History of SACU - About SACU | SACU

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History of SACU

SACU predates modern trade and customs Agreements, and it remains the oldest functioning Customs Union. It was originally established by the British colonial power in the 1880s. In 1889, a Customs Union Convention was held between the British Colony of the Cape of Good Hope and the Orange Free State Boer Republic, preceding the formal establishment of SACU in July 1910. Later, in 1891, this Customs Union Convention was joined by British Bechuanaland and Basutoland while Natal joined in 1899

Following the end of the South African War, a new Customs Union incorporating the previous Territories of the original Customs Union plus the Transvaal and Southern Rhodesia, was formed in 1903. The Kingdom of Swaziland joined this enlarged Customs Union in 1904 and North-Western Rhodesia in 1905.

In 1910, the Union of South Africa was established. Following its establishment the Union of South Africa entered into a new set of Customs Union Agreements with Southern & Northern Rhodesia, and with the British High Commission Territories of Bechuanaland, Basutoland and Swaziland Protectorates. These new Agreements superseded the earlier Customs Union Agreements. Under the Agreement of 1910, a Revenue Sharing Formula was administered by the Union of South Africa. Southern and Northern Rhodesia did not sign this Agreement, but retained various exemptions until 1965, when Southern Rhodesia faced international sanctions. During this period, a Free Trade Area was established between the Federation of Rhodesia and Nyasaland and the Bechuanaland Protectorate.

The political changes, following the independence of Botswana and Lesotho in 1966, as well as Swaziland in 1968, necessitated a renegotiation of the Agreement of 1910. This culminated in the conclusion of the SACU Agreement between Botswana, Lesotho, South Africa and Swaziland in 1969. Further political and economic developments of the early 1990s, warranted a complete renegotiation of the Agreement of 1969, in particular, Namibia’s independence in 1990 and the dawn of democracy in South Africa in 1994. Negotiations to reform the Agreement of 1969 started in 1994, and a new Agreement was signed in 2002, which entered into force on the 15th July 2004

Like other customs unions, a key feature of SACU is the application of a single tariff regime − the Common External Tariff (CET). This means the Member States form a single customs territory which provides for a free movement of goods where tariffs and other barriers are eliminated on all trade between them. The CET applies to goods imported from all territories that are not members of SACU. 

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