Sacu: the oldest of the RTAs

9th July 2021

By: Riaan de Lange

     

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About 132 years ago, the world’s oldest customs union that is still operational was established – and that’s the South African Customs Union, which brought together the Orange River Colony (previously the Orange Free State) and the Transvaal Colony in 1889. In 1891, Basutoland, which is present-day Lesotho, was admitted as a nonofficial member, with Bechuanaland, now Botswana, joining in 1893.

All this occurred prior to British occupation – in 1902 – which resulted in the dissolution of the South African Republic and the establishment of the South African Union on May 31, 1902. On March 10, 1903, discussions on the establishment of the Southern African Customs Union (Sacu) started, culminating in the signing of the Sacu Agreement on May 6, 12 and 25 as well as on June 3 of that year by the governments of the Cape Colony, the the Colony of Natal, the Orange River Colony, the Transvaal Colony and Southern Rhodesia, which is present-day Zimbabwe. The governor of the Cape Colony also signed on behalf of Basutoland and the Bechuanaland Protectorate. In 1904, Swaziland signed the supplementary protocol to the Sacu Agreement. Then, on May 31, 1910, following the establishment of the Union of South Africa, Basutoland, the Bechuanaland Protectorate, Southern Rhodesia and Swaziland decided not to join the political union. The Sacu Agreement, excluding Southern Rhodesia, came into operation on July 30, 1910.

In May 1919, following the Versailles Conference, South Africa was granted the mandate for South West Africa (present-day Namibia), and the latter became a de facto Sacu member. Around this time, there were two very interesting developments: on November 3, 1923, the League of Nations, the precursor to the United Nations, came into being and, on November 28, 1923, the first Board of Trade and Industries, the predecessor of the International Trade Administration Commission of South Africa, published the findings of its investigation into the dumping of cement products.

Fast-forward to September 30, 1966 – Botswana gains independence from Britain, with Lesotho following suit on October 4, 1966, and Swaziland on September 6, 1968. A consequence of these developments was the coming into being of the Sacu Agreement (1969), which was signed by the governments of the Republic of South Africa, the Republic of Botswana, the Kingdom of Lesotho and the Kingdom of Swaziland on December 11, 1969, and published in the Government Gazette the next day. SACU (1969) came into operation on March 1, 1970. Everything remained unchanged for 20 years – until March 21, 1990 – when Namibia gained independence. This led to the commencement of the negotiations for an updated agreement on November 11, 1994. The new agreement – Sacu (2002), which includes Annex A, the controversial revenue-sharing formula – was signed on October 21, 2002, and entered into force on July 2, 2004; on July 15, 2004, Sacu (1969) was terminated.

Although I did not set out to write a piece on the evolution of Sacu, you will appreciate just how intertwined and ingrained this customs union is with South Africa’s economic history and evolution; most importantly, it is the oldest customs union in the world.

What made me to reminisce about Sacu was that, on June 21, the one-hundredth session of the World Trade Organisation (WTO) Committee on Regional Trade Agreements (CRTA) took place under the chairpersonship of Ambassador Cleopa Kilonzo Mailu of Kenya. The CRTA considers individual regional trade agreements (RTAs) under the Transparency Mechanism for RTAs.

As of June 15, there were 349 RTAs in force, which correspond to 565 notifications from WTO members, when counting goods, services and accessions separately.

You can obtain all you need to know about the RTAs from the WTO ‘Regional Trade Agreement Database’, which provides a wealth of knowledge and is accessible at http://rtais.wto.org/UI PublicMaintainRTAHome.aspx

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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