PRETORIA - Friday marked the start of trade for South African firms under two new trade agreements, the trade and industry and competition department (dtic) said.
These agreements are with countries ready to trade under the African Continental Free Trade Agreement (AfCFTA); and with the United Kingdom following Brexit, the dtic said in a statement.
South Africa had put in place the legal and administrative processes for the start of trade under the AfCFTA on January 1, 2021 following a decision by the 13th extraordinary session of the assembly on the AfCFTA on December 5, 2020 to start trading under the AfCFTA on the basis of legally implementable and reciprocal tariff schedules and concessions with agreed rules of origin, the department said.
The AfCFTA agreement had been signed by 54 of the 55 African Union (AU) member states and 34 countries had already deposited their instruments of ratification to the AU Commission and became state parties.
The current state parties were Angola, Burkina Faso, Cameroon, Central African Republic, Chad, Côte d’Ivoire, Congo, Djibouti, Egypt, Eswatini, Ethiopia, Equatorial Guinea, Gabon, The Gambia, Ghana, Guinea, Kenya, Lesotho, Mali, Mauritania, Mauritius, Namibia, Niger, Nigeria, Rwanda, Saharawi Arab Democratic Republic, Sao Tome and Principe, Senegal, Sierra Leone, South Africa, Togo, Tunisia, Uganda, and Zimbabwe.
A number of the signatory countries had started to put the domestic administrative arrangements in place to enable trading under the new terms. These would be progressively expanded within the next few months, the department said.
In addition, trade for local firms with the UK commenced on Friday under the new economic partnership agreement between six southern African countries and the UK, replacing the European Union (EU) partnership terms for the UK market that was in place until December 31, 2020.
Trade, Industry, and Competition Minister Ebrahim Patel called on South African farmers and manufacturers to gear up for the new opportunities in export markets.
“Trade with the rest of the continent is a critical source of output and jobs growth. African countries recognise that industrialisation is critical to the development of the continent," he said in the statement.
The new agreement that came into effect on Friday would take some time to become fully operational, but had the potential to be transformative for Africa, breaking the "dependence on a neo-colonial pattern of trade that characterised trade".
"Our continent exports raw materials and imports finished goods, with substantial value added in the process,” he said.
“Covid-19 simply reminded us of the enormous price we pay for not developing advanced economies. This is Africa’s moment to build resilient, innovative economies on the back of the large markets that the free trade agreement puts in place. It will take dedication and disciplined implementation over the next few years to fully realise the benefits,” Patel said.
The AU summit decision to commence trade under the AfCFTA was historic and a milestone in the continent’s long-standing efforts to integrate and industrialise.
“AfCFTA presents South African producers and manufacturers with an opportunity for expansion to new markets in West, Central, and North Africa, and provides alternative markets for the export of value added goods, as well as services. In addition, exports to the United Kingdom can continue seamlessly with the new agreement with the UK in place,” Patel said.
The UK agreement effectively retained the terms of trade in the existing EU agreement and would govern the bilateral trading relationship between each of the Southern African countries (South Africa, Lesotho, Eswatini, Namibia, Botswana, and Mozambique) and the UK. Both the EU and the UK were significant trading partners for South Africa, the dtic said.
- African News Agency (ANA)