30-551: The Southern African Customs Union ( SACU ) is a customs union among five countries of Southern Africa : Botswana , Eswatini , Lesotho , Namibia and South Africa . Its headquarters are in the Namibian capital, Windhoek . It was established in 1910. The SACU is the oldest existing customs union in the world. The first customs union in the area was established in 1889 between the British Cape Colony and
60-693: A free trade agreement have stalled (as of 8 January 2008). SACU is involved in negotiations for a free trade agreement – the Economic Partnership Agreements (EPAs) – with the EU, and the organisation corresponded with the EU Trade Commissioner , Karel De Gucht , between February and March 2010, to request that the EU not demand ratification and implementation of the EPAs at the next round of negotiations without
90-690: A revenue-sharing formula, as described in the agreement. South Africa is the custodian of this pool. Only the BLNS Member states' shares are calculated, with South Africa retaining the residual. SACU revenue constitutes a substantial share of the state revenue of the BLNS countries. Following the formation of the Government of National Unity in South Africa in April 1994, member states concurred that
120-481: Is composed of a free trade area with a common external tariff . Customs unions are established through trade pacts where the participant countries set up common external trade policy (in some cases they use different import quotas ). Common competition policy is also helpful to avoid competition deficiency . Purposes for establishing a customs union normally include increasing economic efficiency and establishing closer political and cultural ties between
150-498: Is gradually completed over a period of time, it should be completed within a reasonable period, which generally does not exceed 10 years. The exclusive protection measures of the Customs Union mainly include the following: Economic effects of customs unions can generally be grouped into static effects and dynamic effects . There are trade creation effects and trade diversion effects. The trade creation effect refers to
180-404: Is greater than the transfer effect, the combined effect of joining the Customs Union on the member countries is net profit, which means an increase in the economic welfare level of the member countries; otherwise, it is a net loss and a decline in the economic welfare level. The trade creation effect is usually regarded as a positive effect. This is because the domestic production cost of country A
210-481: Is higher than the production cost of country A 's imports from country B. The Customs Union made Country A give up the domestic production of some commodities and change it to Country B to produce these commodities. From a worldwide perspective, this kind of production conversion improves the efficiency of resource allocation . The customs union will not only bring static effects to member states, but also bring some dynamic effects to them. Sometimes, this dynamic effect
240-509: Is more important than its static effect, which has an important impact on the economic growth of member countries. (UK-CD) Additionally, the autonomous and dependent territories such as some of the EU member state special territories are sometimes treated as separate customs territories from their mainland states or have varying arrangements of formal or de facto customs union, common market and currency union (or combinations thereof) with
270-561: The Zollverein , which was established in 1834, and gradually developed and expanded, was a customs union organization that appeared earlier and played a role in promoting German economic development and political unification at that time. Before the establishment of the unified German Empire in the 1870s, there were checkpoints between and within the German states, which hindered the development of industry and commerce. In 1818, Prussia took
300-549: The 1910 Agreement but did maintain a common tariff and free trade arrangements with South Africa and the High Commission Territories (with some variations and exceptions) from 1910 until 1935. An attempt was made in 1949 to re-establish a customs union between South Africa and Southern Rhodesia, but it ultimately failed to do so. With the advent of independence for the High Commission territories,
330-458: The Ad hoc Sub-Committee on Agriculture each meet three times a year. Its aim is to maintain the free interchange of goods between member countries. It provides for a common external tariff and a common excise tariff to this common customs area. All customs and excise collected in the common customs area are paid into South Africa's National Revenue Fund. The revenue is shared among members according to
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#1732775249223360-496: The All-German Customs Union. The contents of the alliance convention included: abolishing internal tariffs, unifying external tariffs, raising import tax rates, and allocating tariff income to all states in the alliance in proportion. In addition, there is a customs union between France and Monaco, which was established in 1865. A customs union was established by Switzerland and Liechtenstein in 1924, by Belgium,
390-758: The Boer republic of the Orange Free State . In 1891 British Bechuanaland and Basutoland joined, followed by Bechuanaland Protectorate in 1893 and Natal in 1899. Parallel to this process, the Boer republic of the South African Republic and Swaziland (then a protectorate of the South African Republic) formed a customs union in 1894. Following the Second Boer War , and the establishment of British control over
420-601: The Boer republics, the Southern African Customs Union was formed in 1903 with the signing of a new Convention and replaced the previous arrangements. It consisted of Cape Colony (to which British Bechuanaland had been annexed in 1895), Basutoland, Bechuanaland Protectorate, Natal, Orange River Colony (the former Orange Free State), Transvaal Colony (the former South African Republic), and Southern Rhodesia . Swaziland joined in 1904 and North-western Rhodesia joined in 1905. In 1906 another convention
450-411: The Customs Union is that the member countries have not only eliminated trade barriers and implemented free trade , but also established a common external tariff. In other words, in addition to agreeing to eliminate each other's trade barriers, members of the Customs Union also adopt common external tariff and trade policies. GATT stipulates that if the customs union is not established immediately, but
480-594: The Ministers. CUTT has met on numerous occasions in the member states, and declares that good progress has been made in the renegotiation process. At a meeting of Ministers of Trade and Finance Departments from the SACU member states, held in Centurion, Pretoria on 5 September 2000, the Ministers reached consensus on the principles underpinning institutional reform in the SACU. The institutional administrative structure of
510-805: The Netherlands, and Luxembourg in 1948, by the countries of the European Economic Community in 1958, and by the Economic Community of Central African States in 1964. At that time, the European Free Trade Association was different from the European Economic Community Customs Union . Free trade within the former was limited to industrial products, and no uniform tariffs were imposed on countries outside
540-603: The SACU was Tswelopele C. Moremi. Paulina Mbala Elago, a Namibian national, became executive secretary on 1 April 2014 for a period of five years. Thabo David Khasipe was appointed as executive secretary on 1 February 2023. (km) The union meets annually to discuss matters related to the Agreement. In addition, the Customs Technical Liaison Committee, the Trade and Industry Liaison committee and
570-475: The Union. It was brought into action by the initiative of Prussia and joined by most of the German states. Pre- modern conditions ( 30+ currencies, trade barriers etc.) were viewed as an obstacle as obstacles to o economic exchange and growth by the new commercial classes, who argued for the creation of a unified economic territory allowing the unhindered movement of goods, people and capital. The main feature of
600-473: The agreement was updated and, on 11 December 1969, it was relaunched as the SACU with the signing of an agreement between the Republic of South Africa , Botswana , Lesotho and Swaziland . The updated union officially entered into force on 1 March 1970. After Namibia 's independence from South Africa in 1990, it joined SACU as its fifth member, although it had been effectively a part of the customs union from
630-406: The benefits generated by products from domestic production with higher production costs to the production of customs union countries with lower costs. The trade diversion effect refers to the loss incurred when a product is imported from a non-member country with lower production costs to a member country with a higher cost. This is the price of joining the customs union. When the trade creation effect
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#1732775249223660-467: The concerns of the SACU countries being addressed. De Gucht replied that he would like to "invite the SADC EPA countries concerned to swiftly complete signature, notification and implementation of the interim EPA" and that "in the meantime, the EU is more than willing to address all pending issues and concerns." Customs union A customs union is generally defined as a type of trade bloc which
690-457: The existing agreement should be renegotiated to democratise SACU and address needs of the SACU member states more effectively. With this in mind, the Ministers of Trade and Industry of the five member states met in Pretoria on 11 November 1994 to discuss the renegotiation of the 1969 agreement. The Ministers appointed a Customs Union Task Team (CUTT), which was mandated to make recommendations to
720-560: The lead in abolishing the customs duties in the mainland; it was followed by the establishment of the North German Customs Union in 1826. Two years later, two customs unions were established in the states of South Germany. In 1834, 18 states joined to form the German Customs Union with Prussia as the main leader. Thereafter, this alliance was further expanded to all German-speaking regions and became
750-633: The mainland and in regards to third countries through the trade pacts signed by the mainland state. The European Union is a customs union and therefore sets a common external tariff. BLNS Countries BLNS Countries is a term used to describe Botswana , Lesotho , Namibia and Eswatini (formerly Swaziland) collectively. The term is mostly used in the context of the Southern African Customs Union to refer to those members with less economic and political power than South Africa . This Namibia -related article
780-741: The member countries. It is the third stage of economic integration . Every economic union , customs and monetary union and economic and monetary union includes a customs union. The General Agreement on Tariffs and Trade , part of the World Trade Organization framework defines a customs union in the following way: (a) A customs union shall be understood to mean the substitution of a single customs territory for two or more customs territories, so that (i) duties and other restrictive regulations of commerce (except, where necessary, those permitted under Articles XI, XII, XIII, XIV, XV and XX) are eliminated with respect to substantially all
810-463: The revenue pool was agreed as follows: SACU ministers further agreed that the revenue share accruing to each member state should be calculated from three basic components: By agreement, these components would be distributed as follows: While SACU entered into a free trade deal with the four-nation European Free Trade Association on 1 July 2006, its negotiations with the United States for
840-538: The time of its conquest by South Africa in 1915 (with the situation formalized in 1921 with arrangements between South Africa and the South West Africa ). Historically SACU was administered by South Africa, through the 1910 and 1969 Agreements. The customs union collected duties on local production and customs duties on members' imports from outside SACU. As of 2007, the Executive Secretary of
870-408: The trade between the constituent territories of the union or at least with respect to substantially all the trade in products originating in such territories, and, (ii) subject to the provisions of paragraph 9, substantially the same duties and other regulations of commerce are applied by each of the members of the union to the trade of territories not included in the union; The German Customs Union,
900-467: Was signed which superseded the 1903 agreement and retained all of the previous members. In its current configuration it was established in 1910 pursuant to a Customs Union Agreement between the Union of South Africa and the High Commission Territories of Bechuanaland , Basutoland and Swaziland . Southern Rhodesia and North-western Rhodesia (later to become Northern Rhodesia after 1911) had declined to join
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