An intervention by the Western Cape’s Red Tape Reduction Unit has saved a city firm’s lucrative export deal.
Alan Winde, Minister of Economic Opportunities, yesterday (28 June 2016) visited Southern Spars, a Montague Gardens-based masts, booms and rigging firm.
Minister Winde said the company was assisted by the Red Tape Reduction Unit in April to obtain a customs release for the shipment of a yacht mast to Singapore.
“The delay was caused by a query around the description of the mast. As a result, the company’s clearing agent was required to upload additional documents. SARS Customs Division has 24 hours to examine these documents and clear the shipment. SARS was still within its allotted time period but there was a possibility that the clearance would happen too late for the mast to be loaded onto the vessel, the Oceans Highway. The vessel was set to berth in Port Elizabeth the next morning. The yacht mast is abnormal cargo and as a result shipping opportunities are limited. The company could not afford to lose the opportunity to ship, as the next shipment was a month later.”
“Through excellent co-operation with the teams at Transnet and SARS, our Red Tape Reduction team worked to ensure the shipment left on time. The incident highlighted the need for us to make it easier to process low-risk exports,” Minister Winde added.
During the visit, Minister Winde also outlined the possible impact of Brexit, the United Kingdom’s vote to leave the European Union.
The analysis was conducted by the Department of Economic Development and Tourism’s Economic Planning unit and the Department of Agriculture’s Business Planning and Strategy directorate.
“There are several factors which will influence the economic impact of the UK’s exit. The vote could preceed two years of negotiations. A comprehensive analysis of the effect will only be clearer once the EU announces how it will relate to the UK, outside of the EU relationship,” said Minister Winde.
Key observations and figures on trade with UK and EU highlighted in departments’ analysis include:
- In 2015 South Africa exported close to R43billion of goods to the United Kingdom. The most important product group was metals, but in the second place were edible fruits and nuts and in the fifth place were beverages, sprits and vinegar;
- Over the past decade the value of South Africa agricultural exports to the UK has increased from R3.1 billion to R8.7 billion;
- 7.2% of SA’s agriculture exports went to the UK last year;
- Over 20% of SA’s exports to the UK were agriculture-based;
- R8,7bn or 28% (2014) of WC’s R30bn exports are exported to the UK;
- The Western Cape’s Business Process Outsourcing sector could be impacted as the second financial capital moves from Britain to either Dublin or Frankfurt;
- The British pound has declined against other currencies and analysts have also indicated that the British consumer will have less purchasing power. One would have to monitor the impact this would have on British consumers ability to buy SA exports or visit our region
Minister Winde added that South Africa’s imports of UK whiskey had increased by 130% over the past ten years.
“More than 80% of South Africa’s whiskey imports come from the UK in 2015. Under the current Trade and Development Cooperation Agreement (TDCA) between South Africa and the EU, the applied tariff on imported whiskey from the UK is 0% with the result that it enters South Africa duty free. There is an argument for placing higher tariffs on UK whiskey imports. This fits in with our Project Khulisa strategy to promote our local high-end brandy.”
In terms of trade agreements, Minister Winde said SA’s current trade agreements are primarily with the EU, and therefore EU market access is not threatened. New agreements will have to be developed with the UK.
Minister Winde pointed to the Economic Partnership Agreement, a trade agreement between the European Union and six countries of the Southern African Development Community which was signed in Botswana this month.
Last month, Minister Winde met with a delegation from EU in the Western Cape. The EPA was one of the matters discussed during the engagement.
Under this agreement, the Tariff Rate Quota (TRQ) of South African wine to be imported duty-free into the EU is set to more than double from the current 50 million litres to 110 million litres in the first year of implementation for bulk and bottled wine.
“Current trade agreements between the EU and bi-lateral partners (e.g. the Economic Participation Agreement, or EPA, signed on 10 June 2016 between the EU and the SADC EPA Group) cannot just be cloned, new agreements will have to be negotiated with each trading partner. The sheer volume of this work will place immense pressure on the British trade negotiators. As an example, it took fifteen years to negotiate the EPA.”