Breakthrough in trade deal with EU

Johannesburg - South African chicken and beer producers will enjoy protection from European imports for longer.

This is because the European Union (EU) has decided to bring South Africa's existing trade agreement with the EU into line with a new economic partnership agreement (EPA).

The decision is regarded as an important step for South Africa and Namibia in signing the controversial EPAs that the EU is attempting to enter into with all former European colonies in African, Pacific Ocean and Caribbean Sea (ACP) countries.

Last year the EU concluded an interim EPA with Botswana, Lesotho and Swaziland (BLS countries). But this deals with different tariffs on 53 products – including beer and chicken – being exported from Europe to the Southern Africa Customs Union (Sacu) which, apart from the BLS countries, includes South Africa and Namibia.

But the distinguishing feature of a customs union is a uniform external tariff, which means that the same import tariffs must be applied to all imports from the EU, and that all products can then circulate free of charge within the union itself.

Because of the differences in tariffs on the 53 products, South Africa had threatened to impose strict border control on all trade within Sacu, which could negatively affect the region's economies.

This was one of the major reasons for South Africa and Namibia so far refusing to support the EPA. The EU has now officially agreed to bring the tariffs of its agreement with South Africa – known as the TDCA (Trade, Development and Cooperation Agreement) – into line with those of the interim EPA. This means South African manufacturers of a wide range of products – such as beer, chicken, eggs, toilet paper, candles, various paper products, umbrellas, some clothing products, mushrooms, honey, jam, chocolate and pasta – will now continue to enjoy higher tariff protection from European imports for some time.

This step by the EU will probably mean that South Africa will now have to enter into compromises regarding some of the other issues, says a trade expert.

Supporting the agreement is definitely a step in the right direction for South Africa, he declares.