An assessment of agricultural
sensitive products within the
Cape to Cairo Tripartite Region
by Taku Fundira
tralac Working Paper
No. S11WP08/2011
April 2011
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An assessment of agricultural sensitive products within the Cape to Cairo Tripartite Region. Author: Taku Fundira S11WP08/2011 | April 2011
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This publication should be cited as: Fundira, T. 2011.
An assessment of agricultural sensitive products within the Cape to Cairo Tripartite Region.
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An assessment of agricultural sensitive products within the Cape to Cairo Tripartite Region. Author: Taku Fundira S11WP08/2011 | April 2011
An assessment of agricultural sensitive products
within the Cape to Cairo Tripartite Region
Introduction
In an effort to enhance market access, harmonise policies in areas of common interest and
address the issue of multiple membership among other issues, Heads of States from the
regional economic communities (RECs) of COMESA, EAC and SADC agreed in 2008 to
establish an FTA among the three RECs. Despite this drive to deepen integration among the
tripartite member countries, it is also equally important to note that trade liberalisation can
have negative consequences for the economy of a country. This may therefore partly explain
why countries have tended to prolong liberalisation for or even exclude from liberalisation
certain products of strategic social and economic significance.
In trade policy analysis, such products can be considered and classified as special or sensitive
products. However, what constitutes a sensitive product differs from country to country
and there seem to be no common criteria used to determine these sensitive products.
Despite this shortcoming, there seems to be a common understanding that a product is
deemed sensitive if trade liberalisation impacts negatively on the production or trade of the
said product. Such products are considered to be vulnerable to a trade policy shock that
negatively affects the product’s production, consumption and revenue-earning capacity.
We note that the issue of sensitive products for exemption from tariff liberalisation in the
different countries/regional groupings may become an area of contention in the Tripartite
FTA negotiations, simply because much of the basis for this exemption designation is likely
to be arbitrary, and the sensitive products are more likely to reflect protectionist interests
or rent-seeking behaviour, both of which will perpetuate inefficiencies. There have been
discussions around the issue of sensitive products within the individual RECs and within the
Tripartite FTA itself thus emphasising the significance of this issue and therefore we urge
countries to base their selection on genuine public policy objectives.
The fact that this envisaged FTA brings together three RECs that have either attained or
intend to establish a customs union (CU) territory complicates this process because of the
common external tariffs regimes that need to be or have been established among the
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An assessment of agricultural sensitive products within the Cape to Cairo Tripartite Region. Author: Taku Fundira S11WP08/2011 | April 2011
members of each CU. Currently, COMESA and the EAC have attained customs union status
(in theory COMESA is a customs union, but in practice this has not yet been implemented)
while SADC is still an FTA also aiming at attaining CU status. For the proposed Tripartite
FTA to function there is a need for the rationalisation of tariff structures and the
development of common criteria for sensitive products among other issues.
For the two CUs (COMESA and the EAC), rationalisation of tariff structures is not an issue
as both have agreed and established Common External Tariff (CET) duty rates that have
similar applied duties on capital goods (0%), raw materials (0%), intermediate goods (10%),
and finished goods (25%). However, SADC, which is still an FTA, will need to agree on a
CET and because of the multiple membership conundrum that its members face, may well
rationalise its envisaged CET duties in a manner similar to those of the other RECs (i.e.
COMESA and EAC). The fact that within SADC there is a CU, SACU, with a rather
complex tariff structure in terms of the number of tariff lines and bands, also complicates
this process.
Apart from the need to rationalise the tariff structures, there is no indication or
transparency on how the process of determining sensitive products is currently being
conducted in the different RECs. At the moment, only the EAC members have agreed and
developed a single list of sensitive products while the other RECs of COMESA and SADC
have yet to conclude this process. It is yet to be established whether the creation of this
enlarged FTA will create urgency among the members of COMESA and SADC to complete
this process.
Aim of the study
The aim of this chapter is to provide an overview of the rationale behind sensitive products
during trade liberalisation. We attempt to achieve this by providing an overview on what
motivates countries to seek for flexibilities from full liberalisation for certain products. We
do this by highlighting some of the common indicators that are generally viewed as
instruments for selecting sensitive products. This discussion is followed by a review of how
the issue of sensitive products is being handled at the multilateral and regional level. Here
our focus will be on the provisions within the World Trade Organisation (WTO)
Agreement and also within the COMESA, EAC and SADC agreements as individual RECs as
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An assessment of agricultural sensitive products within the Cape to Cairo Tripartite Region. Author: Taku Fundira S11WP08/2011 | April 2011
well as an expanded Tripartite FTA. We also discuss how this affects the conclusion of
negotiations by viewing it in the perspective of the current negotiations both at the regional
and multilateral level.
Our discussion then becomes more focused and specific to agricultural trade liberalisation
within the Tripartite FTA and the extent to which agricultural products form part of the
sensitive products list. The underlying assumption here is that agriculture forms the
backbone of any economic and social development in most of the member countries’
economies and as such it is a sector of significant importance that may need some form of
support. We conclude the paper by highlighting some challenges and possible
recommendations for developing a common approach to identifying sensitive products.
Criteria for selecting sensitive products1
In general, there is a wide selection of criteria which have been used to select sensitive
products and which include the following among others: revenue contribution, importance
of the sector to a country’s economy, and the potential of the sector to regional economic
development.
The importance of a sector to a country’s economy can be measured using the following
indicators:
• Contribution to employment;
• Contribution to Gross Domestic Product (GDP);
• Value-added;
• Exports earnings;
• Outputs/Inputs for differentiated tariff treatment;
• Stage of sector development/infant industry; and
• Current level of the support given to the sector (incentives).
1 Excerpt taken from COMESA Customs Union (2009).
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An assessment of agricultural sensitive products within the Cape to Cairo Tripartite Region. Author: Taku Fundira S11WP08/2011 | April 2011
The potential of sector to regional economic development is measured using the following
indicators:
• Existing market size;
• Potential market size;
• Current production/potential production/investment plan;
• Preference agreement;
• Outputs/inputs for differentiated tariff treatment; and
• Social, health, cultural and religious reasons.
As highlighted above, the grounds on which goods could be designated as sensitive are quite
broad and this could result in long lists of sensitive products being produced by member
states of the three RECs. Such a scenario would effectively render the process of
liberalisation ineffective.
Provisions regarding sensitive products in trade agreements
The success of any trade negotiations lies in the extent to which flexibilities are
accommodated. Therefore, support to sectors deemed strategic in enhancing economic
growth is important in the development of market access liberalisation schedules. In
multilateral, regional or even bilateral negotiations, it is necessary to include exemptions to
accommodate especially politically sensitive sectors. The role played by sensitive products in
improving market access is such that the number and treatment of eligible tariff lines will be
vital components of any outcome that delivers substantial benefits for both trade and
development.
However, too many exceptions put at risk the objectives of any trade liberalising
negotiation. It is therefore important to note that although such exemptions are allowed,
efforts must be made to either establish agreements without sensitive product lists or at
least ensure that countries are restricted and only allowed to develop short sensitive
products lists. In the sections to follow we highlight how the issue of sensitive products is
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An assessment of agricultural sensitive products within the Cape to Cairo Tripartite Region. Author: Taku Fundira S11WP08/2011 | April 2011
handled a) at the multilateral level (WTO); and b) at the regional level (COMESA-EAC-
SADC).
a) Global context – WTO framework
In general, the objective of the World Trade Organisation is to provide a platform for
negotiations amongst members in order to set general rules for reducing trade barriers. For
the success of this rules based system, transparency, predictability and enforceability is
crucial, which implies a political commitment for all members to abide by the set and agreed
rules.
In the context of the WTO, reference to sensitive products is accorded to agricultural
products that are identified by the members and which are not subject to full tariff cuts.
Therefore both developed and developing countries can declare a product sensitive
especially for political reasons, in which case allow for flexibilities to the liberalisation norm.
According to Gouel et al. (2010), flexible treatment of these products is allowed, more in
relation to market access, and are subject to lower tariff cuts than specified by the formula;
however, in exchange, tariff rate quotas (TRQ) will be opened to ensure (at least some)
‘substantial’ improvements in market access for each product.
In the current Doha Round of negotiations several proposals have been made regarding the
issue of sensitive products. Among others, the key to the success of the Doha Round will be
the manner in which this issue will be handled during the negotiations. A concern which is
regarded as likely to be a major source of conflict is expected to arise from the definition
and application of the concept of 'sensitive products’. Developed countries will be under
pressure to ensure that the sensitive products that they have identified are not
concentrated in products that will render the market access endeavour meaningless. This is
because in agriculture, the …tariff structures of most (particularly developed) countries
show remarkable degrees of dispersion, with tariff peaks concentrated in a very small
number of agricultural tariff lines, which explains why even a small percentage of sensitive
products can significantly limit market access improvements’ (Gouel et al 2010).
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An assessment of agricultural sensitive products within the Cape to Cairo Tripartite Region. Author: Taku Fundira S11WP08/2011 | April 2011
b) Regional Context – COMESA-EAC-SADC configuration
Our general assumption is that the main variables, which have been selected as key
indicators for determining a product’s sensitivity by the three RECs are the same as those
used globally. The basket of indicators includes, among others, the following: fiscal,
contributions to output and other policy imperatives of member states.
We further note that support to sectors deemed strategic in enhancing economic growth is
important in the development of market access liberalisation schedules. This assumption is
supported by SADC and COMESA countries’ selection criteria. Both SADC and COMESA
have broadly considered revenue and infant industry arguments as key criteria for assessing
commodities’ level or extent of sensitivity. The EAC, on the other hand, has identified a
common list of sensitive products although the criteria for the selection of the products are
unclear. Under the EAC Customs Union Protocol, exemptions were made for 58 products
which do not conform to general CET structure and are regarded as sensitive, thus
attracting higher tariffs.
As already noted, the EAC is the only REC that has managed to identify and agree on a
common product list that is designated ‘sensitive’. To date, COMESA and SADC have been
unable to complete the exercise of sensitive products designation. At the launch of the
COMESA CU, it was noted that only 11 of the 19-member group had identified their
sensitive products list. However, the lists of the individual countries and the products
identified remain unclear. For SADC, there seems to be no indication of how far this
exercise has progressed, bearing in mind the fact that SADC is already lagging behind on its
implementation deadlines as set out in SADC’s Regional Integration Strategic Development
Plan (RISDP).
Country analysis of agricultural sensitive products
The big picture
Agricultural plays a crucial role in the economy of most developing countries and provides
the main source of food, income and employment to their rural populations. In most African
countries agriculture contributes over 20 percent to GDP, 70 percent to employment, over
50 percent to export earnings and about 40 percent to government revenue. The
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An assessment of agricultural sensitive products within the Cape to Cairo Tripartite Region. Author: Taku Fundira S11WP08/2011 | April 2011
assumption we therefore make from a developing country perspective, is that agriculture is
a pivotal sector both from an economic and a social perspective. Thus, protection or the
need to designate some agricultural products as sensitive can be justified by the fact that in
general for most developing countries (Waiyaki, undated):
• The domestic market is considered as an initial outlet for poor small farmers;
• Farmers are not able to compete in export markets or against imported products; and
• Poor investment in infrastructure, particularly roads, communication, irrigation and
technology development limits the productive capacity of domestic farmers.
Measures are therefore required to ensure that local poor farmers are not adversely
affected by liberalisation while at the same time efforts to enhance productive capacity,
competitiveness and economic growth are underway.
Depending on each member country’s national strategic plan, countries may either seek to
have the sector heavily protected or maintain some form of protection (i.e. partial
liberalisation). For each option chosen from the scenarios highlighted here, there are
consequences for the producers, the consumers and the economy in general.
Scenario 1: Heavily protected sectors
Governments usually apply high tariffs on certain goods to limit international competition, a
global phenomenon that is deeply rooted in the politics of nations. The high tariff may imply
that the products are sensitive and therefore of strategic importance. However, applying
high tariffs is a protectionist policy that is trade restrictive and comes at great economic
cost. This is simply because it favours the domestic (often inefficient) producers at the
expense of the consumers who pay a high price for domestically produced goods. For
example, an increase in the protection of basic products such as wheat and maize flour,
cigarettes, matches, rice and milk results in price increases for end consumers, hitting poor
people hardest. Therefore such a strategy may not be ideal, especially when poverty
alleviation concerns are part of a country’s national policy strategy.
On the other hand, such protectionist measures may provide incentives for some infant
industries for which prospects exist for the domestic producers to become competitive
over the medium to long term. The only problem with infant industry protection is that it
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An assessment of agricultural sensitive products within the Cape to Cairo Tripartite Region. Author: Taku Fundira S11WP08/2011 | April 2011
may lead to the promotion of inefficient industries, which otherwise cannot survive without
the protection. According to Mudungwe (2010), a rapid cut in tariffs for a sector such as
agriculture, without complementary policies and programmes to strengthen internal
production, can result in the collapse of the sector. This can have a negative impact on
employment, effectively raising unemployment in the sector, as it is usually a major
employment section in the rural areas. This indicator has been identified as very relevant in
measuring product sensitivity in the three RECs.2
Scenario 2: Partially liberalised sectors
Most developing countries including the tripartite members, with the exception of a few,
rely heavily on tariffs for government revenue, and therefore tariff revenue concerns are
likely to play an influential role in trade policy formulation in the medium to long term. This
is because a sharp decline in revenue would impact in the short run on the ability of a
particular government to function effectively in the provision of infrastructure, health and
other social services. Therefore the products that countries may need to exclude from
liberalisation to prevent loss of revenue are often the partially liberalised sectors (attracting
medium-level tariffs) as they yield the most revenue. This is because high tariffs as already
highlighted are restrictive and allow only a few imports from which to collect the tax. Thus,
countries may find that excluding highest-tariff products from liberalisation will force them
to liberalise on their key revenue-generating products that would have negative economic
consequences for the government in the short run. It is in this instance that governments
may consider designating products attracting medium-level tariffs as sensitive purely for
revenue concern, as they find alternatives to help reduce dependency on trade revenue.
2 We caution that at the time of publication of this statement, it was unclear as to which criteria the EAC had
based its sensitive products list on.
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An assessment of agricultural sensitive products within the Cape to Cairo Tripartite Region. Author: Taku Fundira S11WP08/2011 | April 2011
Methodology
As noted in previous sections, designation of sensitive products may be for specific reasons
or certain objectives. Some considerations for agricultural sensitive products include those
• most negatively affected by imports;
• with very high tariffs;
• with greatest reductions in tariff revenues;
• employing large numbers; and
• where the country has production capacity.
In our attempt to identify sensitive products for the countries in the proposed tripartite
FTA configuration, in the absence of publicly available sensitive product lists (with the
exception of EAC and SACU), several assumptions were made and are listed below.
i) For COMESA members, any product traded among member countries (intra-regional
trade) and still attracting a tariff should be designated sensitive. The underlying
assumption is the fact that within a CU, member countries have duty-free access to
each other’s markets and the only exemption is when products have been deemed
sensitive, or in this case, tariffs applied to third-party countries (i.e. to non-COMESA
tripartite members).
ii) Within SADC, products that currently attract tariffs (with the exception of Angola,
DRC and Seychelles)3, are classified in Category C –‘Sensitive Product’ or Category E
– ‘Exclusion List’. Due to the fact that SADC recently attained FTA status, the two
categories highlighted here are the ones that are permissible for levying tariffs. We
further assume that any agricultural products still attracting tariff should therefore fall
under Category C.
iii) For SACU countries comprising South Africa and the BLNS (Botswana, Lesotho,
Namibia, and Swaziland), who are also members of SADC, SACU’s CET is applied to
third countries and no internal tariffs exist between member states. SACU’s
3 These countries have not yet submitted their phase-down schedules with Seychelles having recently rejoined
the regional bloc.
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An assessment of agricultural sensitive products within the Cape to Cairo Tripartite Region. Author: Taku Fundira S11WP08/2011 | April 2011
membership to SADC implies that the above assumption for SADC is applicable.
However, there are separate offers for South Africa by the other non-SACU SADC
members. These will be analysed separately. We further note that SACU has fully
liberalised its tariffs for agricultural products originating from SADC and hence no
sensitive products lists are in order here.
Caveat
The main disadvantages of this methodology are that:
a) It uses proposed SADC tariff phase-down schedules which were notified in 2000 when
the SADC Trade Protocol was signed. The problem with this is that the schedules are
only indicative and do not reflect whether countries have kept to their commitments
and implemented the phase-down schedules accordingly. To highlight this predicament
a case study analysis to support the above notion was conducted for South African
exports to the tripartite countries (see Box 1); and
b) It is difficult to analyse inter-regional tariffs as these usually reflect averages of tariffs
applied by the member countries of the particular REC under review and not
necessarily for individual countries. Individual country-country analysis was not feasible
due to lack of time and unavailability of data.
Results of the analysis
A total of 16 countries,4 the bulk of which are SADC members, were analysed. Non-SADC
COMESA members (especially the northern countries) were not included due to limitations
of data availability and for Libya - all agricultural products are duty-free at Most Favoured
Nation (MFN) levels. We also note that South Africa is treated differently to other SADC
countries by some SADC members5.
Our analysis reveals the following:
• Among the countries analysed, market access of agricultural products is generally
relatively open as very few product lines still face high tariffs. This supports the notion
4 These were: Botswana, Burundi, Kenya, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Rwanda, South Africa, Swaziland, Tanzania Uganda, Zambia and Zimbabwe. 5 These include Madagascar, Malawi, Mozambique and Zimbabwe.
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An assessment of agricultural sensitive products within the Cape to Cairo Tripartite Region. Author: Taku Fundira S11WP08/2011 | April 2011
that tariff is no longer the main trade barrier, but that other non-tariff barriers are
inhibiting trade.
• We also note that certain sectors such as HS04 – dairy, HS10 – cereals, HS17 – sugar,
HS22 beverages and HS24 tobacco products are key sectors for different countries
that are regarded as sensitive and therefore still attract high tariffs.
• Of the countries analysed, Malawi, has the highest number of product lines which still
face tariffs of 10 percent and above. This may be attributed to the fact that Malawi has
been lagging in its phase-down commitments to the SADC Protocol and also to its
recent request for derogation within the context of the SADC FTA. On the other
hand, this may be a strategy for maximising on tariff revenues which Malawi depends
upon.
• SACU has fully liberalised agricultural products to its SADC counterparts; however,
separate tariff offers for COMESA countries are in place and will be discussed
separately.
• Mauritius still applies tariffs to a number of products albeit at relatively low rates with
the exception of HS24 – beverages, spirits and vinegar which has a tariff of 24 percent.
• As the analysis is based on tariff phase-down offers by individual countries and not by
the current applied tariff regimes, as already highlighted, it is difficult to establish
whether or not all countries have implemented and reformed their tariff regimes
accordingly, and we therefore note with caution the tariffs applied especially in the
case of Zimbabwe which has the majority of products duty-free with the exception of
HS24 – beverages, spirits and vinegar (97%) and HS24 – tobacco and manufactured
tobacco substitutes (28%).
• Zimbabwe is an interesting case: because of the decade-long economic collapse that
the country has been experiencing recently, the country has allowed imports of basic
foodstuffs (the bulk of agricultural products) duty-free. However, with transparency
concerns regarding the current tariff schedules applied, the case may have been
reversed and tariffs applied.
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An assessment of agricultural sensitive products within the Cape to Cairo Tripartite Region. Author: Taku Fundira S11WP08/2011 | April 2011
Table 1 below summarises the agricultural products at the HS2 level that are currently
facing tariffs, showing the average and (maximum) tariff applied for all 16 countries.
Table 1: Products currently attracting tariffs for select countries (SADC offers)
HS2 H2Des EAC Mau Moz Mad Mal Zam Zim
01 Live animals 0 0 0 3 (5) 1 (5) 0 0
02 Meat and meat products 0 3 (32) 4 (10) 5 (5) 5 (15) 2 (10) 0
04 Dairy, eggs, honey, edible animal products n.e.s.* 22 (60) 3 (22) 5 (10) 5 (5) 9 (15) 1 (10) 0
05 animal products n.e.s. 0 0 0 0 5 (5) 0 0
06 Live plants 0 0 0 0 (5) 4 (15) 0 0
07 Edible vegetables 0 0 4 (10) 3 (5) 7 (15) 0 (10) 0 (10)
08 Edible fruits, melons 0 1 (16) 0 (10) 3 (5) 12 (15) 0 0
09 Coffee, tea, mate, spices 0 3 (16) 0 4 (5) 6 15) 1 (10) 0
10 Cereals 24 (75) 0 0 (3) 0 3 (5) 0 0
11 Milling products 4 (60) 0 (6) 0 (10) 0 12 (15) 1 (10) 0 (10)
12 Oil seed, etc. n.e.s. 0 0 0 0 4 (15) 0 0
13 Vegetable extracts n.e.s. 0 0 0 0 2 (15) 0 0
14 Vegetable products n.e.s. 0 0 0 0 2 (15) 0 0
15 Animal, vegetable fats and oils, etc. 0 1 (6) 3 (10) 2 (5) 8 (15) 0 0
16 Meat, fish and seafood, food preparations n.e.s. 0 13 (22) 0 5 (5) 15 (15) 0 0
17 Sugars and sugar confectionery 17 (100) 3 (22) 2 (10) 0 9 (15) 1 (10) 0
18 Cocoa and cocoa preparations 0 4 (22) 0 0 8 (15) 0 0
19 Cereal, flour, starch, milk prep and products 0 5 (22) 1 (10) 0 10 (15) 0 3 (10)
20 Vegetable, fruit, nut, etc. food preparations 0 5 (32) 1 (10) 0 11 (15) 0 0
21 Miscellaneous edible preparations 0 6 (22) 0 0 13 (15) 0 0
22 Beverages, spirits and vinegar 0 24 (32) 0 (10) 0 9 (10) 0 97 (1210)
23 Food residues, animal fodder 0 1 (22) 0 (8) 0 5 (15) 0 0
24 Tobacco and manufactured tobacco substitutes 8 (35) 7 (32) 1 (10) 0 15 (15) 0 28 (50)
*n.e.s. not elsewhere specified Source: tralac calculations based on SADC tariff offers
During the analysis we noted that some countries (Madagascar, Malawi, Mozambique and
Zimbabwe) had separate offers for products originating from South Africa. The applied tariff,
although not trade restrictive, points to the fact that they may be in place merely as key
revenue generating products or, in fact, accord special preference to goods originating from
South Africa. This is because in the region, South Africa which is a net food exporter is the
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An assessment of agricultural sensitive products within the Cape to Cairo Tripartite Region. Author: Taku Fundira S11WP08/2011 | April 2011
major trading partner of most countries as very few countries trade amongst each other.
Therefore it makes economic sense, from a revenue perspective, to target imports from
South Africa as they form the bulk of trade with these countries.
Table 2 summarises some of the products originating from South Africa that attract duties
(Note that products shaded in [grey] all enter duty-free into the respective markets). Two
points can be raised from the analysis of treatment accorded to goods originating from
South Africa in comparison to products originating from other SADC members. These are:
i) Either South African products are levied higher tariffs than other SADC members as
reflected by the higher average applied rates for certain products (the case of
Madagascar and to a certain extent Mozambique), this may be the case for revenue
collection purposes;
ii) or South African products are given special preference in comparison to products
from other SADC members (in the case of Malawi and Zimbabwe). Furthermore, this
observation can be seen from the number of agricultural products from South Africa
that are entering duty- free (see products with area shaded in grey in the table below).
As can be noted, Malawi is the most easily accessed market for products from South
Africa. This can in part be attributed to the long history and bilateral relations that
South Africa has had with Malawi.
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An assessment of agricultural sensitive products within the Cape to Cairo Tripartite Region. Author: Taku Fundira S11WP08/2011 | April 2011
Table 2: Products with different tariffs applied (%) for South Africa (SADC offers)
HS2 H2Des Mad Mal Moz Zim
01 Live animals 5 (10) 0 0 0
02 Meat and edible meat offal 10 (10) 0 7 (15) 3 (5)
04 Dairy products, eggs, honey, edible animal products n.e.s. 10 (10) 0 7 (15) 3 (5)
06 Live trees, plants, bulbs, roots, cut flowers, etc. 1 (10) 0 0 0
07 Edible vegetables and certain roots and tubers 7 (10) 0 6 (15) 3 (5)
08 Edible fruit, nuts, peel of citrus fruit, melons 5 (10) 0 (15) 1 (15) 2 (5)
09 Coffee, tea, mate and spices 8 (10) 0 0 0
10 Cereals 0 (5) 0 0 (3) 0
11 Milling products, malt, starches, inulin, wheat gluten 3 (5) 0 1 (15) 0
12 Oil seed, oleagic fruits, grain, seed, fruit, etc. n.e.s. 1 (5) 0 0 0
13 Lac, gums, resins, vegetable saps and extracts n.e.s. 1 (5) 0 0 0
15 Animal, vegetable fats and oils, cleavage products, etc. 4 (10 0 4 (15) 2 (5)
16 Meat, fish and seafood food preparations n.e.s. 10 (10 0 0 5 (5)
17 Sugars and sugar confectionery 0 0 1 (15) 1 (5)
18 Cocoa and cocoa preparations 0 0 0 2 (5)
19 Cereal, flour, starch, milk preparations and products 0 0 1 (15) 3 (5)
20 Vegetable, fruit, nut, etc., food preparations 0 0 6 (15) 0 (5)
21 Miscellaneous edible preparations 0 0 0 (8) 3 (5)
22 Beverages, spirits and vinegar 0 11 (15) 1 (15) 1 (15)
23 Residues, wastes of food industry, animal fodder 0 0 2 (8) 0 (5)
24 Tobacco and manufactured tobacco substitutes 0 0 2 (15) 8 (25)
Source: tralac calculations based on SADC tariff offers
A review of SACU’s offer to COMESA (see Table 3) reveals the following:
• SACU’s offer to COMESA as depicted in the table below highlights that the bulk of
agricultural products from COMESA members face a tariff into the South African
market; thus the creation of an FTA will significantly open new opportunities for the
affected COMESA members;
• HS24 – tobacco products face the highest average tariff of 24 percent followed by
HS19 – cereal products with a 10 percent tariff. The rest of the agricultural products
face tariff rates of lower than the average of 10 percent.
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An assessment of agricultural sensitive products within the Cape to Cairo Tripartite Region. Author: Taku Fundira S11WP08/2011 | April 2011
Table 3: Tariff (%) barriers applied by SACU to COMESA (SACU – COMESA offers)
HS2 H2Des SACU
02 Meat and meat products 9 (30)
04 Dairy, eggs, honey, edible animal products n.e.s. 7 (18)
06 Live plants 6 (12)
07 Edible vegetables 5 (20)
08 Edible fruits, melons 3 (19)
09 Coffee, tea, mate, spices 1 (13)
10 Cereals 0 (3)
11 Milling products 3 (11)
12 Oil seed, etc., n.e.s. 3 (11)
13 Vegetable extracts n.e.s. 3 (9)
14 Vegetable products n.e.s. 1 (4)
15 Animal, vegetable fats and oils, etc. 4 (7)
16 Meat, fish and seafood food preparations n.e.s. 7 (13)
17 Sugars and sugar confectionery 2 (19)
18 Cocoa and cocoa preparations 4 (10)
19 Cereal, flour, starch, milk prep and products 10 (26)
20 Vegetable, fruit, nut, etc., food preparations 9 (31)
21 Miscellaneous edible preparations 7 (13)
22 Beverages, spirits and vinegar 5 (13)
23 Food Residues, animal fodder 3 (10)
24 Tobacco and manufactured tobacco substitutes 24 (71)
29 Organic chemicals 4 (8)
33 Essential oils, perfumes, etc. 1 (6)
35 Albuminoids, modified starches, enzymes 1 (9)
38 Miscellaneous chemical products 3 (8)
51 Wool, animal hair 0 (3)
52 Cotton 3 (9)
Source: tralac calculations based on SADC tariff offers
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An assessment of agricultural sensitive products within the Cape to Cairo Tripartite Region. Author: Taku Fundira S11WP08/2011 | April 2011
BOX 1: A review of South African agricultural exports facing tariffs in the Tripartite Configuration
During the data training week we undertook a review of the agricultural products that South
African exporters face in the COMESA-EAC-SADC Tripartite Configuration. Our aim is to
identify agricultural products that are classified as sensitive products by members of the Tripartite
Configuration and therefore may well remain so in the broader regional integration process. We
have also included the broad range of clothing and textile products (HS50-63) as a category, but
it should be noted that only agricultural products (raw materials such as cotton, animal hair, etc)
are considered and therefore should not be confused as an examination of the entire clothing and
textiles products. To determine the tariffs barriers applied to these South African products, we
use the current applied rates as reported to the UN ITC MacMap database (at the HS 6 level of
the harmonised classification system) by the respective countries in the Tripartite Configuration.
Our preliminary analysis reveals the following:
• With the exception of SACU members and Libya, South African agricultural products still
face tariffs in the Tripartite Configuration;
• Mauritius (95%), Seychelles (85%), Zambia (83%) and Mozambique (81%) are the only
countries which are relatively open to South African exports of agriculture products. The
rest of the countries in the Tripartite Configuration still maintain protection in over 60
percent of the product lines under review, with Burundi (100%), Rwanda (96%), Zimbabwe
(95%) and Sudan (88%) maintaining protection in virtually all products.
• In most countries under review, ‘food, beverages and tobacco’ and ’vegetable products’ still
face the highest level of protection.
• Mauritius, Mozambique, Seychelles, Tanzania and Uganda are the only countries that offer
duty-free access to South Africa raw material products classified under Clothing and
Textile (C&T) exports.
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An assessment of agricultural sensitive products within the Cape to Cairo Tripartite Region. Author: Taku Fundira S11WP08/2011 | April 2011
The tables below provide details of the level of protection that South African exporters are
facing in each of the countries in the Tripartite Configuration. We have only shown the
averages and not the variations within these categories. The data clearly signals that:
(a) There is a considerable distance to go in implementation of the so-called SADC Free
Trade Agreement; and
(b) This and the high tariffs further north do not augur well for anything other than an
FTA in name only!
The categories shown are:
• Chapters HS 01 to 05 inclusive, live animals, animal products;
• Chapters HS 06 to 14 inclusive, vegetable products;
• Chapter 15, animal or vegetable fats & oils;
• Chapters 16-24 inclusive, food, beverages & tobacco; and
• Chapters 50 -63, clothing and textiles.
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An assessment of agricultural sensitive products within the Cape to Cairo Tripartite Region. Author: Taku Fundira S11WP08/2011 | April 2011
Table 4: Regional (average) tariff barriers to South African exports
Country/sector Ch 01 05 Ch 06-14 Ch 15 Ch 16-24 CH 50-63
Angola 10 9 5 14 2
Burundi 18 5 5 5 5
Comoros 11 5 5 8 16
DRC 12 12 14 16 5
Djibouti 12 12 13 15 26
Egypt 14 6 7 237 5
Eritrea 7 10 9 16 2
Ethiopia 23 24 23 25 6
Kenya 26 21 14 23 0
Madagascar 18 18 16 18 5
Malawi 13 19 18 22 8
Mauritius 12 11 13 0
Mozambique 14 14 13 12 0
Rwanda 13 9 22 26 6
Seychelles 63 83 211 0
Sudan 37 33 33 36 28
Tanzania 27 24 19 23 0
Uganda 27 23 19 23 0
Zambia 11 19 13 19 15
Zimbabwe 35 23 15 36 5
Source: UN ITC MacMap database, data training week analysis
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An assessment of agricultural sensitive products within the Cape to Cairo Tripartite Region. Author: Taku Fundira S11WP08/2011 | April 2011
Impact of sensitive products on deepening integration and the way forward
As highlighted earlier, the process of designating sensitive products can perpetuate
inefficiencies and thus undermine the process of deeper integration. Furthermore, the lack
of resources and analytical capacity to undertake detailed analysis and the lack of properly
defined guidelines and benchmarks also hinder the process. This may partly explain the
delays by some countries in COMESA and SADC to identify and notify their lists of sensitive
products to the respective secretariats. There is therefore need for policy makers to find
ways to develop a systematic approach to determining sensitive products and to ensure that
all stakeholders are aware of the purpose of a sensitive products list (i.e. economic versus
political versus social concerns). As a principle, it is proposed that the RECs should not
introduce new sensitive products in addition to those currently present in their schedules,
but to work towards reducing their lists. This is simply because even a short list of sensitive
products reflects poorly on the desire to establish a CU with a CET, to which all the RECs
have aspired or aspire to attain.
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An assessment of agricultural sensitive products within the Cape to Cairo Tripartite Region. Author: Taku Fundira S11WP08/2011 | April 2011
References
COMESA Customs Union. 2009. Status on Sensitive Products and Implementation of the
Transition Period. [Online]. Available:
http://programmes.comesa.int/attachments/119_comesa_customs_union_status_03%2006%
202010.pdf.
Gouel C., Mitaritonna, C. and Ramos, M.P. 2010. The Art of Exceptions: Sensitive Products in
the Doha Negotiations. Working Paper No 2010 – 20. Paris: Centre d'Etudes Prospectives et
d'Informations Internationales (CEPII).
Mudungwe, N. (2010). Is there a Common Criteria or Approach for Selecting Sensitive Products in
Regional Trading Blocs: The Case for COMESA, EAC and SADC? Paper presented at the
Tripartite Regional Integration Forum, Arusha, Tanzania, 17-18 June 2010
Waiyaki, N. (Undated). Sensitive & Special Products in Trade Negotiations: The Case of Kenya.
Kenya Institute for Public Policy Research and Analysis, available on
http://www.uneca.org/trid/documents/cotonu/Special%20Products%20Slides%20Cotonou.ppt
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