South Africa has flexed its economic muscle, telling Zimbabwe to reduce duty and surtax on 112 products in response to Harare’s recent trade restrictions.
BY BUSINESS REPORTER
Last month, Zimbabwe promulgated Statutory Instrument (SI) 64 of 2016 that restricted the importation of many products in a bid to protect local industries.
The import restriction has riled regional neighbours and the matter came up for discussion when Industry and Commerce minister Mike Bimha met his South African counterpart Rob Davies in South Africa last week.
The meeting was a follow up to the bilateral meeting of officials from the ministry of Industry and Commerce and their South African counterparts on July 20 on trade matters.
Briefing journalists on Friday on the meeting, Bimha said in response to the request of a review on surtax and duty, government offered to get back to them in an official capacity in “two weeks”.
“There are 112 products which they [South Africa] want us to consider in terms of phasing down duty and surtax,” he said.
“We would want to carry out consultations because some of these products would require input from other ministries and institutions.
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“There was no communication to me that there was going to be a retaliatory response from South Africa to SI 64 of 2016.
“We have not banned anything; we are only regulating.
“In terms of the World Trade Organisation, provision is made for a country to resort to a safeguard measure if there is evidence of a surge of imports that will affect a country’s manufacturing sector.”
Bimha said the proposed review on duty and surtax on the 112 products was not in retaliation to the import ban.
However, Bimha’s remarks were in contrast to a statement posted by South Africa’s Department of Trade and Industry (DTI), in which Davies tells his counterpart of the continued introduction of trade restrictive measures on South African exports destined to Zimbabwe.
It said the two ministers agreed that Zimbabwe would respond to South Africa’s request that where there was no productive capacity in Zimbabwe, such products should not be subjected to trade restrictive measures.
“Zimbabwe committed to provide a response in preparation for the extraordinary committee of ministers meeting scheduled for August 24 2016. Furthermore, Minister Bimha indicated that Zimbabwe will apply for a derogation and will provide greater clarity on the duration of these measures,” DTI said.
At the meeting, Davies reminded Bimha that the integrity of the Sadc Trade Protocol was placed at risk by the introduction of a range of trade restrictive measures that limited intra-Sadc trade, but “have the effect of opening the Zimbabwean market to non-Sadc imports into Zimbabwe.”
“South Africa hopes that the government of Zimbabwe will respond positively to the concerns raised by South Africa to ensure that the Zimbabwean market remains open to South Africa while at the same time being sensitive to Zimbabwe’s industrial development and balance of payments challenges,” it added.
Early this month, Zimbabwe removed many products from the open general import licence, a move which riled regional neighbours, notably South Africa with DTI warning that such restrictions would have negative implications on intra-regional trade.
Goods that have been removed from the open general import licence and now require a permit to be brought into the country include coffee creamers (Cremora), camphor creams, white petroleum jellies and body creams.
Goods categorised as builders’ ware like wheelbarrows (flat pan and concrete pan wheelbarrows), structures and parts of structures of iron or steel (bridges and bridges section, lock gates, towers, lattice masts, roofs, roofing frameworks, doors, windows and their frames and threshold for doors, shutters, balustrade, pillars and columns) and plates, rods, angles, shapes section and tubes prepared for use in structures of iron and steel ware were also included.
Zimbabwe is South Africa’s fifth biggest export market in Africa. In 2015, Zimbabwe imported goods and services worth $1,8 billion from South Africa, according to DTI statistics.
South African firms like trading with Zimbabwe due to the strong currency the country uses at a time when the South African rand has been volatile.
