SADC moves towards a Simplified Trade Regime
by Joseph Ngwawi
Southern African News Features
Studies and experiences from other parts of the world show that the simplification and streamlining of documentation requirements as well as import and export formalities significantly reduces transaction costs associated with trade.
Such measures are particularly important for small-scale cross-border traders who often do not have enough financial resources or human capacity to deal with complex administrative requirements.
Moreover, for small or low-value consignments often channelled by such traders, the costs of complying with complex requirements and formalities can be disproportionate relative to the transaction value.
It is against this background that the Southern African Development Community (SADC) ministers responsible for trade have mandated the SADC Secretariat to develop a Simplified Trade Regime (STR) for intra-SADC trade in accordance with the World Trade Organisation (WTO) Agreement and the Kyoto Convention for the Simplification and Harmonization of Customs Procedures.
Article VIII of the World Trade Organization’s GATT Agreement and provisions of the Revised Kyoto Convention for the Simplification and Harmonization of Customs Procedures suggest the development and implementation of simplified trade procedures for eligible small scale traders to overcome these challenges.
The Secretariat started the process of engaging consultants in January who are expected to develop the STR. The draft proposal to be developed by the consultants will be informed by a best practice and scenario analysis.
In addition, the proposal should be accompanied by a background study document that provides information on the potential impact of a SADC STR in terms of benefitting trade volumes, number of traders and the type of traders, such as their socio-economic position and their gender.
It will then be considered by SADC structures for final approval by the ministers later this year.
According to the terms of reference for the exercise, the consultants are expected to undertake a number of activities as part of the process of developing the SADC STR.
These include conducting a desk study to examine best practices and challenges of existing STRs, in particular the one implemented by the Common Market for Eastern and Southern Africa (COMESA).
The desk study will also look at available data regarding the volumes of formal and informal small-scale trade in the SADC region and the type of traders likely to be affected by the introduction of the STR.
The consultants are expected to conduct study visits to major border posts in Malawi, Mozambique, South Africa, Zambia and Zimbabwe to assess the needs of stakeholders and their preferences regarding a SADC STR.
The assessment will include data collection on the following: the most commonly traded goods and product commonality, affected trade volumes, affected trade values, trade frequency appropriate for the regime on the basis of the other generated data and the profile of the affected traders.
In collaboration with the SADC Secretariat, the consultants will conduct a legal assessment on whether the adoption and implementation of a SADC STR will require an amendment to the SADC Trade Protocol, and if so, provide sample legal text based on relevant international and other regional agreements.
On the basis of the desk study and the study visits and related assessments, and in light of the outcome of the legal assessment, the consultants will be expected to develop a negotiation proposal for a SADC STR, including different scenarios.
These shall include numerous options for thresholds (value/volume of trade eligible under the STR), frequency (timeframe in which the value is assessed), product lists, and documentation requirements.
The proposal by the consultants should also provide a roadmap for national implementation, including guidance for Member States on the legislative arrangements and physical and institutional structures that will need to be established in order to implement the STR.