South Africa and European South Africa and European Union FTAUnion FTA

South Africa and European South Africa and European Union FTAUnion FTA

Presented by: Lillian Rantho

Directorate: International Trade

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ContentContentContentContent

• Background

• Overview of the Agreements

• Specific benefits and opportunities

• MFN Rates vs Preferential Rates

• Market Access Requirements

• Contact Details

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BackgroundBackgroundBackgroundBackground

European Union (EU) is the main trading partner of South Africa – 50% of SA agricultural was exported to EU in 2007

EU consists of 27 Member States - Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, United Kingdom, Romania and Bulgaria

South Africa access EU markets through the scheme called Generalized System of Preferences and Trade, Development and Cooperation Agreement

Generalized System of Preferences is scheme whereby EU extend unilateral special treatment to developing countries (SA included)

TDCA – free trade agreement between South Africa and EU

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Overview of the TDCAOverview of the TDCAOverview of the TDCAOverview of the TDCA

TDCA was signed in 1999 and entered into force in 2000

Liberalization period - Immediate liberalization and transitional liberalization over 10 years by the European Union and 12 years by South Africa

70% of SA agricultural trade duty free after 12 years.

EU will liberalise 61% of agricultural imports from SA (72 if partial liberalization quotas are included).

Agricultural Safeguard Clause

Co-operation in Agriculture

TDCA – subject to review no later five years after entry into force

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Specific benefits and opportunities - liberalization Specific benefits and opportunities - liberalization schedule of EU (Annex IV)schedule of EU (Annex IV)Specific benefits and opportunities - liberalization Specific benefits and opportunities - liberalization schedule of EU (Annex IV)schedule of EU (Annex IV)

List 0 Immediate elimination of duties upon implementation (1 January 2000)

List 1 Elimination over 3 years in 4 equal steps, reaching zero duty on 1 January 2003

List 2 Elimination over 10 years, in 11 equal steps, reaching zero on 1 January 2010

List 3 Elimination between years 3 and 10, in 8 equal steps, reaching zero on 1 January 2010

List 4 Elimination between years 5 and 10, in 6 equal steps reaching zero on 1 January 2010

List 5 Processed agricultural products - fixed preferences. Consists of industrial and agricultural

component

List 6 Tariff quotas offering fixed preferences for certain volumes

List 7 Reserve list (products considered sensitive) - Excluded from liberalization subject to

periodic reviews.

List 8 Omission list- Protected EU denominations (products related to Geographical Indications

and designation of origin of agricultural products)

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Specific benefits and opportunities cont’dSpecific benefits and opportunities cont’dSpecific benefits and opportunities cont’dSpecific benefits and opportunities cont’d

Lists Some of the agricultural products covered in specific lists:

List 1 Onions (HS 0703), Margarine (HS 1517) etc.

List 2 Sunflower seed (Hs 1512), Fresh or chilled potatoes (Hs 0701) etc.

List 3 Cabbages (Hs 0704), Onions (Hs 0703), Lettuce (Hs 0705) etc.

List 4 Grapes, apricots, cherries, wheat, meat of sheep or goats, meat of swine etc.

List 5 Processed Agricultural products – buttermilk (HS 0403), chocolate (HS 1806), bread

(HS 1905), etc.

List 6 Products are subject to tariff quota’s : cheese and curd, cut flowers, canned pears,

apricots and peaches, fruit juices and wine

List 7 Live bovine (HS 010290), meat of bovine (HS 0201), rice (HS 1006), maize etc.

List 8 Cheese and curd, wine of fresh grapes and undenatured ethyl alcohol

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Trade flows of top 5 SA agricultural exports to EUTrade flows of top 5 SA agricultural exports to EUTrade flows of top 5 SA agricultural exports to EUTrade flows of top 5 SA agricultural exports to EU

ProductCode (HS8) Description

Export values 2006 (R’ million)

22042140 Unfortified wine - in containers of 2 litres or less 2,040.25

08061000 Fresh grapes 1,412.30

08051000 Fresh oranges 781.07

22042940Unfortified wine - other than in containers of 2 litres or less 617.14

08081000 Fresh apples 603.64

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MFN Rates vs Preferential RatesMFN Rates vs Preferential RatesMFN Rates vs Preferential RatesMFN Rates vs Preferential Rates

Product code Description MFN duties GSP duties TDCA rates

0805 Citrus fruits      

08051020 Fresh sweet oranges 3.20%   0%

080520

Clementines, Monreales and satsumas, Mandarins and wilkings, Tangerines, Other 16.00% 12.50% 3.50%

070110 Potatoes - seed 4.50% 0% 0%

07049010 White and red cabbages12.00 % MIN 0.40 EUR / 100 kg 8.50% 2.60%

07051100 Cabbage lettuce (head lettuce)12.00 % MIN 2.00 EUR / 100 kg/br 8.50% 2.60%

070320 Onions and shallots9.60 % + 120.00 EUR / 100 kg   0%

140420 Cotton linters 0%   0%

120720 Cotton seed 0%   0%

120600Sunflower seeds, whether or not broken 0%   0%

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Market Access RequirementsMarket Access RequirementsMarket Access RequirementsMarket Access Requirements

Prerequisites to access preferential treatment -

Comply with Rules of Origin as stipulated in a Protocol to TDCA to qualify for preferential rates:

• The EUR 1 form must accompany each consignment in order to qualify for TDCA preferences. EUR 1 is obtainable from the applicant’s local South African Revenue Services: Customs and Excise offices.

Comply with Sanitary and Phytosanitary measures and technical standards at the European Union – DoA Directorates: Veterinary Services and Plant Health

Procedures for the application, administration and allocation of export permits for quotas: details to be covered by Directorate Marketing

Full agreement is available online: www.sars.gov.za and follow the links: - Customs and Excise; Trade; Trade agreements

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Contact DetailsContact DetailsContact DetailsContact Details

Directorate: International Trade (Europe) of DoA

– Ms J Letswalo, 012 319 8007, JoyceLe@nda.agric.za

– Ms L Rantho, 012 319 8024, LillianR@nda.agric.za