2011 Audit of the Implementation of the SADC Protocol on Trade

The 2011 Audit of the Implementation of the Southern African Development Community (SADC) Protocol on Trade is the fifth such audit carried out by the United States (US) Agency for International Development (USAID) Southern Africa Trade Hub. While the 2007 audit was comprehensive, the following audits have been updates on the 2007 study with each update focusing on different issues selected by the SADC Secretariat. For the 2011 Audit, the SADC Secretariat requested that the Trade Hub focus on three areas:

1. Implementation of the 2011 Tariff Phase Downs: Generally, compliance with the 2011 Tariff Phase Downs was high. The table below provides a summary of the implementation status for individual Member States. Malawi significantly lags in implementation and Zimbabwe and Tanzania have been granted derogations by the Committee of Ministers Responsible for Trade (CMT).

As a companion analysis to the 2011 Audit, the SADC Secretariat commissioned a study on the economic impact of the derogations granted with a particular focus on the smaller SADC economies. The analysis demonstrates that the shares of SADC exports for the goods to the countries granted derogation are a comparatively small proportion of total SADC exports in these categories. Additionally, as the derogations are time limited, any effects are likely to be transient.

2. Non-Tariff Barriers (NTBs): Article 6 of the SADC Protocol on Trade requires Member States to adopt policies and implement measures to eliminate NTBs. NTBs have been widely cited as a significant constraint to intra-SADC trade which have increased in importance as tariff barriers have declined. Currently, all SADC Member States participate in the Tripartite Online NTB Monitoring Mechanism (www.tradebarriers.org). As part of the 2011 Audit, the SADC Secretariat requested that SATH follow up on documentation for the "resolved" complaints in system.

While progress has been made in further development of the system and the resolution of NTBs through the online mechanism over the course of the last year, some concerns remain particularly with the prioritization of NTBs, the clarification of exceptions to the elimination of such measures and the development of national level mechanisms to address the elimination of NTBs systematically.

3. Third Party Preferential Trade Agreements: The SADC Protocol on Trade has set principles to which Member States must adhere when they enter into trade relations both among themselves and with third parties. As part of the 2011 Audit, the SADC Secretariat requested an examination of such preferential trade agreements to assess compliance with the obligations outlined in the Protocol.

All SADC Member States participate in one or more agreements either with other SADC Member States or third countries. The discussion details potential concerns with regards to tariff liberalization and Rules of Origin (ROO). As the former is likely of small concern given the impending completion of SADC tariff phase downs, ROO are perhaps the central issue. Under the terms of many of the agreements, ROO are more favorable than those prevailing under the SADC agreement and as such could be considered a violation of the Most Favored Nation (MFN) principle enshrined in the Protocol.