The Southern African Customs Union (SACU) is a

customs union A customs union is generally defined as a type of trade bloc which is composed of a free trade area with a common external tariff.GATTArticle 24 s. 8 (a) Customs unions are established through trade pacts where the participant countries set up ...

among five countries of

Southern Africa Southern Africa is the southernmost subregion of the African continent, south of the Congo and Tanzania. The physical location is the large part of Africa to the south of the extensive Congo River basin. Southern Africa is home to a number o ...

Botswana Botswana (, ), officially the Republic of Botswana ( tn, Lefatshe la Botswana, label= Setswana, ), is a landlocked country in Southern Africa. Botswana is topographically flat, with approximately 70 percent of its territory being the Kal ...

Eswatini Eswatini ( ; ss, eSwatini ), officially the Kingdom of Eswatini and formerly named Swaziland ( ; officially renamed in 2018), is a landlocked country in Southern Africa. It is bordered by Mozambique to its northeast and South Africa to its no ...

Lesotho Lesotho ( ), officially the Kingdom of Lesotho, is a country landlocked as an enclave in South Africa. It is situated in the Maloti Mountains and contains the highest mountains in Southern Africa. It has an area of over and has a population ...

Namibia Namibia (, ), officially the Republic of Namibia, is a country in Southern Africa. Its western border is the Atlantic Ocean. It shares land borders with Zambia and Angola to the north, Botswana to the east and South Africa to the south and ea ...

and

South Africa South Africa, officially the Republic of South Africa (RSA), is the southernmost country in Africa. It is bounded to the south by of coastline that stretch along the South Atlantic and Indian Oceans; to the north by the neighbouring coun ...

. Its

headquarters Headquarters (commonly referred to as HQ) denotes the location where most, if not all, of the important functions of an organization are coordinated. In the United States, the corporate headquarters represents the entity at the center or the to ...

are in the Namibian capital,

Windhoek Windhoek (, , ) is the capital and largest city of Namibia. It is located in central Namibia in the Khomas Highland plateau area, at around above sea level, almost exactly at the country's geographical centre. The population of Windhoek in 202 ...

. It was established in 1910.

History

The SACU is the oldest existing customs union in the world. The first customs union in the area was established in 1889 between the British

Cape Colony The Cape Colony ( nl, Kaapkolonie), also known as the Cape of Good Hope, was a British colony in present-day South Africa named after the Cape of Good Hope, which existed from 1795 to 1802, and again from 1806 to 1910, when it united with ...

and the Boer republic of the

Orange Free State The Orange Free State ( nl, Oranje Vrijstaat; af, Oranje-Vrystaat;) was an independent Boer sovereign republic under British suzerainty in Southern Africa during the second half of the 19th century, which ceased to exist after it was defeat ...

. In 1891

British Bechuanaland British Bechuanaland was a short-lived Crown colony of the United Kingdom that existed in southern Africa from its formation on 30 September 1885 until its annexation to the neighbouring Cape Colony on 16 November 1895. British Bechuanaland h ...

and

Basutoland Basutoland was a British Crown colony that existed from 1884 to 1966 in present-day Lesotho. Though the Basotho (then known as Basuto) and their territory had been under British control starting in 1868 (and ruled by Cape Colony from 1871), t ...

joined, followed by

Bechuanaland Protectorate The Bechuanaland Protectorate () was a protectorate established on 31 March 1885, by the United Kingdom of Great Britain and Ireland (later the United Kingdom of Great Britain and Northern Ireland) in Southern Africa. It became the Republic ...

in 1893 and

Natal NATAL or Natal may refer to: Places * Natal, Rio Grande do Norte, a city in Brazil * Natal, South Africa (disambiguation), a region in South Africa ** Natalia Republic, a former country (1839–1843) ** Colony of Natal, a former British colony ( ...

in 1899. Parallel to this process, the Boer republic of the

South African Republic The South African Republic ( nl, Zuid-Afrikaansche Republiek, abbreviated ZAR; af, Suid-Afrikaanse Republiek), also known as the Transvaal Republic, was an independent Boer Republic in Southern Africa which existed from 1852 to 1902, when i ...

and

Swaziland Eswatini ( ; ss, eSwatini ), officially the Kingdom of Eswatini and formerly named Swaziland ( ; officially renamed in 2018), is a landlocked country in Southern Africa. It is bordered by Mozambique to its northeast and South Africa to its n ...

(then a protectorate of the South African Republic) formed a customs union in 1894. Southern African Customs Union (1903 to present)

Following the

Second Boer War The Second Boer War ( af, Tweede Vryheidsoorlog, , 11 October 189931 May 1902), also known as the Boer War, the Anglo–Boer War, or the South African War, was a conflict fought between the British Empire and the two Boer Republics (the So ...

, and the establishment of British control over the Boer republics, the Southern African Customs Union was formed in 1903 with the signing of a new Convention and replaced the previous arrangements. It consisted of Cape Colony (to which British Bechuanaland had been annexed in 1895), Basutoland, Bechuanaland Protectorate, Natal,

Orange River Colony The Orange River Colony was the British colony created after Britain first occupied (1900) and then annexed (1902) the independent Orange Free State in the Second Boer War. The colony ceased to exist in 1910, when it was absorbed into the Union ...

(the former Orange Free State),

Transvaal Colony The Transvaal Colony () was the name used to refer to the Transvaal region during the period of direct British rule and military occupation between the end of the Second Boer War in 1902 when the South African Republic was dissolved, and the ...

(the former South African Republic), and

Southern Rhodesia Southern Rhodesia was a landlocked self-governing colony, self-governing British Crown colony in southern Africa, established in 1923 and consisting of British South Africa Company (BSAC) territories lying south of the Zambezi River. The reg ...

. Swaziland joined in 1904 and

North-western Rhodesia North-Western Rhodesia, in south central Africa, was a territory administered from 1891 until 1899 under charter by the British South Africa Company. In 1890 the British South Africa Company signed a treaty with King Lewanika of the Barotse, one ...

joined in 1905. In 1906 another convention was signed which superseded the 1903 agreement and retained all of the previous members.''Brief Chronology of Customs Southern Africa, 1855-1979'' by Derek J. Hudson, Botswana Notes and Records, Vol. 11
/ref> In its current configuration it was established in 1910 pursuant to a Customs Union Agreement between the

Union of South Africa The Union of South Africa ( nl, Unie van Zuid-Afrika; af, Unie van Suid-Afrika; ) was the historical predecessor to the present-day Republic of South Africa. It came into existence on 31 May 1910 with the unification of the Cape, Natal, Tr ...

and the High Commission Territories of Bechuanaland,

and

. Southern Rhodesia and North-western Rhodesia (later to become Northern Rhodesia after 1911) had declined to join the 1910 Agreement but did maintain a common tariff and free trade arrangements with South Africa and the High Commission Territories (with some variations and exceptions) from 1910 until 1935. An attempt was made in 1949 to re-establish a customs union between South Africa and Southern Rhodesia, but it ultimately failed to do so. With the advent of independence for the High Commission territories, the agreement was updated and, on 11 December 1969, it was relaunched as the SACU with the signing of an agreement between the

Republic of South Africa South Africa, officially the Republic of South Africa (RSA), is the southernmost country in Africa. It is bounded to the south by of coastline that stretch along the South Atlantic and Indian Oceans; to the north by the neighbouring countr ...

and

. The updated union officially entered into force on 1 March 1970. After

's independence from South Africa in 1990, it joined SACU as its fifth member, although it had been effectively a part of the customs union from the time of its conquest by South Africa in 1915 (with the situation formalized in 1921 with arrangements between South Africa and the

South West Africa South West Africa ( af, Suidwes-Afrika; german: Südwestafrika; nl, Zuidwest-Afrika) was a territory under South African administration from 1915 to 1990, after which it became modern-day Namibia. It bordered Angola (Portuguese colony before 1 ...

). Historically SACU was administered by South Africa, through the 1910 and 1969 Agreements. The customs union collected duties on local production and customs duties on members' imports from outside SACU. As of 2007, the Executive Secretary of the SACU was Tswelopele C. Moremi. The current ES is Paulina Mbala Elago, a Namibian national who assumed her duties in this portfolio on 1 April 2014 for a period of five years.

Member states

Functions and organisation

The union meets annually to discuss matters related to the Agreement. In addition, the Customs Technical Liaison Committee, the Trade and Industry Liaison committee and the Ad hoc Sub-Committee on Agriculture each meet three times a year. Its aim is to maintain the free interchange of goods between member countries. It provides for a

common external tariff A common external tariff (CET) must be introduced when a group of countries forms a customs union. The same customs duties, import quotas, preferences or other non-tariff barriers to trade apply to all goods entering the area, regardless of which ...

and a common excise tariff to this common customs area. All customs and excise collected in the common customs area are paid into South Africa's National Revenue Fund. The revenue is shared among members according to a revenue-sharing formula, as described in the agreement. South Africa is the custodian of this pool. Only the BLNS Member states' shares are calculated, with South Africa retaining the residual. SACU revenue constitutes a substantial share of the state revenue of the BLNS countries.

Developments and structure

Following the formation of the Government of National Unity in South Africa in April 1994, member states concurred that the existing agreement should be renegotiated to democratise SACU and address needs of the SACU member states more effectively. With this in mind, the Ministers of Trade and Industry of the five member states met in

Pretoria Pretoria () is South Africa's administrative capital, serving as the seat of the executive branch of government, and as the host to all foreign embassies to South Africa. Pretoria straddles the Apies River and extends eastward into the foothi ...

on 11 November 1994 to discuss the renegotiation of the 1969 agreement. The Ministers appointed a Customs Union Task Team (CUTT), which was mandated to make recommendations to the Ministers. CUTT has met on numerous occasions in the member states, and declares that good progress has been made in the renegotiation process. At a meeting of Ministers of Trade and Finance Departments from the SACU member states, held in Centurion, Pretoria on 5 September 2000, the Ministers reached consensus on the principles underpinning institutional reform in the SACU. The institutional administrative structure of the revenue pool was agreed as follows: :;Council of Ministers: Consisting of one minister from each SACU member state, it would be the supreme SACU decision-making body and would meet quarterly. The decisions taken by this council would only be by consensus. :;Commission: An administrative body composed of senior officials, three technical liaison committees and an established Agricultural Liaison Committee. :;Tribunal: An independent body of experts. It would report directly to the Council of Ministers. The tribunal would be responsible for tariff-setting and the anti-dumping mechanism. :;Secretariat: Responsible for day-to-day operations of the pool. It would be funded from the revenue pool. Its location would be determined by senior officials who were directed to meet after one month to develop proposals for the implementation of the revised SACU institutional structure. SACU ministers further agreed that the revenue share accruing to each member state should be calculated from three basic components: * a share of the customs pool; * a share of the excise pool; and * a share of a development component. By agreement, these components would be distributed as follows: * The customs component, allocated according to each country's share of total intra-SACU trade, including re-exports. * The excise component, net of the development component, allocated on the basis of GDP. * The development component, fixed at 15% of the total excise pool and distributed to all SACU members in an inverse proportion to each country's GDP/capita. While SACU entered into a free trade deal with the four-nation

European Free Trade Association The European Free Trade Association (EFTA) is a regional trade organization and free trade area consisting of four European states: Iceland, Liechtenstein, Norway and Switzerland. The organization operates in parallel with the European U ...

on 1 July 2006, its negotiations with the United States for a

free trade agreement A free-trade agreement (FTA) or treaty is an agreement according to international law to form a free-trade area between the cooperating states. There are two types of trade agreements: bilateral and multilateral. Bilateral trade agreements occ ...

have stalled (as of 8 January 2008). SACU is involved in negotiations for a free trade agreement – the Economic Partnership Agreements (EPAs) – with the EU, and the organisation corresponded with the

EU Trade Commissioner The European Commissioner for Trade (sometimes referred to as the ''EU Trade Commissioner'') is the member of the European Commission responsible for the European Union's common commercial policy. Responsibilities The Commissioner heads up the ...

, Karel De Gucht, between February and March 2010, to request that the EU not demand ratification and implementation of the EPAs at the next round of negotiations without the concerns of the SACU countries being addressed. De Gucht replied that he would like to "invite the SADC EPA countries concerned to swiftly complete signature, notification and implementation of the interim EPA" and that "in the meantime, the EU is more than willing to address all pending issues and concerns."

Comparison with other regional blocs

References

External links

*
Explanatory website from the South African government

''Agritrade'' website covering trade issues in southern Africa
{{Authority control Organizations established in 1910 Organisations related to Southern Africa Customs unions Southern African Development Community Foreign relations of South Africa Intergovernmental organizations established by treaty Foreign trade of South Africa 1910 establishments in Africa