The Preferential Trade Agreement (PTA) between the Common Market of the South America (Mercosur) and the Southern African Customs Union (Sacu) has come into force, the Department of Trade and Industry (DTI) said on Friday.

Sidwell Medupe, DTI spokesperson said in a statement: “South Africa has completed all the administrative processes to facilitate the implementation of the Sacu (Botswana, Lesotho, Namibia, South Africa, and Swaziland) and the Mercosur (Argentina, Brazil, Paraguay, and Uruguay) Preferential Trade Agreement as from 21 October 2016”.

Medupe said in accordance with Article 36, the Sacu – Mercosur PTA entered into force on 01 April 2016, 30 days following Sacu’s acknowledgement of the notification from Mercosur that it had concluded the necessary legal requirements and South Africa will implement the Agreement retrospectively from the date of entry into force of the agreement, April 1.

The Sacu – Mercosur PTA was signed in the City of Salvador, Federative Republic of Brazil, on December 15, 2008, on the side of Mercosur, and in the City of Maseru, Lesotho, on 3 April 2009 on the side of Sacu.

Mercosur was the last party to notify completion of its internal processes on December 19, 2015.

“In either case, the preference margins range between 100% to 10%,” said Medupe.

The DTI said Sacu offered a Tariff Rate Quota for four agricultural products, which will be accessible on a first come first serve principle with no permit requirements. The tariffs will be reduced immediately on entry into force of the Agreement.

The PTA is the first trade agreement concluded by Sacu as a single entity, following the Sacu Agreement of 2002.

“This agreement is also the first with another developing region, giving meaning to the objectives of South – South cooperation. Thus, the PTA creates a basis for further integration and cooperation including possible further exchanges of tariff preferences, and cooperation on any other area,” the DTI said.

The DTI said the agreement was being administered by the South African Revenue Service.