1. Portfolio Committee on Trade and Industry: Trade Seminar
SA International Trade Agreements
Mmatlou Kalaba
26 August 2009

2. Introduction
The SA economy has undergone a process of trade reforms in the past two decades
Some of the objectives include: input cost reduction, competitiveness and attract investment.
The trade reforms involved both multilateral (WTO) and bilateral agreements.
SA has completed trade negotiations with the EU, SADC, EFTA and MERCUSOR
In total there are three FTAs, PTA & CU
Negotiations with India and China have been mentioned, but yet to be launched officially

3. Brief Outline Main features of Trade Agreements
Trade Performance since inception of Trade Agreements
SA Trade with FTA members and major developing countries
Concluding remarks

4. Main Features: EU-SA TDCA
Entered into force in 2000
Main aspects are on tariff provisions, but the TDCA has articles on services, investment, cooperation and development.
Article 29 on services commits parties to strict observance of GATS
Tariffs: EU will reduce 95% of SA trade to zero by 2010 and SA will reduce 85% of EU trade by 2012

5. Main Features: SADC Trade Protocol
Came into effect in 2000
The agreement focused mainly on trade in goods, but also committed to services sector liberalisation
SADC is currently a Free Trade Area (FTA) and 85% of trade is free of customs duty, with exception of few member states

6. Main Features: EFTA
EFTA consists of Switzerland, Norway, Iceland and Lichtenstein.
Agreement was with SACU, and not with SA alone
The agreement excludes Agric goods.
EFTA dropped all other duties to Zero upon entry into force of the agreement and SACU will gradually reducing tariffs over nine years.
The Agreement entered into force in 2008

7. Main Features: MERCOSUR
MERCOSUR consists of Brazil, Argentina, Paraguay and Uruguay with Chile and Bolivia as associates.
Agreement was also with SACU, and is in the form of Preferential Trade (PTA)
It was finalised in 2004 and covers about 1000 goods.
It is seen as a basis for further integration and cooperation

8. Other Trade Arrangements
SACU had trade talks with the US which eventually were called off due to major differences.
EPA negotiations did not have desired outcomes
Talks about trade negotiations with China and India have been making rounds
These are two major players in global economy, have economic growth rates and account for about 40% of global population.
Therefore it may be beneficial to have trade arrangements

9. Tariff reduction Trade agreements have led to tariff reduction
Average tariffs declined from over 15% in 1996 to 7% in 2007
Tariffs were also simplified, from more lines to less than 6500 over the same period
With SADC, 99% of tariff lines are free of customs duties, and 60% of EU
Reciprocal access to SADC and EU markets is 85% and 90%, respectively

10. Trade Performance: Imports
EU supplied about 40% of SA imports & China 4%
EU loses 20% & US ¼ the share
China’s % grows 3 times

11. Trade Performance: Exports
EU &US account for 50% of SA exports
EU & US are still major markets
Exports to China’s double
No significant changes

12. Some Concluding remarks
SA Trade Agreements focused mainly on market access
Agreements with SADC and the EU have been implemented for more than 8 years, while others were concluded recently.
Only imports from SADC show expected response.
There is diversification of supply sources, while export destinations have remained almost the same.
Trade policy must be linked with other policies to affect the structure of exported goods
Lessons from failed negotiations should encourage more robust and ambitious goals in future.
Trade with developing partners improved without trade agreements