I have previously written about Zimbabwe’s Statutory Instrument 64 of 2016 (SI 64 of 2016), for example, here and here and here.
There remains more perspectives to be interrogated in greater detail on SI 64 of 2016 concerning specific dimensions to the policy. I plan to look into these as we go.
If this is an area that interests you, keep in touch with the blog.
In the meantime, following some intriguing inquiries via email, I thought it would help to respond to certain Frequently Asked Questions (FAQs) about SI 64/2016.
So here we go…
What is SI 64 of 2016?
Statutory Instrument 64 of 2016 is an administrative legal instrument that was gazetted in June 2016 by the Government of Zimbabwe and came into effect on the 1st of July 2016. The instrument gave the far reaching trade protectionism policy legal legs to stand on. SI 64 of 2016 removed some 40 plus goods from the Open General Import License (OGIL) regime. These products included bottled water, mayonnaise, salad cream, peanut butter, jams, maheu, canned fruits and vegetables, pizza base, yoghurts, flavoured milks, dairy juice blends, ice creams and cultured milk among other items. The implication is that in order to import these products, one must first apply for a license through the Ministry of Industry and Commerce (I will have time in a future post to test the current licensing process against international trade law provisions). Keep in mind that SI 64 of 2016 is only but a part of a bigger trade policy rationale.
Are there other similar measures currently in place apart from SI 64 of 2014?
Yes there are. Many people are not aware that SI 64 of 2016 is one of as many as six or seven other such statutory instruments put in place by the government through the Ministry of Industry and Commerce since 2014. The Ministry of Agriculture, Mechanisation and Irrigation Development also has a few other older statutory instruments regulating agriculture related imports into the country. SI 64 of 2016 became prominent primarily because it covered a bigger basket of goods, which goods happened to be those directly affecting ordinary consumers and small scale cross-border traders
What is the rationale behind the policy?
The rationale behind SI 64 of 2016, and other similar instruments currently in effect, is to control the amount of imports entering the domestic market. This is necessary, according to the Government of Zimbabwe, to stimulate internal demand and help the domestic industry come around following years of de-industrialization. The trade restriction policy is also meant to encourage those currently exporting to Zimbabwe to set-up industries in Zimbabwe so as to create domestic employment opportunities. Furthermore, the government views SI 64 of 2016 as playing an important role in preserving foreign currency through reduced imports of basic goods which the country believes has capacity to produce internally. SI 64 of 2016 is part of a bigger goal of correcting a dreadfully negative balance of payments position.
Is SI 64 of 2016 a ban on imports?
No, in technical international trade language the measure is not a ban. However, in the eyes of most of those who resent or are hit hard by the measure and in ordinary street language, it becomes a ban. This explains the confusion that engulfed the media when the measure was first announced with some media outlets widely reporting the policy as a ban.
If it’s not a ban, then what is it?
SI 64 of 2016 is a quantitative trade restrictive measure. It is mostly focused on the amount or level of imports coming into the domestic market from foreign markets which include the SADC region and beyond. At least this is how restrictive measures are conceived in international trade. This means the goods listed under SI 64 of 2016 and therefore removed from the OGIL can still be allowed to enter the domestic market based on the capacity of the domestic industry to produce the said goods. This also means officials at the Ministry of Industry and Commerce must keep a close tab monitoring imports data of the restricted goods in order to determine when and how much see license requirements to allow and to also ensure no shortages occur on the domestic market (whether or not this can be done or is being efficiently done is ripe for analysis).
How did government choose the products to include on the list?
News reports and publicly available documents show that the government relied for the most part on stakeholder representations. Zimbabwe’s private sector, primarily industry and commerce, played a central role in convincing the government to include certain goods on the list, based on domestic industry’s capacity to produce. This is also the case with the other statutory instruments before SI 64 of 2016. The Confederation of Zimbabwe Industries (CZI) is among private sector stakeholders that effectively lobbied government to consider the far reaching trade restriction policy. SI 64 of 2016 is, in fact, a result of a long protracted behind the scenes campaign by Zimbabwe’s industry and commerce representatives.
What is the legal standing of SI 64 of 2016 in international trade?
Without pinpointing, at least in public the exact provisions violated, South Africa which is Zimbabwe’s biggest trading partner, has argued that Zimbabwe’s trade restrictions infringes on the provisions of the SADC Protocol on Trade. Zimbabwe’s Minister of Industry and Commerce, Michael Bimha, has previously insinuated that SI 64 of 2016 is along the lines of WTO justifiable safeguard measures. Suffice to say, if it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck. That being the case, Article 20 of the SADC Protocol on Trade allows Community members to use safeguard measures to protect domestic industry from serious injury or threat of serious injury. The WTO under Article XIX of GATT 1994 and The Agreement on Safeguard Measures sets-out very strict procedures to be followed which Zimbabwe seem to have not followed. I look forward to exploring more angles on this soon.
If the WTO has procedure to be followed, and Zimbabwe didn’t follow it, why is that so?
This is a good question providing an opportunity to highlight the inevitable seeming contradiction between law and politics in international affairs. It is also a reminder that international institutions will fall short. Realism is a powerful international affairs theory explaining why countries go against the provisions of international law from time to time. Just about any government in the world has at one point or another taken measures to maintain its survival among the global family of nations. These measures include trade measures. All countries remain prepared to do so regardless of how democratic or lawful they may appear to be in your eyes and in their day to day international relations. Realism insists that states are self-centered and seek national interests first and foremost. Found here is my post in relation to protectionism in international trade.
Can SI 64 of 2016 be legally disputed at the WTO?
Yes, the policy can certainly be brought before the WTO’s Dispute Settlement Body (DSB) as a dispute against Zimbabwe. However a few things to keep in mind are that there should be a clear point or points of dispute, its a long and tedious process and that only governments and not individuals or companies can bring a dispute before the WTO’s DSB.
How can an aggrieved party approach the WTO?
Individuals and companies are required to go through respective governments to bring any disputes before the WTO (I have an upcoming post scheduled to explore this in greater detail). In the case of Zimbabwe based traders, the legally constituted Competition and Tariffs Commission (CTC) located in Harare would be the initial point of call.
What has SADC done about Zimbabwe’s SI 64 of 2016?
At least in the public domain as reported via the media, South Africa has raised issues on Zimbabwe’s general trade restrictions including SI 64 of 2016 through its own public media statements as found here and here and even here. It’s not clear if other Community members have done something similar. Seemingly at the behest of South Africa, SADC is currently (April 2017) seized with the issue through the SADC Committee of Ministers on Trade (CMT) as per the provisions of the Article 31 of the SADC Protocol on Trade. Unlike the WTO system, the SADC system of resolving trade disputes is not easy to follow. Information is not widely publicized even on the official SADC website. Researchers and interested parties tend to learn more about what goes on behind the scenes through intermittent comments made to media by officials.
Is SI 64 of 2016 working?
Answers range based on whom you choose to ask. Consumers will tell you its not working because it has reduced variety on the shelves, taken away favorite brands and increased prices. Small-scale cross border traders will advise you that SI 64 of 2016 has “killed” their livelihoods. The Zimbabwe Revenue Authority (ZIMRA) will point to improved revenue collection. Industrialists such as CZI will maintain that capacity utilization has gone up, so would the Reserve Bank of Zimbabwe (RBZ) welcome a decline in loss of foreign currency due to a reduction in excessive imports. Measured against stated objectives by the Ministry of Industry and Commerce the Minister has made a case in Parliament that there has been some positive outcomes associated with the trade restrictions. The Deputy Minister of Industry and Commerce, Chiratidzo Mabuwa, has presented her Ministry’s considered successes of SI 64 of 2016 in an article published in a government owned media outlet.
How long will SI 64 of 2016 remain in place?
According to the SADC Protocol on Trade and the WTO disciplines governing the use of the Safeguard Mechanism in international trade, Zimbabwe has a maximum of 8 years to apply the measures. This, however, assumes that the measures would not be disputed at the WTO or that SADC will not make a positive determination on South Africa’s dispute. Zimbabwe’s Minister of Industry and Commerce, Michael Bimha, has also indicated that adjustments to the restrictions is necessary. Evidence on the ground indicates that this has been the case since the restrictions came into effect back in 2016. It would appear the government is aware of the problems the policy has stirred in its international trade relations. Alternative policies currently afoot such as local procurement policy could gradually replace or at least significantly dilute SI 64 of 2016 as we know it today.