The World Trade Organisation (WTO) Trade Facilitation Agreement (TFA) is due to enter into force in 2017, with only 10 WTO member countries that have to ratify it. South Africa and Namibia remain the sole Southern African Customs Union (Sacu) countries that still have to do so, but it seems highly unlikely that South Africa will ratify it. The TFA is most important. Here is what the WTO said: “According to a 2015 study carried out by WTO economists, full implementation of the TFA would reduce members’ trade costs by an average of 14.3%, with developing countries having the most to gain. The TFA also has the ability to reduce the time to import goods by over a day and a half while also reducing time to export by almost two days, representing a reduction of 47% and 91% respectively over the current average.”
Could this be the year in which the Customs Duty Act, 2014 and the Customs Control Act, 2014 enter into force? Be it in part or in totality? It is highly unlikely that both 2014 Acts will enter into force before celebrating 1 000 days since their publication. For the Customs Duty Act, 2014 it would be on 05 April 2017, and for the Customs Control Act, 2014 on 18 April 2017.
With a strong rand, and with a manufacturing sector under pressure, it is anticipated that there could be an increased number of applications for trade remedy measures (dumping, countervailing and safeguards) and increases in the “general” rate of customs duties. This year the International Trade Administration Commission of South Africa (Itac) published nine lists of “Customs tariff applications”. As for the trade remedy applications, it was really the “usual suspects”. Could 2017 see some diversification of products for which trade remedy applications are made? It would be a welcome development if Itac were to update its various trade reports – there’s just one dated 2015. There were none for 2016.
Will the South African Revenue Service (Sars) deliver on all (xviii) of its 2016/2017 “Increased Customs and Excise Compliance Commitments”, even though one is technically for 2017/2018? What will its deliverables for 2017/2018 be, will there be any carry-overs from 2016/2017?
As for Brexit (SADC EPA) and Agoa, it will be interesting to see what potential changes can be made to the agreements. Also, will Mercosur result in increased bilateral trade.
Although the rating agencies have decided to leave South Africa just above “junk” status, a possible change for the worse could impact the rand negatively, which would have the potential of increasing export competitiveness, whilst increasing the cost of imports - and afford manufacturers natural protection.
Expect 2017 to continue where 2016 left off. If anything, expect more uncertainty.