eBusiness Weekly
Golden Sibanda
Zimbabwe has secured permission from Sadc to apply for special derogation (exemption) to defer compliance with some of the regional body’s trade rules, which requires it to phasedown prescribed tariffs on members’ exports, as it still needs to address policy, health and safety issues on the products.
This comes as the country has also dispatched a team of trade experts to the regional body to interrogate certain changes to the framework for derogation on sensitive trade issues, which Harare says were implemented without its knowledge.
Industry and Commerce Minister Mike Bimha told Business Weekly in an interview this week that the country had secured permission from Sadc to seek special derogation, after twice deferring compliance, the last being 2012. He would not say the length of the duration of derogation sought, stressing he was currently concerned with the principles.
While Zimbabwe managed to remove customs duties or tariffs under Categories A and B, constituting about 87 percent of the tariff lines under its tariff phase down commitments, the Competition and Tariff Commission recently said it could not fully implement the phase down under Category C (sensitive products).
As such, it said the country had applied for special derogation from implementing the phase down pursuant to Article 3.1 (C) of the Sadc Trade Protocol, which states that: “Member States that have been adversely affected by the removal of tariffs . . . may be granted a grace period to afford them additional time for the elimination of tariffs and NTBs (non-tariff barriers).”
Special derogation would allow the Southern African country to include products falling under more than five tariff lines in the application for special exemption from duties when exported to Zimbabwe from the Sadc region.
Dr Bimha said the country was yet to comply with only 15 percent out of over 1 000 tariff lines members countries that were required to phase down duty on exports from the region, which aimed at promoting trade among member states.
The industry minister said the tariff lines in question, which it was yet to phase down, related to products either not permitted in Zimbabwe as a matter of Government policy or for which their safety implications were an issue.
“Zimbabwe has complied on 85 percent of the tariffs lines, which is not far from what others have done. But there is a certain percentage that remains, 15 percent. One of the reasons is that we cannot not reduce any of the duties for various reasons; one of it is that we have a GMO policy and we will not allow GMO products into our country, that is a policy issue,” the minister said.
Minister Bimha said the other reason for the derogation related to products where there were phytosanitary issues, for which Zimbabwe retained the sovereign right to deciding whether they should be allowed to enter its territory.
Phytosanitary concerns maybe issues relating to, or being measures for the control of plant diseases especially in agricultural crops, Minister Bimha said: “Other products have phytosanitay and sanitary regulations that they must conform to and need to pass our tests. So you find a number of such products on the 15 percent that the country is yet to comply with,” the minister said.
“Then there is a few, which you find on the SI 64 of 2016.
As such, we have explained to Sadc the issues and the facts and we have right to apply for derogation. We were given the exemption twice, but without our knowledge, there were certain amendments in rules for derogation, where they now say you can only apply if you require it for less than five products.”
“What it means is that we were pushed out, which is unfair, so we said as a result, there were two things we could do; applying for special derogation; or alternatively, we had to push for amendments to the rules.
So they have allowed us to do a special derogation application, which we will do next year.” The Southern African country had earlier applied for a two year derogation ending in 2012 and hoped then to have completed the tariff phase down process for the Category C products by December 2014, but is yet to fully comply.
The Competition and Tariff Commission said this was largely due to the fact that Zimbabwe was still tackling its economic challenges, including cushioning fragile industry, hence the need for the extension of the derogation, the major concern related to the country’s policy position on the matter.
The Sadc Council of Ministers of Trade gave Zimbabwe green light to apply for a special dispensation for derogation/exemption from the outstanding tariffs.
The Sadc Protocol on Trade includes specific undertakings for removal of trade tariff barriers in the form of tariff phase down commitments by member states.
Category A of the tariff phase down commitments focused on immediate liberalisation of tariff lines with low duties to zero percent from date of implementation. Category B sought gradual tariff phase down on goods to zero percent from 2000 to 2008. Category C looks at sensitive goods or products to industrial or agricultural product duties that were to be phased down from 2009 to 2012.
These include meat, fruits, dairy produce, vegetables, beverages, footwear, tobacco, cereals, ceramic products, paper and paper products, soap, wood and its articles, sugar and a range of mineral products.
Category E phasedown covers goods such as firearms and ammunition. As such, Sadc said Zimbabwe applied for derogation from implementing the phase down pursuant to Article 3.1 (C) of the SADC Trade Protocol, which states that: “Member States that have been adversely affected by the removal of tariffs . . . may be granted a grace period to afford them additional time for the elimination of tariffs and NTBs (non-tariff barriers),” according to the CTC.
