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THE TRADE DEVELOPMENT AND COOPERATION AGREEMENT BETWEEN
THE EU AND SA
National Department of Agriculture
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SA exports faced high tariffs in EU
requested preferential access - Lomé
EU proposed FTA and qualified Lomé membership
Lomé member (qualified) - March 1999
Negotiations lasted 3 years (21 official negotiating rounds)
Concluded beginning 1999 after discussions between
Minister Erwin and Commissioner Pinhiero and
compromise on port and sherry
• Agreement is Trade, Development and Co-operation
agreement - covers more than just trade, all aspects not
dealt with under qualified Lomé membership
National Department of Agriculture
Aspects covered by TDCA:
• Political dialogue
• Provisions for a FTA
• Trade related issues
• Economic co-operation
• Financial assistance and development cooperation
• Social and cultural co-operation
Also, SA agreed to negotiate separate:
• Wines and Spirits agreement
• Fisheries agreement
SA NEGOTIATING POSITION
National Department of Agriculture
• NDA responsible for agricultural component of negotiations
• Steering Committee established (became ATF in 1997)
SA position included the following points:
• favorable market access for SA agric exports (and potential
exports)
• Rules of origin procedures should be identified
• Agreement should be asymmetric in favor of SA
• Should address concerns regarding EU export refunds
• Mutually beneficial certification procedures (SPS
requirements)
• Should take into account possible impact on SACU and
SADC
COVERAGE OF THE AGREEMENT
National Department of Agriculture
• 90% of trade between EU and SA will be duty
free (EU will liberalize 96%, SA - 86%) [WTO
requirement - Article 24]
• 70% of agric. Trade duty free
• EU will liberalize 61% of agric. imports from SA
[74% including tariff quotas]
• SA will liberalize 83% of agric. imports from the
EU
• EU quotas for cheese, cut flowers, proteas,
canned fruit, fruit juices, wine and sparkling wine
• SA quotas for cheese, wine and sparkling wine
PRODUCTS ON THE RESERVE LIST
National Department of Agriculture
• EU excluded (reserve list) beef, dairy products,
cut flowers, fresh fruit, sweetcorn, rice, maize,
sugar, canned fruit and vegetables, fruit juices,
wine
• SA placed beef, mutton, maize, wheat, dairy and
sugar on the reserve list
• Will be subject to periodic reviews (no later than
5 years after entry into force of the agreement)
SAVINGS ON CUSTOMS DUTIES - SA
EXPORTS TO THE EU
National Department of Agriculture
• Short term (within 3 years after entry into force)
dairy R200 million (cheese quota)
wine and spirits R150 million
fresh fruit R100 million
canned fruit R 100 million
• Long term (10 years after entry into force)
fresh fruit R1 billion
dairy R700 million
wines and spirits R500 million
• Overall possible net gain for SA (agric) of R2 billion
OTHER ASPECTS OF THE AGREEMENT
National Department of Agriculture
• Wines and Spirits agreement: Compromise reached
on port and sherry. W&S agr. Close to conclusion.
• Export subsidies: No export refunds on cheese
quota. Agricultural safeguard clause included in the
agreement.
• Protocol on Rules of Origin: Prohibit trade deflection
within FTA. Determine whether imports originating or
not. All preferential trade under the agreement
subject to certificate of origin. SARS responsible for
implementation and administration. DTI workshops.
• SPS equivalency Agreement: Backlogs in EU. Will
accommodate SA as soon as possible
IMPLEMENTATION
National Department of Agriculture
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Signed on 11 October 1999
To be ratified by EU and SA parliaments
Will be a mixed agreement
Transitional agreement for aspects of community
competency (including trade)
• Implementation - 1 January 2000
THE EUROPEAN UNION - SA’S MOST
IMPORTANT TRADE AND INVESTMENT
PARTNER
National Department of Agriculture
• 30% SA exports destined for EU
• 45% SA imports originate in EU
• 40% SA agricultural exports destined for EU
• 20% agricultural imports originate in EU
[Ave 1994 to 1996 SACU data]
• Most important SA agric exports to EU - wine (16%), citrus
(12%), grapes (11%), apple&pears (11%), canned fruit and
veg (10%)
[1996 SACU data]
CHALLENGES FACING SA AGRICULTURAL
SECTOR
1 Increased competition from EU imports
National Department of Agriculture
2 Utilising export opportunities
3 Meeting EU standards - SPS and other
4 Effective implementation of rules of origin
5 Implementation a monitoring system safeguards
IMPLICATIONS FOR SADC AND SACU
National Department of Agriculture
• Possible impact - increased competition for
BLNS and SADC products on SA market; trade
diversion into SADC and BLNS; diversion of
investment into SA
• Provisions in agreement to compensate BLNS
for loss in revenue (financial windows for
structural adjustment)
• SADC - will have to utilize provisions in Lomé
• SA/EU agreement and SADC agreement need to
be implemented simultaneously
IMPLICATIONS FOR AGRIC TRADE
POLICY
National Department of Agriculture
• TDCA important milestone in development of SA trade
policy.
• Worldwide trend - strategic trade negotiations to secure
improved and equitable market access conditions.
• Agricultural trade policy located within framework of
SA’s global relations.
• Requires new global strategy that
a. Prioritises exports and investment thrusts into region
or countries identified as offering optimal opportunities;
b. Restructures and redevelops overseas economic
representation to achieve these objectives; and
c. Negotiates favourable terms of engagements with
foreign economic interests or entities
IMPLICATIONS FOR AGRIC TRADE
POLICY (cntd.)
National Department of Agriculture
• re-evaluation of traditional trading pattern, shift
from North-South to South-South (without
neglecting traditional partners).
• Butterfly approach - Africa and Europe center;
Asia and America wings (future growth)
• Trend to trade liberalization irreversible:
- use tariffs only for unfair competition.
- greater use of countervailing and anti-dumping
measures.
• Continuation of relatively high tariffs questionable
(SADC and EU more than 50% of agric imports).
IMPLICATIONS FOR AGRIC TRADE
POLICY (cntd.)
• Aim to improve global market access conditions
through WTO:
National Department of Agriculture
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Global reduction in tariff levels
Removal of trade distorting support
measures
Strengthening of existing multilateral
agreements aimed at trade facilitation (e.g.
SPS or TBT agreements)
• Strategic alliances (CAIRNS group and nonaligned movement).
EXPORTS TO EU
GRP 1
National Department of Agriculture
GRP 2
GRP 3
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GREASY AND DEGREASED SHORN WOOL
RAW HIDES AND SKINS OF SHEEP AND BOVINES
FRESH GRAPEFRUIT (1 MAY TO 31 OCT)
FRESH GUAVAS AND MANGOES
SHELLED GROUND NUTS
OIL CAKE AND OTHER SOLID RESIDUES
HAIR OF CAMEL OR YAK
SWEET POTATOES
FRESH PLUMS (1 JAN TO 10 JUNE)
SULTANAS (CONTAINERS >2KG)
FRESH GRAPEFRUIT (1 NOV TO 31 DEC)
DRIED GRAPES (CONTAINERS >2KG)
CANE MOLASSES
TOBACCO
DRIED APRICOTS, PEARS AND APPLES
LOGANBERRIES, GOOSEBERRIES AND WHITE CURRANTS
FRESH GARLIC
FRESH CLEMENTINES, MONREALES, SATSUMAS, TANGELOS, ORTANIQUES,
MALAQUINAS (1MARCH TO 31 OCT)
FRESH CUT FLOWERS (1 NOV TO 31 MAY)
PINEAPPLES (PREPARED OR PRESERVED)
FRESH APRICOTS (1 AUG TO 31 DEC; 1 JAN TO 31 MAY)
FRESH ONIONS
FRESH PEACHES AND NECTARINES (1OCT TO 31 DEC)
DRIED MUSHROOMS AND TRUFFLES
FRESH OR CHILLED FLAP MUSHROOMS
DRIED PRUNES
FRESH PLUMS (1OCT TO 31DEC)
GRP 3A
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FRESH TABLE GRAPES (1JAN TO 14JULY)
FRESH AVOCADOS
FRESH MELONS
GRAPEFRUIT JUICE
FRESH NECTARINES (1JAN TO 10 JUNE)
FRESH PINEAPPLES
DRIED PEACHES
GRP 4
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FRESH NAVELS
WINE AND SPARKLING WINE
FRESH ORANGES (16 MAY TO 15 OCT; 1 TO 15 OCT)
FRESH TABLE GRAPES (21NOV TO 31 DEC)
FRESH ASPARAGUS
GRP5
PARTIAL 1
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CHOCOLATES AND CHOCOLATE PRODUCTS IN THE FORM OF PRALINES
PASTES, MARZIPAN, NOUGAT AND OTHER PREPARED SUGAR
CONFECTIONARY
GUM AND JELLY CONFECTIONARY
CHOCOLATE AND OTHER CONFECTIONARY CONTAINING COCOA, IN
BLOCKS, SLABS OR BARS
TOFFEES, CARAMELS AND SIMILAR SWEETS
BOILED SWEETS
PEAR JUICE
BISCUITS
National Department of Agriculture
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IMPORTS FROM EU
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MALT OF BARLEY (NOT ROASTED)
SAUSAGE CASINGS
MIXTURES OF ODORIFEROUS SUBSTANCES (USED IN FOOD AND DRINK
INDUSTRIES)
TURKEY MEAT
STEARIC ACID
OLEIC ACID
ETHERIFIED OR ESTERIFIED STARCHES
GRP 1
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BEER MADE FROM MALT
CHERRIES
PREPARED RICE
OLIVE OIL (OTHER THAN VIRGIN)
ROASTED COFFEE
MINERAL WATERS AND AERATED WATERS
STOUT
CULINARY HERBS
PREPARED MUSTARD
RYE FLOWER
GRP 2
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MIXTURES OF CHEMICALS AND FOODSTUFFS (USED IN PREPARATION OF HUMAN
FOODSTUFFS)
POTATO STARCH (PACKINGS >1,5KG)
INDUSTRIAL FATTY ALCOHOLS
GLUCOSE AND GLUCOSE SYRUP
APPLE JUICE
GOLDEN SYRUP
ACTIVE YEASTS
GRP 0
National Department of Agriculture
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GRP 3
National Department of Agriculture
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WHISKIES
INDUSTRIAL FATTY ALCOHOLS
INDUSTRIAL MONOCARBOXYLIC FATTY ACID
TALL OR FATTY ACIDS
ACID OILS FROM REFINING
UNDENATURED ETHYL ALCOHOL OF AN ALCOHOLIC STRENGTH BY VOLUME
OF 80% OR HIGHER
GINNED COTTON (NOT CARDED OR COMBED)
UNCOOKED PASTA (NOT CONTAINING EGGS)
VIRGIN OLIVE OIL
WHEY
UNFORTIFIED WINE
CHAMPAGNE
CIGARS, CHEROOTS AND CIGARILLOS
CIGARETTES
TOBACCO, NOT STEMMED OR STRIPPED
MOST IMPORTANT AGRIC EXPORTS
TARIFF LINE
National Department of Agriculture
FRESH TABLE GRAPES, 1 JANUARY TO 14 JULY
(EXCL. THE VARIETY EMPEROR, FROM 1 TO 31
JANUARY) [08061029]
FRESH NAVELS, NAVELINES, NAVELATES,
SALUSTIANAS, VERNAS, VALENCIA LATES,
MALTESE, SHAMOUTIS, OVALIS, TROVITA AND
HAMLINS, FROM 1 JUNE TO 30 SEPTEMBER
[08051038]
WHITE WINE OF FRESH GRAPES, IN CONTAINERS
HOLDING =< 2 L AND OF AN ACTUAL ALCOHOLIC
STRENGTH BY VOLUME OF =< 13% VOL [22042179]
FRESH PLUMS, FROM 1 JANUARY TO 10 JUNE
[08094010]
FRESH OR DRIED AVOCADOS, FROM 1 JUNE TO 30
NOVEMBER [08044090]
MIXTURES OF FRUIT, IN WHICH THE WEIGHT OF NO
SINGLE FRUIT EXCEEDS 50% OF THE TOTAL
WEIGHT, PREPARED OR PRESERVED, NOT
CONTAINING ADDED SPIRIT BUT CONTAINING
ADDED SUGAR, IN IMMEDIATE PACKINGS OF A NET
CONTENT NOT EXCEEDING 1 KG (EXCL. MIXTURES
OF NUTS, [20089274]
CURRENT LIBERALISATION
TARIFF
(YEARS)
13,7%
Equal steps over
10
3,5%
6 and 10
13,7Euro/ Quota – 32 mio l;
Hl
0%
6,7% 6,9%
5,6%
14,2%
Within 3
Equal steps over
10
Quota 18000t;
7,1%