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Trade deal ends long, difficult process

Cape Town. 140721. Minister Rob Davies at the Imbizo centre, Parliament. Pic COURTNEY AFRICA

Cape Town. 140721. Minister Rob Davies at the Imbizo centre, Parliament. Pic COURTNEY AFRICA

Published Jul 22, 2014


The initialling of the conclusion of the economic partnership agreement between a subgroup of the Southern African Development Community (SADC) and the EU signalled the end of a long and difficult road for both regions, Trade and Industry Minister Rob Davies said yesterday.

Seven SADC countries were involved in the talks, but Angola did not sign, leaving South Africa, Botswana, Lesotho, Mozambique, Namibia and Mozambique as signatories.

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The economic partnership agreement would improve market access for many products, especially those from the agricultural sector, Davies said.

The Department of Trade and Industry said the timing of the conclusion of the talks was significant because it beat the October deadline imposed by the EU.

Failure to meet the deadline could have resulted in Botswana, Namibia and Swaziland losing their preferential access to the EU for beef, fish and sugar products.

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“This has been 10 years of a negotiation period which has been difficult, with many stops and starts. But we think we have achieved a degree of improvement, which is to gain additional market access to the EU markets,” Davies said.

It would be commercially meaningful for South African producers, particularly those in the agricultural industry.

There had been an improvement from an earlier draft in which the EU had sought obligations in areas such as state procurement and competition.

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“Those have now been revised to just co-operation and not actual obligations, which will make it easier and more manageable to do trade,” Davies said.

The EU promised that the act of initialling the agreement ensured that the current market access would remain in place until the agreement came into force. This would happen after a “scrubbing process”, which would involve legal experts and cabinet members of the countries involved.

“This process will not affect any current trade agreement with the EU; we will proceed as usual,” he said.

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The economic partnership agreement will improve regional access from the levels enjoyed under South Africa’s bilateral trade, development and co-operation agreement.

The EU is SADC’s largest trading partner, and South Africa accounts for the largest share of SADC’s imports from and exports to the EU.

Exports to the EU are diversified, ranging from fruit to platinum and from manufactured goods to wine.

Through these negotiations, South Africa sought to preserve the functional coherence of the Southern African Customs Unions (Sacu), particularly with regard to maintaining the common external tariff.

South Africa has achieved improved market access for 32 agricultural products, with a significant improvement in the country’s access to the EU market for wine, sugar and ethanol, among other products

If ratified, the deal will allow South Africa to export 110 million litres of wine, 150 000 tons of sugar and 80 000 tons of ethanol to the EU without paying duties.

Davies said the quota on canned fruits would remain at 57 000 tons, but the duty on this item would be reduced over a period of 10 years.

SA Sugar Association executive director Trix Trikam said the industry welcomed the conclusion of the EU negotiations.

He said the industry would await for a pronouncement from the government on implementation of the agreement.

“At this point in time it is premature to comment on outcomes but suffice to say that we are indeed pleased with the recent progress,” Trikam said.

The new rules also contain provisions that will encourage South African clothing exports.

There is also improved access for South African exports of flowers and some dairy, fruit and fruit products.

“In addition, we obtained an agreement that the EU will eliminate export subsidies on agriculture goods destined for Sacu, as well as more effective safeguards to address damaging surges of imports,” the Department of Trade and Industry said in a statement.

Davies said that as much as the issue of poultry imports from Europe remained an important matter that needed to be dealt with, it was not covered substantially in the economic partnership agreement.

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