A Critical Assessment of the Zimbabwe-South Africa Import Licensing Dispute

Abstract

The gravamen of the dispute between Zimbabwe and South Africa is the introduction by Zimbabwe of an import-licensing regime for various goods through Statutory Instrument 64 of 2016 (‘the Instrument’). Zimbabwe alleges that the Instrument is primarily aimed at protecting local industries and alleviating balance of payment challenges. Consequently, this article assesses the legality of the Zimbabwe import-licensing regime implemented primarily against goods from South Africa by examining the grounds of justification proffered by Zimbabwe. The article contends, first, that the Instrument is a quantitative restriction that violates Articles XI.1 and XIII of the General Agreement on Tariffs and Trade (GATT). Secondly, the article argues that the Instrument falls foul of the WTO Agreement on Import Licensing Procedures in that the administration of the measure is unduly burdensome and goes beyond the extent necessary. Thirdly, the article contends that the Instrument fails to fulfil the requirements for a valid ‘safeguard measure’ in the manner contemplated by Article XIX of GATT and the Agreement on Safeguards. In the alternative, the article argues that the urgency of the situation in Zimbabwe is such that any delay would cause irreparable damage and therefore entitles Zimbabwe to exercise the right to implement safeguard measures. Lastly, the article contends that the Instrument is substantially in line with the ‘balance of payments’ exception as postulated by the Understanding on the Balance of Payments Provisions of the General Agreement on Tariffs and Trade 1994 and GATT.