South Africa has given Zimbabwe until the end of August to respond to its long-standing enquiry regarding the imposition of surcharges on various South African imports, as well as more recent, and more hostile, trade restrictions imposed under Statutory Instrument 64 (SI 64), which has disrupted cross-border trade and led to recent border protests.

South Africa’s Trade and Industry Minister Dr Rob Davies announced the deadline, which coincides with the upcoming Southern African Development Community (SADC) Council for Ministers of Trade meeting on August 24, during a bilateral with Zimbabwe’s Industry and Commerce Minister Mike Bimha in Pretoria on Thursday.

The meeting was convened in a bid to find “an amicable resolution” to the trade dispute, which South Africa says places Zimbabwe in breach of the SADC Trade Protocol, which came into force in 2008. South Africa is equally concerned that the restrictions may be prejudicing SADC exporters to Zimbabwe relative to “extra-regional” exporters and could undermine both the protocol and regional-integration efforts.

South Africa is Zimbabwe’s largest trading partner in the region, having exported over R20-billion of goods to its northern neighbour in 2015. Zimbabwe’s other key trading partners last year included Singapore, China, Zambia and India.

In a briefing following the bilateral – which was not attended by Bimha – Davies said his Zimbabwean counterpart had offered a detailed analysis of the economic factors that had led to the imposition of the trade restrictions.

NO RESPONSE

However, Bimha did not respond directly to South Africa’s formal request that it justify surcharges relating to products covered under 112 of 1 000 tariff lines – a response had initially been expected by South Africa by June 30, but was not forthcoming. He also did not give clarity on the future of the SI 64 restrictions, despite suggesting that they were a temporary measure to help shore up domestic industry amid Zimbabwe’s immediate economic difficulties.

The surcharges, which pre-dated the SI 64 intervention, have been imposed in addition to Zimbabwe failing, since 2012, to phase down certain protections on regional imports in line with the SADC Trade Protocol commitments.

Davies told Bimhe that South Africa was willing to accept restrictions where evidence could be provided that such imports were a threat to Zimbabwe’s domestic manufacturing industries. However, such “derogation” could only be introduced in line with the stipulated procedures of the SADC Trade Protocol.

“If there is to be any variation in the application of those commitments . . . there is meant to be an application to the Council of Ministers of Trade for a derogation. From our point of view, we think it is very important that that procedure is, in fact, followed,” Davies said, adding that the “coherence and integrity of regional trade agreements” remained important.

For South Africa to support Zimbabwe’s proposed deviation, progress would need to be made on the surcharge issue, while greater certainty should also be given on the administration, and durations, of the SI 64 restrictions.

POSITION OF PRINCIPLE

“Our position of principle is that, where a country can show us that they have productive capacity at stake, or where industrialisation efforts are at stake, we will not play hard ball – we will try to find a win-win accommodation. But we also do need, at the same time, to ensure that the preferences given to regional suppliers over extra-regional suppliers continue to be enforced.”

In other words, South Africa wants assurances that any restriction on a regional supplier is not a benefit that flows to suppliers from outside of the continent.

Davies also wants greater “precision” on the application of SI 64, which prevents imports of certain products unless there is a demonstrable shortage in Zimbabwe. “We would also like to have a greater understanding of when and how South African suppliers can use mechanisms to get a permit.”

Davies also indicated that he would be taking “further counsel” from Cabinet on the potential implications of Zimbabwe’s economic difficulties, which went beyond market access and were affecting its capacity to import and the ability of domestic industry to compete.

“These are issues that government as a whole needs to apply its mind, because if the Zimbabwean economy is in trouble, then South Africa will feel the effects of that in a number of ways, including through migration,” Davies said.