A critical assessment of the Zimbabwe–South Africa import licensing dispute

• Author: Clive Vinti
• DOI: 10.10520/EJC-19c15afd24
• Published date: 03 December 2019
• Date: 03 December 2019
• Record Number: sapr1_v34_n1_a2
• Pages: 1-29

Article

Southern African Public Law

https://doi.org/10.25159/2522-6800/2959

https://upjournals.co.za/index.php/SAPL

ISSN 2219-6412 (Print) | 2522-6800 (Online)

Volume 34 | Number 1 | 2019 | #2959 | 29 pages

© Unisa Press 2019

A Critical Assessment of the Zimbabwe–South Africa

Import Licensing Dispute

Clive Vinti

Lecturer of law at the University of the Free State

vintic@ufs.ac.za

Abstract

The gravamen of the dispute between Zimbabwe and South Africa is the

introduction by Zimbabwe of an import-licensing regime for various goods

through Statutory Instrument 64 of 2016 (‘the Instrument’). Zimbabwe alleges

that the Instrument is primarily aimed at protecting local industries and

alleviating balance of payment challenges. Consequently, this article assesses

the legality of the Zimbabwe import-licensing regime implemented primarily

against goods from South Africa by examining the grounds of justification

proffered by Zimbabwe. The article contends, first, that the Instrument is a

quantitative restriction that violates Articles XI.1 and XIII of the General

Agreement on Tariffs and Trade (GATT). Secondly, the article argues that the

Instrument falls foul of the WTO Agreement on Import Licensing Procedures

in that the administration of the measure is unduly burdensome and goes beyond

the extent necessary. Thirdly, the article contends that the Instrument fails to

fulfil the requirements for a valid ‘safeguard measure’ in the manner

contemplated by Article XIX of GATT and the Agreement on Safeguards. In

the alternative, the article argues that the urgency of the situation in Zimbabwe

is such that any delay would cause irreparable damage and therefore entitles

Zimbabwe to exercise the right to implement safeguard measures. Lastly, the

article contends that the Instrument is substantially in line with the ‘balance of

payments’ exception as postulated by the Understanding on the Balance of

Payments Provisions of the General Agreement on Tariffs and Trade 1994 and

GATT.

Keywords: import licensing; quantitative restrictions; safeguards; balance of

payments

2

Introduction

The gravamen of the dispute between Zimbabwe and South Africa is the introduction

by Zimbabwe of an import licensing regime for various goods through the Statutory

Instrument 64 of 2016 (the Instrument).

1

The Instrument operates as a new import-

licensing regime on various goods. The promulgation of the Instrument is provided for

by the Control of Goods Act, which authorises the president or the relevant minister to

introduce measures for the control of imports or exports into Zimbabwe of any goods

or class of goods.

2

The products cited as requiring import licences include, inter alia,

coffee creamers, camphor creams, baked beans, cereals, bottled water, mayonnaise,

vegetables, yoghurts, ice cream, cheese, dairy juice blends, peanut butter, jam and beds.

3

The Instrument will particularly affect women, who constitute the majority of informal

cross-border traders.

4

It is estimated that internal cross-border trade contributes nearly

half of the total intra-Southern Africa Development Community (SADC) trade.

5

In essence, Zimbabwe alleges that the Instrument is a valid import-licensing regime

meant to curb the importation of goods which are already being produced in Zimbabwe

and that their importation has exacerbated unemployment, reduced investment into the

Zimbabwean economy and resulted in balance of payments challenges.

6

Zimbabwe also

contends that the Instrument is an interim measure whose main purpose is to revive the

local industry and it is not open-ended but time-bound and sector-specific, with the

expectation that the local industry will retool and address production inefficiencies

during the period.

7

In short, Zimbabwe contends that the Instrument constitutes valid

1

Zimbabwe Statutory Instrument 64 of 2016

<http://www.mic.gov.zw/index.php/downloads/category/3-import-and-export-requirements>

accessed 6 August 2016, read with s 3 of the Control of Goods Act Chapter 14:05

<http://www.vertic.org/media/National%20Legislation/Zimbabwe/ZW_Control_of_Goods_Act.pdf>

accessed 22 September 2016 and the Control of Goods (Import and Export) (Commerce)

Regulations, 1974 <http://www.tradebarriers.org/ntm/measures/view/874> accessed 5 August 2016.

2

Section 3 of the Control of Goods Act Chapter 14:05

<http://www.vertic.org/media/National%20Legislation/Zimbabwe/ZW_Control_of_Goods_Act.pdf>

accessed 26 June 2016.

3

See Statutory Instrument 64 of 2016.

4

Jean-Guy Afrika and Gerald Ajumbo, ‘Informal Cross Border Trade in Africa: Implications and

Policy Recommendations’ (2012) 4/3(10) Africa Economic Brief

<http://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/Economic%20Brief%20%20I

nformal%20Cross%20Border%20Trade%20in%20Africa%20Implications%20and%20Policy%20Re

commendations%20-%20Volume%203.pdf> accessed 2 August 2016 at 4.

5

Afrika and Ajumbo (n 4) 4.

6

Mike Bimha, ‘Statutory Instrument 64 of 2016 (SI 64.2016) is not an import ban’ The Sunday Mail

(10 July 2016) <http://www.sundaymail.co.zw/si-64-2016-is-not-an-import-ban/> accessed 10

August 2016.

7

Mike Bimha, ‘Press Statement by the Honourable MC Bimha (MP) Minister of Industry and

Commerce on the recently Gazetted Statutory Instrument 64 of 2016 in terms of Control of Goods

Act [Chapter 14:05]’ (2016)

<http://www.tralac.org/images/Discussions/Zimbabwe_Ministry_of_Industry_and_Commerce_Press

_statement_22_June_2016.pdf?utm_source=Weekly+tralac+Newsletter&utm_campaign=c4d9086cf