EU trade agreement to boost Western Cape wine exports

21st June 2016 By: Anine Kilian - Contributing Editor Online

Western Cape Economic Opportunities Minister Alan Winde has welcomed the signing of an Economic Partnership Agreement (EPA) between the European Union (EU) and six Southern African Development Community countries, which would double the Tariff Rate Quota (TRQ) of South African wine to be imported duty-free into the EU.

The EPA was signed in Botswana earlier this month.

“This is the first time the EU has signed a free trade agreement (FTA) in which the EU gives up the right to use agricultural export subsidies,” he said, adding that this was a significant step towards equaling the playing field for Western Cape farmers.

In a press statement released on Tuesday, Trade Commissioner Cecilia Malmström, who signed the EPA agreement on behalf of the EU, said that while South Africa and the EU had an existing agreement in place, the EPA would enhance market access for South Africa.

“For South Africa the situation is different – given that we've had a trade agreement for some time. But the deal is still a big improvement, because it extends the existing market access to new products, like wine, fruit, ethanol, sugar and dairy products,” she said.

She noted that South African geographical indicators such as for wines, Karoo meat and Rooibos tea would be protected.
Winde said the development protected the geographical indicators of the province’s high-quality products from several regions, including wines from Paarl and Stellenbosch.

“Through Project Khulisa, which was launched last year, we identified growing our wine industry as a focus area. It is our goal to increase exports to strategic markets. Our objective is to double wine exports to key destinations by 2025,” he said.

He added that the Western Cape was adamant on increasing exports of its bottled wine and was seeking to add up to 100 000 jobs in the agroprocessing sector by 2019.

Dairy exports would also be impacted by the EPA and Winde said the Western Cape Department of Agriculture’s new residue testing facility would also improve market access.

“Our plan to establish a R9-million residue testing facility at our Helderfontein veterinary laboratory is on track and should be operationalised later this year. Once live, this facility will serve as a base for the testing requirements of key destinations to which we can export our products, hopefully improving the value and volume of goods we move overseas,” he said.

He stated that a 5% increase in wine exports would lead to 986 new jobs, and two-thirds of these jobs would be off farm.