South Africa and European Union FTA Presented by: Lillian Rantho Directorate: International Trade

2 ContentContent Background Overview of the Agreements Specific benefits and opportunities MFN Rates vs Preferential Rates Market Access Requirements Contact Details

3 BackgroundBackground  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

4 Overview 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

5 Specific benefits and opportunities - liberalization schedule of EU (Annex IV) List 0Immediate elimination of duties upon implementation (1 January 2000) List 1Elimination over 3 years in 4 equal steps, reaching zero duty on 1 January 2003 List 2Elimination 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 6Tariff quotas offering fixed preferences for certain volumes List 7 Reserve list (products considered sensitive) - Excluded from liberalization subject to periodic reviews. List 8Omission list- Protected EU denominations (products related to Geographical Indications and designation of origin of agricultural products)

6 Specific benefits and opportunities cont’d ListsSome of the agricultural products covered in specific lists: List 1Onions (HS 0703), Margarine (HS 1517) etc. List 2Sunflower seed (Hs 1512), Fresh or chilled potatoes (Hs 0701) etc. List 3Cabbages (Hs 0704), Onions (Hs 0703), Lettuce (Hs 0705) etc. List 4Grapes, 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 ), meat of bovine (HS 0201), rice (HS 1006), maize etc. List 8Cheese and curd, wine of fresh grapes and undenatured ethyl alcohol

7 Trade flows of top 5 SA agricultural exports to EU Product Code (HS8)Description Export values 2006 (R’ million) Unfortified wine - in containers of 2 litres or less2, Fresh grapes1, Fresh oranges Unfortified wine - other than in containers of 2 litres or less Fresh apples603.64

8 MFN Rates vs Preferential Rates Product codeDescriptionMFN duties GSP duties TDCA rates 0805Citrus fruits Fresh sweet oranges3.20% 0% Clementines, Monreales and satsumas, Mandarins and wilkings, Tangerines, Other16.00%12.50%3.50% Potatoes - seed4.50%0% White and red cabbages % MIN 0.40 EUR / 100 kg8.50%2.60% Cabbage lettuce (head lettuce) % MIN 2.00 EUR / 100 kg/br8.50%2.60% Onions and shallots 9.60 % EUR / 100 kg 0% Cotton linters0% Cotton seed0% Sunflower seeds, whether or not broken0%

9 Market 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: and follow the links: - Customs and Excise; Trade; Trade agreements

10 Contact Details  Directorate: International Trade (Europe) of DoA –Ms J Letswalo, , –Ms L Rantho, ,