The new Southern African Development Community (SADC)–European Union (EU) Economic Partnership Agreement (EPA) has become effective four months after concluding the new trade deal.
The new SADC-EU EPA framework, which was officially signed in June, will replace the trade provisions of the existing bilateral Trade, Development and Cooperation Agreement between South Africa and the EU and will allow for the harmonisation of the trading regime between the Southern African Customs Union (Sacu) as a whole and the EU.
“The EPA is intended to be development-oriented and allow for deeper regional integration. Overall, the EPA offers new opportunities for South African exporters and importers in many areas,” South Africa’s Department of Trade and Industry and the EU Delegation to South Africa said in a joint statement on Monday.
It also ensures that the Sacu common external tariffs are maintained and allows for the correction of some of the South Africa-EU trade imbalances, particularly in the agriculture sector, which gain improved market access into the EU for more than 30 products and benefits such as the phasing out of the EU export subsidies.
“The EU absorbs about one-fifth of all South African exports, while imports account for one-third. While South African exports have traditionally included mostly primary products, agricultural and manufactured goods have gained prominence among the top ten South African exports, with motor vehicles comprising 21% of its exports to the EU last year,” the statement outlined.
About 99% of all South African products will have preferential market access in the EU, compared with the 95% under the old agreement, while 96% of the products will enter the EU market without being subjected to customs duties or quantitative restrictions.
This included 94% of previously excluded fisheries products that will now enter the EU market duty free and quota free, with the remainder to be phased in over a specified period.
“South Africa will now be allowed to export 150 000 t of sugar and 80 000 t of ethanol duty free, while the quota for wine exports to the EU more than doubles from 50-million litres to 110-million litres.”
Other products include flowers, dairy, fruit, fruit juice and yeast.
Meanwhile, wheat, sugar confectionery, barley, cheese, pork, cereal, butter and ice cream from the EU will gain better market access into Sacu.
The bilateral deal concluded between South Africa and the EU on the protection of Geographical Indications will result in the protection of South African favourites Rooibos, Honeybush and Karoo Lamb, as well as 102 wine names from areas like Paarl and Stellenbosch.
The EU will receive protection on 251 product names – about 120 names are for wines; 106 are agricultural product names such as special meats, cheeses, olives, and others; 20 names are for spirits and five are beer names.
“The EPA also allows for more flexibility on rules of origin, so that countries can use inputs from their EPA neighbours without forfeiting EU access as well as from non-EPA countries that benefit from duty-free, quota-free access to the EU,” the joint statement pointed out.
The EU and the SADC EPA group, namely Botswana, Lesotho, Namibia, Mozambique, South Africa, Swaziland and Angola, took more than a decade to reach this deal. Angola did not sign the agreement but was part of the negotiations and may join the group at any time in the future.