Technical Report: 2012 Audit Of The Implementation Of The .

2y ago
8 Views
3 Downloads
1.34 MB
102 Pages
Last View : 22d ago
Last Download : 2m ago
Upload by : Philip Renner
Transcription

Technical Report:2012 Audit of the Implementation of the SADCProtocol on TradeSouthern Africa Trade HubSubmitted by:AECOM International DevelopmentSubmitted to:USAID/Southern AfricaJune 2012USAID Contract No. 674-C-00-10-00075-00DISCLAIMERThe author’s views expressed in this publication do not necessarily reflect the views of the United StatesAgency for International Development or the United States Government.PO Box 602090 Plot 50668, Tholo Park, Fairgrounds Gaborone, Botswana Phone (267) 390 0884 Fax (267) 390 1027 info@satradehub.orgwww.satradehub.org

Page intentionally left blank2USAID Southern Africa Trade Hub

TABLE OF CONTENTSACRONYMS . 6ACKNOWLEDGEMENTS . 9EXECUTIVE SUMMARY . 101.2.3.4.INTRODUCTION . 151.1Report Context . 151.2Methodology . 161.3Outline of the Report . 17SADC FTA AND TRADE PATTERNS . 172.1Introduction. 172.2Methodology . 192.3Extra-SADC Trade. 192.4Intra-SADC Trade . 232.4.1Overview . 232.4.2Sectoral Composition of Intra-SADC Trade . 252.5Impact of SADC FTA on Trade Flows in the Region . 282.6Conclusions . 31IMPLEMENTATION OF 2012 TARIFF PHASE-DOWNS . 333.1Introduction. 333.2Overview of Tariff Phase-Down Offers . 333.3Implementation of 2012 Phase-Downs – Audit Results . 353.3.1SACU . 363.3.2Malawi . 363.2.3Mauritius . 373.2.4Mozambique . 393.2.5Tanzania . 393.2.6Zambia . 403.2.7Zimbabwe . 40RULES OF ORIGIN WITHIN THE SADC FTA . 414.1Introduction. 414.2SADC ROO: A Brief Initial History . 424.3Wheat Flour . 444.4Implementation and Administration Issues . 454.5Conclusions . 473USAID Southern Africa Trade Hub

5.NTBs. 485.1Introduction. 485.2Progress on NTBs by Member States . 505.4Conclusions . 636. ANALYSIS OF ANNEX VII OF THE PROTOCOL ON TRADE REGARDING TRADEIN SUGAR AND RELATED COMMODITIES . 647.6.1Introduction. 646.2SADC Production and Exports . 646.3The World Sugar Market . 676.4Arrangements for Trade in Sugar in the SADC Trade Protocol . 686.5Measures Affecting Trade in Sugar in SADC . 696.5.1Tariffs . 696.5.2NTBs . 696.6Intra-SADC trade in Sugar . 706.7The Tripartite FTA . 736.8The Impact of the Protocol on Sugar Trade in the SADC Region . 736.9The Way Forward? . 74CUSTOMS AND TRADE FACILITATION . 757.1Introduction. 757.2Implementation of the SADC Customs Program . 777.2.1Common Tariff Nomenclature (CTN) and Harmonized System . 777.2.2 SADC Transit Management System (TMS) and Regional Transit BondGuarantee (RTBG) . 787.2.3WTO Valuation System . 797.2.4Customs Model Act . 797.3 Customs Cooperation in the Exchange of Information and Prevention of IllicitTrade . 798.9.7.4Skills Development and Capacity Building . 807.5Conclusion. 80ACCESSIONS . 818.1Angola . 818.2DRC. 828.3The Seychelles . 84COMPETITION POLICY . 869.1Introduction. 869.2SADC Cooperation in Competition Law and Consumer Policy . 864USAID Southern Africa Trade Hub

9.3 Enhancing SADC Cooperation and Harmonization on Competition andConsumer Policy. 9110.ASSESSING THE PROGRESS IN BUILT-IN AGENDA OF THE PROTOCOL ONTRADE. 9411.10.1Cross-Border Investment . 9510.2Trade in Services . 9610.3Intellectual Property Rights . 9810.4Trade Development . 99CONCLUSIONS . 101BIBLIOGRAPHY . 1025USAID Southern Africa Trade Hub

ACRONYMSACPAfrica, Caribbean and PacificAGOAAfrican Growth and Opportunities ActASEANAssociation of Southeast Asian NationsBITBilateral Investment TreatyBLNSBotswana, Lesotho, Namibia, SwazilandCETCommon External TariffCMTCommittee of Ministers Responsible for TradeCOMESACommon Market for Eastern and Southern AfricaCOMTRADECommodity Trade Statistics DatabaseCTNCustoms Tariff NomenclatureDFQFDuty Free Quota FreeDGDirector GeneralDRCDemocratic Republic of CongoDTAADouble Taxation Avoidance AgreementsEACEast African CommunityEBAEverything But ArmsECEuropean CommissionEPAEconomic Partnership AgreementEUEuropean UnionFAOFood and Agricultural OrganizationFIPFinance and Investment ProtocolFTAFree Trade AreaGATSGeneral Agreement of Trade in ServicesGDPGross Domestic ProductGIZDeutsche Gesellschaft fur Internationale ZusammenarbeitHSHarmonized SystemIEPAInterim Economic Partnership AgreementIMFInternational Monetary FundIPAInvestment Promotion AgencyIPRIntellectual Property RightsITACInternational Trade Administration CommissionITDInternational Trade DepartmentLDCLeast Developed Country6USAID Southern Africa Trade Hub

LPILogistics Performance IndexMFNMost Favored NationNAFTANorth American Free Trade AreaNAMBOARDNational Agricultural Monitoring BoardNMCNational Monitoring CommitteeNTBNon-Tariff BarriersMOUMemorandum of UnderstandingPTAPreferential Trade AgreementROORules of OriginRTBGRegional Transit Bond GuaranteeSACUSouthern Africa Customs UnionSADCSouthern African Development CommunitySADCTRLCTechnical Regulation Liaison CommitteeSADCTBTSCTechnical Barriers to Trade Stakeholders CommitteeSADCSTANCooperation in StandardizationSCCCSub-Committee for Customs CooperationSARSSouth African Revenue ServiceSATHSouthern Africa Trade HubSDBSwaziland Dairy BoardSMESmall and Medium Sized EnterprisesSPSSanitary and PhytosanitarySPSCCSPS Coordinating CommitteeSQAMStandardization, Quality Assurance, Accreditation and MetrologySQAMEGSQAM Expert GroupSusFarMSSustainable Sugarcane Farm Management SystemTBTTechnical Barriers to TradeTCSTechnical Committee on SugarTDCATrade and Development Cooperation AgreementTIFITrade, Industry, Finance and InvestmentTMSTransit Management SystemTNFTrade Negotiations ForumTPRTrade Policy ReviewTRIPSTrade-Related Aspects of Intellectual Property RightsUHTUltra High TemperatureUNUnited Nations7USAID Southern Africa Trade Hub

USUnited StatesUSAIDUnited States Agency for International DevelopmentVATValue Added TaxWCOWorld Customs OrganizationWTOWorld Trade OrganizationZIMRAZimbabwe Revenue Authority8USAID Southern Africa Trade Hub

ACKNOWLEDGEMENTSThe compilation of the 2012 Audit of the Implementation of Southern African DevelopmentCommunity (SADC) Protocol on Trade has been a collaborative exercise. The SouthernAfrica Trade Hub (SATH) team contributing this report included: Nick Charalambides,Consultant; Nelson Chisenga, Agricultural Economist; Frank Flatters, Consultant; TomaszIwanow, Trade Economist; Albert Makochekanwa, Trade Analyst; James Maringwa, TradeAnalyst; Kathleen Montgomery, Regional Integration Specialist; and Reginald Selelo,Investment Promotion and Foreign Direct Investment (FDI) Specialist.The information on which the Audit is based was collected in conjunction with a largenumber of stakeholders. We would like to extend a sincere thank you to all that havecontributed to this report. In particular, we would like to thank the SADC Secretariat andBoitumelo Gofhamodimo – Director, Jabulani Mthethwa and Lisebo Mositsi from theTrade, Industry, Finance and Investment Directorate at the SADC Secretariat for guidance,support and cooperation.In the course of the country visits, we have been sincerely welcomed and Ministries havegiven generously of their time in providing us with relevant information. We would thereforelike to thank all government stakeholders in the exercise. We have also met businessorganizations and private sector stakeholders from throughout the region to which thesame thank you is extended.9USAID Southern Africa Trade Hub

EXECUTIVE SUMMARYThe 2012 Audit of the Implementation of the Southern African Development Community(SADC) Protocol on Trade is the sixth audit carried out by the United States (US) Agencyfor International Development (USAID) Southern Africa Trade Hub (SATH). This yearmarks an important milestone in the implementation of the Protocol – the final year of tariffphase-downs. Hence, the current Audit is comprehensive – covering all major issueshighlighted in the Protocol.In the past decade, SADC has embarked on an ambitious regional integration programthan now stretches far beyond ―shallow integration‖ related to the establishment of a FreeTrade Area (FTA). A significant part of SADC work now involves so called ―deepintegration‖ which encompasses establishing and expanding the institutional environmentin order to facilitate regional trade and investments.The SADC agenda in terms of ―deep integration‖ within the Protocol on Trade is extensiveand involves, among others, cooperation and regulatory harmonization in competitionpolicy, customs and trade facilitation, Technical Barriers to Trade (TBTs), Sanitary andPhytosanitary (SPS) procedures. Overall, there has been noteworthy progress in regionalcooperation on these ―deep integration‖ issues; however, further integration in the area ishampered by the key problem of overlapping membership of the majority of SADCMember States in other Regional Economic Communities (RECs).The key problem with implementing SADC‘s ―deep integration‖ agenda within the contextof overlapping membership is simply that countries cannot implement two sets of rules.This Trade Audit has highlighted several areas where further progress is constrained bythis problem. Negotiations toward the establishment of a Tripartite FTA should also be thevenue to address these harmonization issues.In addition to analyzing progress with regards to tariff phase-down, Non-Tariff Barriers(NTBs) and Rules of Origin (ROO), the 2012 Audit of Implementation of the SADCProtocol on Trade also analyzes issues such intra-SADC trade, Annex VII regarding tradein Sugar, Competition Policy, Customs Instruments and the Protocol‘s ―Built-in Agenda‖.Below a short description of key findings in each of these areas is provided:SADC Trade Patterns and Implications for the FTASeveral key results emerge: Intra-SADC trade has increased substantially since the beginning of implementation ofthe SADC Protocol on Trade – nearly doubling in constant terms since 2000 with themajority of this increase occurring after 2004 when tariff phase-downs began inearnest. Extra-SADC trade has kept pace with increases in intra-SADC trade values. A markedeffect has been a shift away from traditional trade partners – most notably theEuropean Union (EU) – with a substantial rise in imports and exports from Asia. Intra-SADC trade as a percentage of total trade has remained stagnant at roughly 15%of total trade over the entire period of implementation. The sectoral composition of intra-SADC trade remains focused in traditional exportsand has not resulted in diversification of export and production patterns either withinSADC or with the rest of the world.10USAID Southern Africa Trade Hub

Thus, while SADC has had significant achievements on the benchmarks towards regionalintegration, the evidence does not support the conclusion that the SADC FTA has spurredexport diversification and industrialization in the region. The reasons are varied and havebeen examined at length in various SADC forums and are highlighted in the remainder ofthis report. SADC recognizes the existing constraints as it moves towards discussion ondeeper regional integration issues.Tariff Phase-DownsSADC Member States, with well-known exceptions, have generally complied with theProtocol on Trade tariff phase-down schedules. This is a substantial achievement forSADC Member States particularly given the requirement for deep cuts in tariffs post-2008.The table below highlights the status of implementation of tariff phase-downs.Summary of 2012 Tariff Phase-DownsImplemented?MethodNotesSACUYesSouth Africa RevenueService (SARS) WebsiteSACU Tariff Phase-Downs were completed in2008MalawiPartial – At 2004levelsMalawi RevenueAuthority website andsubmissions by MalawiMalawi has liberalized 45% of SADC tariff lines.MauritiusPartialCountry VisitMauritius still applies tariffs on 156 Category“C” products.MozambiqueYesMozambique RevenueAuthorityBlock approval of SADC tariff phase-downs.TanzaniaPartial withDerogationCountry VisitBlock approval of SADC tariff phase-downs.Derogation requested for sugar and specificcategories of paper.ZambiaYesGazetted InstrumentBlock approval for SADC tariff phase-downsfrom 2008 to 2012. Issue to be resolved withmissing tariff lines from offer.ZimbabwePartial withderogationCountry notificationZimbabwe has requested and received aderogation on tariff phase-downs.Rules of OriginNegotiation of SADC ROO has been a long and unfortunately circuitous process. Slow butsteady progress has succeeded in rectifying many of the problems identified in the MidTerm Review. By and large most SADC ROO are now no more restrictive than thosein the Common Market for Eastern and Southern Africa (COMESA) or in theEconomic Partnership Agreement (EPA) deals agreed with the European Union(EU).There remain a few problems in processed foods sectors (blended teas, coffee andmixtures of spices), where local content requirements are likely to continue to restrict trade11USAID Southern Africa Trade Hub

and which actually fail to assist the primary product sectors they are intended to help.These should be cleaned up by agreeing to a rule that requires ―manufacture frommaterials of any tariff heading‖ which is consistent with the EPA ROO. 1But the biggest problems remain: wheat flour, where a rule has yet to be agreed, and garments and textiles, where the yarn-forward rule for garments remains anunnecessary and for many countries (including some of those that insist on keeping it)costly impediment to intra-SADC trade.For wheat flour, the only sensible rule of origin is single transformation, or change of tariffheading, with no restrictions on sourcing of wheat. The only sensible rule for garments isalso single transformation. Unfortunately a number of Member States are intent on usinghigh levels of tariff protection to shelter their garment industries from external competitionand to insulate them from the cost-raising impacts of protection of their textile industries.NTBsOver the course of the past year, SADC Member States have continued to make progressin resolving the issues reported in the online NTB reporting mechanism. Despite thisprogress, the system does not provide a comprehensive solution. The report highlights thestatus on outstanding NTBs yet repeats the conclusion of the 2011 Audit. A morecomprehensive approach must be taken to encourage regulatory reform and adopt asystematic, Member State-based approach to addressing NTBs.Annex VII regarding trade in Sugar and related commoditiesAnnex VII of the SADC Protocol on Trade ―Concerning Trade in Sugar‖ has as its objectiveinter alia “to promote, within the Region, production and consumption of sugar and sugarcontaining products according to fair trading conditions and an orderly regional market insugar for the survival of the sugar industries in all sugar producing Member States, inanticipation of freer global trade.” According to stakeholders in the region, there is toomuch uncertainty in the global market to move towards the liberalization of the SADCsugar sector to the rest of the world. Relatively high world prices have been trendingdownwards, and there is a strong probability of entering a period of greater volatility. EUreforms are on-going and their long term impact is unclear. Furthermore, the stalling of theDoha Development Agenda may well put off reductions in subsidies of other major sugarproducers. However, supporting the full liberalization of the sugar sector within SADCshould be considered. With the albeit partial implementation of tariff phase-downs, SouthAfrica and Swaziland have access to non-Southern Africa Customs Union (SACU) SADCMember States that are not subject to quota, while quota restrictions remain on access tothe SACU markets.1A change of tariff heading rule would not suffice since the inputs and outputs are classified in the same tariff heading.12USAID Southern Africa Trade Hub

Accession to the Protocol on TradeOf the 15 SADC Member States, only Angola, the Democratic Republic of Congo (DRC)and the Seychelles have yet to accede to the SADC Protocol on Trade. As SADC reenvisions the integration process outlined in the Regional Indicative StrategicDevelopment Plan (RISDP), a primary thrust of current work is the consolidation of theSADC FTA. The accessions of the remaining Member States are a central plank in thisplatform. Of the three, only the Seychelles has submitted a formal proposal for accessionto SADC Member States. The report indicates that SADC needs to do more with respect topromoting the integration of both DRC and Angola.Customs InstrumentsAn analysis of SADC Customs instruments has broadly reconfirmed the outcomes of thelast year‘s Audit of Implementation of SADC Customs Instruments. It was found that SADCMember States implement Harmonized System and are overall on the way to applying therecent 2012 revision to the system. SADC signatories to the Protocol on Trade are also allusing World Trade Organization (WTO) Customs Valuation. Less progress has been madewith regards to the implementation of SADC Transit Management System, Common TariffNomenclature and the SADC Model Customs Act. Overlapping memberships in multipleRECs is a primary constraint to further implementation of the SADC Customs Instrumentsas Member States cannot harmonize with two different systems. It is therefore proposedthat a bulk of SADC work on customs harmonization be in close co-operation withCOMESA and the East Africa Community (EAC) to create synergy in light of the foreseenTripartite FTA.Competition PolicyIn line with Article X of the Protocol on Trade and the Declaration on Regional Cooperationin Competition and Consumer Policies SADC has established an effective structure forcooperation in the area. SADC Competition and Consumer Policy and Law Committee(Network) has been formed, it meets periodically and has already drafted SADCCompetition Law and a range of ―Best Practice‖ guidelines in the area. Individual MemberStates have also been active in the field as several Competition Acts have been enacted inthe last decade and Competition Commissions established. Up to date one cancharacterize SADC cooperation in the area as establishing a necessary first step ineffective cooperation in the area, however, many challenges in terms of harmonizingprocedure and ―deeper‖ integration in the area remain. These challenges are related to thefollowing facts: (1) Work on harmonization of Competition issues among SADC MemberStates is taking place within four venues – SADC, SACU, COMESA and the EAC; (2)Large differences in SADC Member States‘ Laws and Regulations pertaining toCompetition and Consumer Policy issues; (3) Regional cooperation among CompetitionCommissions is constrained by the inability to share confidential information.Given these constraints, the Audit proposes the following actions to be taken: First, theissues of Competition Policy were discussed at the second Tripartite Summit held in June,2011 in Johannesburg, South Africa. SADC should enhance cooperation with other RECsin the area for the creation of unified and coherent regional competition policy. Second,following the example of the EU, include State Aid in its work on competition issues inrecognition of the fact that regional integration efforts could be less effective if MemberStates were to support national companies as they saw fit. A company which receives13USAID Southern Africa Trade Hub

government support may obtain an advantage over its competitors. Therefore, theEuropean Community Treaty generally prohibits State aid unless it is justified by reasonsof general economic development. Third, the Audit has established that regionalcooperation in the area of Consumer Policies has been less advanced at Member Statelevel; few countries have well established regulatory frameworks in this area and thecapacity to implement these laws. The key objective for the regional work on ConsumerPolicy should therefore focus on strengthening domestic law and enforcement capabilitiesof Member States.Built-in AgendaParts 5-7 and in particular articles 22-24 and 26 of the SADC Protocol on Trade containwhat is referred to as the ―Built-in-Agenda‖ of the Protocol. In these articles, MemberStates have pledged the adoption of international agreements, promotion and cooperationin the areas of cross-border investment, trade in services, intellectual property rights andtrade development. By explicitly including these issues in the Protocol on Trade, SADCMembers States aimed to set out a future path for work and cooperation. A review ofdevelopments in SADC in each of these areas has revealed a large discrepancy in theprogress achieved since the signing of the SADC Protocol on Trade in these areas. In theareas of trade in services and cross-border investment SADC has perhaps achieved morethan the Protocol on Trade had initially envisaged. In both of these areas a separateprotocol has been drafted which developed a framework for cooperation liberalization andharmonization of procedures in the region. Negotiations regarding liberalization of trade inservices commenced at the beginning of 2012 whereas the SADC Finance and Investmentwhich legislates SADC‘s work in the area of cross border investment entered into force inApril 2010.In the area of trade development, overall progress has been significant. However, giventhat trade development focuses on a particularly wide range of issues, it is more difficult tounequivocally state the extent of the progress. Advancement of SADC agenda regardingintellectual property rights has been much less significant.14USAID Southern Africa Trade Hub

1. INTRODUCTION1.1Report Context2012 is a milestone year in the implementation of the SADC Protocol on Trade. Under theterms of the Protocol, Member States agreed to phase down tariff and NTBs over a twelveyear period beginning in 2000.2 In August 2008, the SADC Free Trade Area (FTA) waslaunched with 85% of intra-SADC trade attaining duty free status. During the period 20082012, remaining tariff barriers were to be phased down with the goal of virtually all intraSADC trade achieving duty free/quota free status.3 However, tariff phase-downs representonly one portion of the objectives of the Protocol and work has been undertaken acrossthe entire spectrum of barriers to trade and regional trade cooperation initiatives.Since the adoption of the Protocol, Member States have been implementing the provisionson elimination of import duties, NTBs, Rules of Origin (ROO), cooperation in customsmatters and trade facilitation, trade in sugar, cooperation in standards, Technical Barriersto Trade (TBT), Sanitary and Phytosanitary (SPS) measures and cooperation incompetition policy.The 2012 Audit of the Implementation of the SADC Protocol on Trade is the sixth suchaudit carried out by the United States (US) Agency for International Development (USAID)Southern Africa Trade Hub (SATH) in partnership with the SADC Secretariat. While the2007 audit was comprehensive, subsequent audits have been updates on the 2007 study,each focusing on different issues selected by the SADC Secretariat. For the 2012 Audit,the SADC Secretariat requested that SATH carry out a comprehensive study, as this yearmarks the final year of tariff phase-downs and the final assessment by SATH. The SADCSecretariat identified the following major areas for the 2012 Audit:1. Implementation of the 2011 Tariff Phase-Downs: In accordance with the terms ofthe Protocol on Trade, each year Member States are required to implement theirannual tariff phase-downs on January 1 and to notify the Secretariat of this action. Aspart of the current audit, the tariff phase-downs for 2012 were verified through countryvisits and/or desk based research.2. Overview of SADC Trade Patterns. The SADC Secretariat requested a review ofintra- and extra-SADC trade using t

DRC Democratic Republic of Congo . DTAA Double Taxation Avoidance Agreements . EAC East African Community . EBA Everything But Arms . EC European Commission . EPA Economic Partnership Agreement . LPI Logistics Performance Index . MFN Mos

Related Documents:

The quality audit system is mainly classified in three different categories: i Internal Audit ii. External Audits iii. Regulatory Audit . Types Of Quality Audit. In food industries all three audit system may be used to carry out 1. Product manufacturing audit 2. Plant sanitation/GMP audit 3. Product Quality audit 4. HACCP audit

INTERNAL AUDIT Example –Internal audit report [Short Client Name] Internal Audit Report Rev. [Rev Number] STEP ONE: Audit Plan Process to Audit (Audit Scope): Audit Date(s): Lead Auditor: Audit #: Auditor(s): Site(s) to Audit: Applicable Clauses of [ISO 9001 or AS9100] S

Report Title: An Internal Audit Report on the Audit of Enforcement Collections Report No.: 2018-103 Report Date: August 2018 ; Audit of Property Tax Appraisals : Completed Report Title: An Internal Audit Report on the Audit of Property Tax Appraisals Report No.: 2018-104 Report Date: August 2018 ; Audit of Treasury Remote Depositing : Completed

AUDIT OF DEKALB COUNTY DATA CENTER PHYSICAL SECURITY AUDIT REPORT NO. 2018-007-IT John Greene Chief Audit Executive FINAL REPORT What We Did In accordance with the Office of Independent Internal Audit's (OIIA) Annual Audit Plan, we conducted a performance audit of the DeKalb County Data Center Physical Security.

4.1 Quality management system audit 9.2.2.2 Quality management system audit - except: organization shall audit to verify compliance with MAQMSR, 2nd Ed. 4.2 Manufacturing process audit 9.2.2.3 Manufacturing process audit 4.3 Product audit 9.2.2.4 Product audit 4.4 Internal audit plans 9.2.2.1 Internal audit programme

A.4 Audit Committee 1. Minutes and Committee Reports and Recommendations 2. Written duties and responsibilities 3. Duly signed Oath of Office 4. Audit Systems and Procedure 5. Audit Program of Work 6. Internal Audit Report 7. Monitoring report on audit recommendations 8. Report to General Assembly A.5 Education Committee 1.

Audit’s annual report and opinion, progress of internal audit activity against the audit plan, internal audit reports. External audit Scope and depth of external audit work, its independence and value for money, annual management letter, report to those charged with governance and other reports, effectiveness of

CHAPTER 12 Internal Audit Charters and Building the Internal Audit Function 273 12.1 Establishing an Internal Audit Function 274 12.2 Audit Charter: Audit Committee and Management Authority 274 12.3 Building the Internal Audit Staff 275 (a) Role of the CAE 277 (b) Internal Audit Management Responsibilities 278 (c) Internal Audit Staff .