SA-EU to focus on imbalance

Jul 16 2013 18:21

Pretoria - South Africa will push for greater flexibility on agricultural exports to Europe in the upcoming SA-EU summit, Trade and Industry Minister Rob Davies said on Tuesday.

"There are still some outstanding matters of give and take," Davies told reporters in Pretoria.

He was speaking ahead of the 6th South Africa-European Union summit in Pretoria on Thursday.

The South African delegation will be led by Pres. Jacob Zuma, who will meet European Council president Herman van Rompuy and EU Commission head Jose Manuel Barroso.

Davies said he was confident the talks would prove fruitful, but said there were some delicate trade subjects up for discussion.

Outlining the trade relationship between South Africa and the EU bloc, he said the levels of trade with Europe were nowhere near what they were in 2008, before the onset of the global economic crisis.

Total trade with the EU was R419bn in 2008.

"The total trade with EU countries last year was R383bn... so it's still way off the figure we achieved in 2008."

Of particular concern was the trade deficit, which more than doubled since 2008. In that year South Africa exported goods worth R186bn. This fell to R122bn the following year.

By last year, exports still had not recovered to the 2008 levels.

"What this meant was that the trade balance has grown from minus R47bn in 2008 to minus R95bn in 2012," Davies said.

This was mainly due to constrained growth in several European countries. A surge in imports from Europe exacerbated the problem.

Imports from Europe recovered well from the R233bn level in 2008 to R239bn last year, largely due to an increase in the amount of agricultural and agro-processing imports.

"SA has already got a bilateral free trade agreement with the EU... the EU granted us much more access in terms of a tariff regime in manufactured products than they did in agricultural products," Davies said.

"What it means is that we currently have duty free access to the European market for about 65% of our agricultural products... in return for that we actually receive more than 90% duty free entry into the South African market [from the EU]."

The South African government would once again try to negotiate around the EU's "upgraded surveillance" on citrus products.

The EU said it would block citrus imports if it detected Citrus Black Spot (CBS). CBS affects the fruit's peel, but not the actual fruit.

"This could affect quite a large number of jobs in the citrus industry in South Africa. We asked for greater flexibility."

Davies said the EU had shown little willingness to respond to this request.

The South African citrus industry employs 40 000 permanent and another 40 000 seasonal workers.

He said there had been a decline in the level of affected fruit intercepted by the EU.

"We think there's a low risk this could be transmitted into orchards in Europe, but like I've said they've increased their surveillance."

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european union  |  exports  |  economy



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