By Catherine Sasman
WINDHOEK
The trade balance of the Southern African Customs Union (SACU) favours South Africa because the union’s other members import more from South Africa, says trade advisor Wallie Roux.
In an article published in the South African-based Business Day of August 6, titled Geekonomics, Matthew Stern and Frank Flatters assert that Botswana, Lesotho, Namibia and Swaziland – the so-called BLNS countries – “depend on SACU for an extremely high proportion of total revenue and most of this revenue comes from customs duties on imports”.
The two calling themselves ‘geeks’ further write that the South African Government believes that the four BLNS countries “are getting too much money for doing too little”.
“It [the South African Government] would like to see a large proportion of this revenue reclassified as ‘development assistance’ and managed accordingly,” the two claim.
The article goes on to say that the BLNS maintains that the size of these payments is fair compensation for the “cost-raising” and “polarization” effects of SACU membership.
“The cost-raising argument is based on the premise that the SACU tariff protects South African industries at the expense of SACU customers,” Stern and Flatters write.
“Our analysis suggests that in the absence of SACU, the BLNS would have to raise their own tariff duties substantially to collect the same amount in customs duties and that the ‘cost-raising’ impact is in fact cost-reducing for consumers in these countries.”
The two further suggest that they have found a “clear pattern of increasing or decreasing polarization among SACU member states”, arguing “without a doubt, the current revenue sharing distribution provides excessive compensation from SA to the BLNS”.
But, said Roux, since February South Africa was allowed as a full member of the SADC-EPA configuration, thus preserving the legal integrity of SACU according to the 2002 Agreement.
The “geeks”, said Roux, fail to show the other side of the coin, arguing that under the current pressure to conclude the SADC-EPA (economic partnership agreements) by the end of this year, the capacities of the BLNS countries are being stretched to the limit.
Part Eight of the SACU 2002 Agreement covers the area of common policies between member states.
Article 38 of the agreement refers to the Industrial Development Policy and the desire of the member states to “develop common policies and strategies” in this regard. However, said Roux, it was reported in August that South Africa had at the beginning of August launched its industrial policy.
“Despite the provisions of the SACU Agreement, South Africa went ahead and developed an industrial policy applicable to the whole SACU. If, according to the geeks the South African Government still believes that the BLNS is getting too much for doing too little whilst misconstruing the SACU Agreement, maybe then they should pay for their blunder,” said Roux.
Article 39 of the SACU Agreement refers to cooperation on agricultural policies “in order to ensure the coordinated development of the agricultural sector within the Common Customs Area”.
“I would like the geeks to illustrate one example where this has happened, except where BLNS countries are taking ad hoc measures and trying to justify it with South Africa in order to have such measures implemented for whatever reasons it may be. There is no coordinated development, only justification and acceptance within bounds,” said Roux.
Again Article 41 of the agreement refers to competition policies that should be instituted in each member state, and that member states should “cooperate with each other with respect to the enforcement of competition laws and regulations”.
It is only in South Africa where competition policies are already functional, while the BLNS countries are still in the process of introducing theirs. However, said Roux, the process is still far from the stage of cooperation between member states.
“I just wonder how within a customs union five different competition boards could have jurisdiction in five different territories without a supra national body as a supreme watchdog,” said Roux.
He said the absence of an annex to the agreement dealing with unfair trade practices would in essence render the competition boards in the BLNS countries ‘toothless’ in terms of international competition vis-???_?_’???_?’???_?