Facilitating trade and strengthening market access in the southern African customs union: A focus on South Africa’s customs reform

• Jurisdiction: South Africa
• Published date: 10 June 2021
• Author: Amid, V.T.
• Citation: (2020) 32 SA Merc LJ 309
• Date: 10 June 2021
• DOI: https://doi.org/10.47348/SAMLJ/v32/i3a1
• Pages: 309-333

Articles

FACILITATING TRADE AND

STRENGTHENING MARKET ACCESS IN THE

SOUTHERN AFRICAN CUSTOMS UNION:

A FOCUS ON SOUTH AFRICA’S CUSTOMS

REFORM*

VICTOR T AMADI

†

Postdoctoral Research Fellow, Centre for Comparative Law in Africa,

University of Cape Town

PATRICIA LENAGHAN

‡

Associate Professor, Department of Mercantile and Labour Law,

University of the Western Cape

Abstract

In the modern business environment, emphasis is placed on timely

production, requiring timely delivery and fast and predictable release

of goods at the borders. Experiencing delays in the supply chain of

goods increases transaction costs, which can, in consequence, raise the

price of export and import products. South Africa is a developing state

that needs to be competitive on every front to secure economic growth

considering the current push towards the African Continental Free

Trade Area (AfCFTA). This article aims to tackle the issue of

non-tariff barriers to trade, particularly restrictive customs and

administrative procedures at border crossings in the Southern region,

by exploring trade facilitation measures which can be crucial for

integration and development. Trade facilitation regulates

behind-the-border measures and encompasses reform of a country’s

*This article is based on Victor Tamunoseipiriala Amadi ‘Customs reform as a means of

enhancing trade facilitation for increased market access: A South African perspective’

(unpublished LLM dissertation, University of the Western Cape, 2016).

†

LLB LLM LLD (Western Cape).

‡

BLC LLB (Pret) LLM LLD (Western Cape).

309 https://doi.org/10.47348/SAMLJ/v32/i3a1

(2020) 32 SA Merc LJ 309

© Juta and Company (Pty) Ltd

customs policies and infrastructure as customs operations can be

characterised by a complex array of requirements for traders, including

documentation requirements. This article accordingly examines how

South Africa is evolving its customs environment to facilitate trade

further and to enhance market access of goods into the country and the

Southern region. South Africa has adopted a Custom Modernisation

Programme (CMP) under the guidance of the South African Revenue

Services (SARS). The adoption of this programme can potentially

reduce the delays in trade transactions at border points.

IBACKGROUND AND INTRODUCTION

International trade is one activity that is carried out by all countries to

different degrees, since no country is so self-suff‌icient that it can put up

barriers and ignore the rest of the world. International trade can,

however, only materialise when one trading country has the required

market access which is secure and predictable. It can be argued,

therefore, that international trade cannot exist without access to the

domestic markets of trading countries.

1

Increased international trade

can generate economic growth.

2

To better reap the benef‌its of trade, less

restrictive market access is vital, especially within an integrated setup,

like the Southern African Customs Union (SACU)

3

acustoms territory

of which South Africa is a member. SACU is a customs union (CU)

arrangement, notif‌ied under the World Trade Organisation (WTO). It is

an international organisation with legal personality

4

as it is an exception

to the Most Favoured Nation (MFN)

5

rule of the General Agreement on

Tariffs and Trade (GATT). A customs union is simply an arrangement

between two or more neighboring countries to remove trade barriers,

reduce or eliminate customs duties or quotas between the participating

States, and maintain a common external tariff to third party States. Such

1

Van Den Bossche, The Law and Policy of the World Trade Organisation 2 ed (Cambridge

University Press 2008) 401.

2

Zanhonogo, ‘Trade and economic growth in developing countries: Evidence from

sub-Saharan Africa’ (2016) 3(1) Journal of African Trade 41 at 42.

3

SACU comprises f‌ive Member States which are Botswana, Eswatini, Lesotho, Namibia,

and South Africa, and, in its present conf‌iguration, has existed since 1910. The SACU

Agreement was adopted in 2002, entered into force in July 2004, and this replaced the 1969

SACU Agreement. See http://www.sacu.int/show.php?id

1

⁄

4

564, accessed on 25 May 2020.

4

Article 4 of the SACU Agreement of 2002 (as amended in 2013).

5

The MFN clause is a fundamental principle entrenched under article 1 of the General

Agreement on Tariffs and Trade (GATT) which requires that any privilege extended by a

member of the WTO to any other WTO member be extended to all WTO members. A

customs union is an exception to this principle and is enabled through article XXIV of the

GATT if the regional trade agreement covers trade in goods.

https://doi.org/10.47348/SAMLJ/v32/i3a1

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© Juta and Company (Pty) Ltd