The Southern African Customs Union in transition

The democratization of South Africa in 1994 had important implications for the region. One of these was a desire to renegotiate the SACU Agreement, an exercise that took longer than originally anticipated but which produced an agreement that differs in fundamental respects from the agreement that has been arranging customs union management since 1969. The new chapter in the history of the world's oldest customs union will, on implementation, introduce a radically different revenue distribution formula, but most importantly, an institutional structure that provides for the democratic governance of the customs union through a number of supranational bodies that will take decisions on the basis of consensus. The big issue will remain whether the new agreement can reconcile the divergent economic development needs of South Africa, with its much larger and more industrialized economy, and those of the four smaller, less developed customs union partners.