THE SACU AGREEMENT

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THE SACU AGREEMENT
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• INTRODUCTION
• Customs Union est. in 1910
• gtRSA, Botswana, Lesotho
• Swaziland
• Agreement provided for
• gt Common External Tariff
• gt Free flow of goods
• gt Sharing of revenue

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• THE 1969 AGREEMENT
• Increase in BLS shares
• Compensation for price raising effect
• Industrial Polarisation
• Protection afforded to SA producers
• Compensation factor of 1.42

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• SHORTCOMINGS OF THE 1969 AGREEMENT
• Weak institutions
• Undemocratic decision making
• No dispute settlement mechanism
• Revenue sharing formula not sustainable

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• RENEGOTIATIONS OF SACU AGREEMENT
• Started November 1994
• Three main issues
• gt Revenue sharing formula
• gt Institutional arrangements
• gt Policy

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• DEMOCRATIZATION OF SACU
• Establishment of SACU institutions
• gt Council of Ministers Supreme Decision Making
  Body
• gt Secretariat Administrative function
• gt SACU Tariff Board Deals with tariff changes
• gt Customs Union Commission Deals with policy
  and implementation issues

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• INSTITUTIONS Cont.
• Technical Liaison Committees
• gt Customs
• gt Trade and Industry
• gt Transport
• gt Agriculture
• Tribunal Ad hoc Institution
• gt Adjudicate disputes

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• INSTITUTIONS Cont.
• National Bodies
• gt Established by member states

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• REVENUE SHARING FORMULA
• Three main components
• gt Customs component
• gt Excise component
• gt Development component

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• DETERMINATION OF EXCISE DUTIES
• Finance ministers will determine excise duties
• Management of the Common Revenue Pool
• gt SA will manage the pool for
• two years
• gt Task force to investigate long term
  mechanism