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Sacu Free Trade Agreements

By
12 abril 2021

SACU is increasingly engaged in bilateral free trade agreements with foreign trading partners, not least because it constitutes a single customs offence with South Africa as a force economy: negotiations to launch a free trade agreement (FTA) between the United States and the five members of the Southern African Customs Union (SACU) (Botswana Lesotho, Namibia, South Africa and Swaziland) began on 3 June 2003. In April 2006, negotiators suspended the Free Trade Agreement negotiations and launched a new work programme to strengthen trade and investment relations with a free trade agreement as a long-term goal. A possible free trade agreement would eliminate tariffs over time, reduce or eliminate non-tariff barriers, liberalize trade in services, protect intellectual property rights and provide technical assistance to help SACU countries achieve the objectives of the agreement. This potential agreement would be subject to congressional approval. This report will be updated during the negotiations. In Article 27, the contracting parties confirm that they will endeavour to broaden the scope of this agreement in order to further liberalize trade in services. The trade agreement between the South African Customs Union (SACU) and the European Free Trade Association (EFTA) is a free trade agreement signed in 2006 and entered into force on 1 May 2008. It comprises 9 countries: 4 are EFTA members (Iceland, Liechtenstein, Norway and Switzerland) and 5 are saCU members (Botswana, Lesotho, Namibia, South Africa and Swaziland). The aim of the agreement is to deepen relations between the parties, create favourable conditions for trade and promote economic integration and social development in SACU Member States, with the support of EFTA. SACU is the Second largest trading partner of the United States in Africa, after Nigeria, whose exports are almost exclusively petroleum products. In total, SACU is the 33rd largest trading partner of the United States. Imports from SACU amounted to $10.0 billion in 2007, an increase of 33% over 2005 and an increase of 169% over 19974.

Major U.S. exports to the region include aircraft, automobiles, computers, medical devices, construction machinery and agricultural machinery. The 2007 trade deficit with SACU was $4.4 billion. The interesting thing about the statistics is that trade flows are relatively reciprocal — Africa sells to China a little less than what China sells to Africa. In 2017, Angola was the largest exporter to China, followed by South Africa and the Republic of Congo. In contrast, South Africa was the largest buyer of Chinese products, followed by Nigeria and Egypt. As you can see, China has put in place diplomatic and tax incentives to encourage African companies to trade with China, which remains a market that wants to consume. African products are welcome in China and there is huge growth potential. Trade in agricultural commodities is covered by bilateral agreements between each EFTA state and SACU. These agreements, which are part of the free trade area`s instruments, are also asymmetrical and allow SACU to improve preferential treatment in EFTA markets, beyond existing preferential regimes.

(Agricultural agreement between Iceland and SACU, agricultural agreement between Norway and SACU and agricultural agreement between Switzerland and SACU). As part of the agreement, the parties grant and guarantee adequate, effective and non-discriminatory protection of intellectual property rights (patents, copyrights, commercial drawings, undisclosed information, geographical indications) and guarantee the application of these rights against infringements (counterfeiting, piracy).

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