According to SAnews Cape Town – Trade and Industry Minister Rob Davies says a new trade deal which has been signed with the European Union (EU) will see more South African agricultural products being exported to Europe.
Under the new agreement, South Africa’s duty-free wine exports to the European Union will double.
The Minister on Friday briefed the media in Cape Town on the signing of the Economic Partnership Agreement (EPA) between the EU and the Southern African Customs Union (SACU). The EU is South Africa’s traditional trade partner.
South Africa, together with Botswana, Lesotho, Mozambique, Namibia and Swaziland, signed the agreement on 10 June 2016.
The new deal replaces the trade chapter in the bilateral agreement between the EU and South Africa, the Trade Development and Cooperation Agreement (TDCA) signed in 2000. Under the TDCA, only 65% of SA’s agricultural products were covered. The reverse was the case on EU, 80% products.
“We saw the possibility of improving some material improvements in market access, in some of the commitments we made to the European Union in terms of policy issues.
“The [improvements] are mostly in the areas of agricultural products, in fish for example, the question of fisheries tariff liberalisation was held up under the TDCA because there were all kinds of demands for there to be fisheries license agreements, that has all been put aside and under the EPA agreement there will be a liberalisation of tariffs on fish products without having to concede fishing rights to EU companies,” Minister Davies said.
Improved market access opportunities
The Minister said the newly signed agreement will provide improved market access opportunities for South African products, including a significant improvement in quota for wine and new market access for sugar and ethanol.
The new deal further provides for extensive “cumulation”, including with other African countries, which will facilitate intra-regional trade and industrialisation across the African continent.
The Rules of Origin on clothing have also been simplified in the EPA and will encourage SA clothing exports to the EU.
“On particular products, wine, there is a quota with zero duties on bottled wine. At the moment under the TDCA, the quota is 50 million litres - now that will rise to 110 million litres, which is an additional 60 million litres of wine that can enter the EU duty free.”
Minister Davies explained that with regards to sugar, there was a no duty free quota. Under the TDCA, there was a tariff of between 34 and 42 Euros per 100 kilograms. Now, 150 000 tons of sugar will be able to enter the EU market duty free.
“[Regarding] ethanol, there was a duty of between 10 and 19 Euros per hectare litre. Now, 80 000 tons of ethanol can enter the EU.
“There were also improvements on market access in terms of canned fruit and a few other products,” he said.
Minister Davies said he was satisfied that the new agreement provided South Africa with an improvement in valuable opportunities commercially in to the European market.