SA bullies smaller SACU members

The International Trade Administration Commission of South Africa (ITAC), as an interim tariff body of SACU is making it difficult for industries in BLNS countries to prosper, a local industry expert says.

14 March 2018 | Business

“They (South African industries) stated that 4 000 tonnes of Namibian pasta entered their market in 2017. South African consumption in the same period was 65 000 tonnes, therefore the imported Namibian pasta represents only 6.2% of the total pasta market in South Africa,” Koos Ferreira

Ndama Nakashole - Due to its failure to establish a unified tariff board, the Southern African Customs Union (SACU) is still utilising the services of the International Trade Administration Commission of South Africa (ITAC) as the interim tariff body, which makes it difficult for other countries to have a say in the decision-making process over tariffs and rebates.

Because ITAC only reports to the South African ministers of trade and industry and economic development, leaving other SACU ministers out of the process, industries in the BLNS countries (Botswana, Lesotho, Namibia and Swaziland) have no say in reviews of duties or tariffs conducted by ITAC.

These are some of the private-sector challenges pointed out by Namib Mills’ trade liaison specialist, Koos Ferreira, during a SACU information-sharing session on market access held in Windhoek on Monday.

In his presentation titled ‘Challenges Facing the Private Sector In Utilising Trade Agreements Concluded With Third Parties’, Ferreira said there was lack of transparency in ITAC’s decisions.

He said companies in the BLNS countries were at a disadvantage as they had no knowledge of any reviews or investigations before a final decision was announced.

He cited the example of ITAC Report No 542, which was a review of the dollar-based domestic reference price and variable tariff formula for sugar.

Ferreira said the Namibian private sector was never informed of the investigation and only received a final decision and recommendations.

With the exception of South Africa, Namibia is the only other member state that has a harbour that serves as an entry into the SACU market.

“This entry point is continually ignored by ITAC when calculating import parities as well as duties on products coming into the SACU market,” Ferreira said.

He added that the common external tariff, which was aimed at protecting sensitive industries in SACU, was being used mainly to protect South African industries, which were already well established.

Challenges

Other challenges, according to him, are the lack of a tribunal within SACU, as well as unfair trade practices such as South Africa charging lower prices in Namibia than in South Africa, thus killing the market for local products.

Ferreira added that national policies in smaller member states were being ignored by South Africa. He said South African industries received preference when it came to protectionism, thus impeding the BLNS countries’ industrialisation plans. He cited the example of South Africa recently complaining about pasta imports from Namibia as one such preference.

“They (South African industries) stated that 4 000 tonnes of Namibian pasta entered their market in 2017. South African consumption in the same period was 65 000 tonnes, therefore the imported Namibian pasta represents only 6.2% of the total pasta market in South Africa,” he said.

While South Africa complained about Namibian pasta, Ferreira said the southern neighbour’s sugar producers had direct investment in Namibian sugar suppliers, which forced Mamas, a Namibian sugar packer, to close its doors.

In a speech read on his behalf, finance minister Calle Schlettwein said the private sector was the key player in positioning Namibia to benefit from SACU free-trade benefits.

"A robust regional integration strategy needs an enterprising private sector and an active partnership between government and the private sector," said the minister.

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