The ultimate objective of the Southern African Development Community (Sadc) trade protocol is to create an integrated regional market, said former Botswana president Ketumile Quett Masire in March 1996 when Sadc heads of state met in Maseru to approve and sign the protocol on trade.
I imagine it was a momentous occasion for the SA delegation, as then president Nelson Mandela’s signature on that protocol sought to change what one academic called an “alphabet soup” of economic organisations (Sadc, Comesa and so on) and many “tariff walls” and other trade restrictions between and among Southern African nations.
The protocol committed its signatories to a “phased and eventual elimination of import duties” over eight years. It took a bit longer, but anyone reading schedule 1 of the Southern African Customs Union (Sacu) tariff schedule will realise that the Sadc column for most products is still free of duty.
The protocol ensured that member states reserved their rights to use antidumping, safeguard and antisubsidy measures, in line with World Trade Organisation provisions, including recognition of the “policy space” for members to pursue infant industry development.
Under the protocol members committed to not apply “any [new] quantitative import restrictions” and export restrictions and other nontariff barriers. Recent industrial changes in the region risk making discussion about long-standing problems within Sadc quarrelsome. A few examples make the point better.
The first relates to exceptions to these generous commitments under the protocol, either through the “momentary suspension” of obligations (mostly by instituting import bans) by members for infant industry protection, as set out in article 21 of the protocol, or cases such as the sugar market, in which full liberalisation remains elusive.
The second relates to the share of public revenue of member states drawn from customs and other duties in place. Which is also an indicator of fiscal diversification. In most Sadc member states in the period after the 1996 protocol the share of import taxes in total revenue has declined as tariffs were reduced, or removed in some cases.
In Tanzania that share stood at just under a fifth (19.1%), while in SA it was less than 5% (down from nearly 10% in 1989) and in Zambia it stood at about 7% (down from 31.9% in 1991).
Third, in instances in which SA and Sacu firms have used trade instruments to respond to allegations of unfair competition from exporters from other Sadc member countries (outside Sacu), it has raised some complicated but interesting and important questions.
A notice issued in the Government Gazette on February 14 (notice 3002 of 2025) by the International Trade Administration Commission (Itac), after an investigation into allegations of the dumping of baker’s yeasts by a Zimbabwean exporter, indicates the nature of the challenge.
A dominant SA firm alleged (and was able to persuade the commission) that it was experiencing injury arising from dumping (that the price of the yeasts in SA was lower than the comparable price in the country of origin) by a Gweru-based competitor.
Similar risks of import competition (whether fair or unfair) from nearby are likely, arising from investments in key product markets in which SA has an industrial interest. How the SA industrial base, and regulators if necessary, respond to these developments will indicate whether the contradictions that arise from a continental trade liberalisation project such as the African Continental Free Trade Agreement can be managed and resolved within the existing institutions.
In the active yeast antidumping case Itac opted for a recommendation that sought a “constructive remedy”, in line with WTO rules, rather than immediately levying a duty, providing the Zimbabwean exporter an opportunity to revise its pricing policy into the SA market. History will judge whether it was the right decision.
It is a decision that recognises that the pursuit of the integrated market that Masire spoke of in Maseru in 1996 is a long process littered by successes in growing regional trade and overcoming structural imbalances. It also carries with it immediate risks arising from a changing world.
• Cawe is chief commissioner at Itac. He writes in his personal capacity.
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