeply concerned at the potential negative effects of 
current proposals emanating from the Chairman’s current Draft Text. High rates of unemployment 
will make any deep tariff cuts in its most sensitive sectors extremely costly in social and political as 
well as economic terms. The cuts could also forecl ose industrial policy objectives particularly for the 
SVEs. Notwithstanding the potential benefits of capitalizing on redu ced tariffs on critical products 
which serve as input for further industrialization, SACU advocates a balanced approach in the NAMA 
Modalities.  
7. We note the highly constrained flexibilities for developing countries under the July 2004 
Framework. Paragraph 7 of the Draft Te xt on NAMA Modalities proposes implementing the 
proposals not yet agreed in the July Framework in terms of which developing countries, which are subjected to the Swiss formula cut can exempt 5% of  their tariff lines from the formula cut so long as 
that does not account for more than 5% of their NAMA imports, or
 they may apply 50% of the 
formula cut on 10% of lines so long as that do es not account for more than 10% of their NAMA 
imports.   8. We further note that LDCs are exempt fro m taking any tariff cut obligations under both the 
July Framework and the Draft Text on NAMA Moda lities as detailed in paragraphs 14 to 16 of the 
latter document. Additionally, SACU recognizes the fl exibilities extended to SVEs according to their 
bound tariff averages as reflected in paragraph 13 of the Draft NAMA Text.   
 9. Paragraph 24 of the Hong Kong Declaration ca lls for proportionality between the level of 
ambition in Agriculture and NAMA. It theref ore precludes unfair negotiating proposals which 
demand that developing countries reduce their applied industrial tariffs dramat ically while developed 
countries make comparatively minor reductions in Agriculture.  
 10. SACU firmly believes that the spread betw een coefficients for developed and developing 
countries should be as such that the critical principl e of LTFR is maintained. An appropriate spread in 
coefficients which will allow fulfillment of the pr inciple of LTFR must be coupled with additional 
flexibilities for developing countries.  
 
11. Cognisant of the interests of SACU and in providing each member with the opportunity to 
equitably benefit from the Doha Development Round , SACU needs additional flexibilities in terms of 
a higher number of tariff lines and larger trade coverage in order to address our specific developmental needs.   
12. While SACU’s commitment to a successful  conclusion of the Doha Development Round 
remains unshakeable, capacity challenges and adjustment  costs of tariff cuts need to be taken into 
account. SACU therefore proposes that capacity bu ilding measures be explicitly detailed in the 
NAMA Text.  TN/MA/W/92 
 Page 3 
 
 
  13. Taking cognisance of the above issues, partic ularly those of adjustment concerns, SACU 
believes that a longer implementation period is vital for equitable benefits from the Doha 
Development Round. As such SACU advocates for an implementation period of not less than ten (10) years. 
 
__________