1. SACU-EFTA AGREEMENT Xolani Nqaba Directorate: International Trade

2. 2 ContentContent Background Overview of the Agreement Specific benefits and opportunities MFN Rates vs Preferential Rates Market Access Requirements/Procedures Contact Details

3. 3 BackgroundBackground  Association (EFTA): intergovernmental organisations set up for the promotion of free trade and economic integration.  The old EFTA grouping of 1960 has undergone several changes and the new EFTA of 1995 as we know it today has a membership of Iceland, Norway, Liechtenstein and Switzerland.  EFTA is an important trading partner of SACU.  Although EFTA countries are small, they are world leaders in several sectors vital to the global economy. They rank among the countries with the highest GDP per capita in the world. They are developed countries and are major net-importers of agricultural products.  In addition to intra-EFTA free trade, EFTA has negotiated free trade agreements with third countries including with SACU.

4. 4 Overview of the Agreement  Free trade negotiations between EFTA and SACU were launched in 2003. The Free Trade Agreement (FTA) was signed in June 2006 and entered into force on 1 May 2008.  The agreement will be phased-in over a period of nine years.  The Main Agreement consists of seven Chapters with a total of 44 Articles and 8 Annexes. Chapters are as follows: ♦ General Provisions ♦ Trade in Goods ♦ Intellectual Property ♦ Services, Investment, Public Procurement ♦ Economic co-operation and technical assistance ♦ Institutional and Procedural Provisions ♦ Final Provisions

5. 5 Overview of the Agreement Cont… Trade in Goods  Coverage on trade in goods: - Industrial products, Fish and other marine products, Processed agricultural products, and Basic agricultural products.  Processed agricultural products are included in the main agreement (as Annex III) which also covers trade in industrial products including fish and other marine products.  Trade in basic/primary agricultural products is covered in separate bilateral agreements between individual EFTA countries and SACU.  Lists of products for which the partner countries grant concessions to one another are found in the annexes of the agreements.

6. 6 Specific benefits and opportunities  In terms of the main agreement SACU will enjoy immediate duty-free access into EFTA markets for all products covered by this agreement, with the exception of processed agricultural products. SACU shall progressively reduce its customs duties on imports from EFTA (Annexes IV and VII).  In terms of the bilateral agricultural agreement with Switzerland, SACU exporters will have a better market access for canned oranges, mandarins and apricots. They will also face duty free access for canned peaches, grapefruit and lemons. Cider apples and apples for distilling will be duty free within the limits of Switzerland’s World Trade Organisation (WTO) market access quota. There are other products that will benefit as well.  SACU exporters will face duty free access to Norway for canned fruit: - Pineapples (HS code 2009.20), Pears (HS 2008.40), Apricots (HS 2008.50), Peaches (HS 2008.50) and Mixtures entirely containing fruits of heading 0803 – 0810. There are other products included in this agreement that will also benefit.

7. 7 Specific benefits and opportunities Cont…  In terms of the SACU-Iceland bilateral agreement, SACU secured duty free access for all canned fruit, fruit juices, wine, grapes, citrus and apples.  Parties undertook to achieve further liberalisation through a review clause in all the three bilateral agreements with SACU with the first review taking place no later than three years after the implementation of the agreements.  Further reviews are to be determined at the first review.

8. 8 Bilateral trade flows between SA and EFTA States Switzerland Product codeDescriptionSouth Africa’s Exports to Switzerland 2006 (R’000)2007 (R’000) 20 Vegetable, fruit, nut, etc food preps 66 807.9584 917.49 22 Beverages, spirits and vinegar 57 549.3747 654.90 08 Edible fruit, nuts, peel of citrus fruit, melons 76 656.5159 671.94 02Meat and edible meat offal 68 665.0357 866.68 07Edible vegetables and certain roots and tubers 10 901.139 616.35

9. 9 Bilateral trade flows between SA and EFTA States Norway Product codeDescriptionSouth Africa’s exports to Norway 2006 (R’000)2007 (R’000) 08 Edible fruit, nuts, peel of citrus fruit, melons 25 140.9745 855.02 22 Beverages, spirits and vinegar 22 512.9029 179.19 20 Vegetable, fruit, nut, etc food preps 1 756.523 722.91 06 Live trees, plants, bulbs, roots, cut flowers etc 1 857.082 992.38 12Oil seed, oleagic fruits, grain, seed, fruit, etc, nes 1 045.862 563.89

10. 10 Bilateral trade flows between SA and EFTA States Iceland Product codeDescriptionSouth Africa’s exports to Iceland 2006 (R’000)2007 (R’000) 22 Beverages, spirits and vinegar 6 100.884 713.35 20 Vegetable, fruit, nut, etc food preps 4 196.874 291.88 08 Edible fruit, nuts, peel of citrus fruit, melons 181.022 275.89 09Coffee, tea, mate and spices 140.79154.54

11. 11 MFN rates vs Preferential rates Switzerland Product codeDescription MFN rates SACU rates 07020010Tomatoes, fresh or chilled1.24%Free 07041010 Cabbages, cauliflowers, kohlrabi, kale and similar edible brassicas, fresh or chilled 6.68%Free 08051000Citrus fruit, fresh or dried ; Oranges6.68%Free 12060031Sunflower seeds, whether or not broken: For human consumption 0.13%Free

12. 12 MFN rates vs Preferential rates Cont… Norway Product codeDescriptionMFN rates SACU rates 07011000Potatoes, fresh or chilled; Seed53.92%45.70% 07031012 Onions, shallots, garlic, leeks and other alliaceous veges, fresh or chilled: Onions 16.14%13.77% 08051010 Citrus fruit, fresh or dried: Oranges; For feed purpose 42.94%38.50% 12060010Sunflower seeds, whether or not broken: For feed purpose 87.54%78.56%

13. 13 MFN rates vs Preferential rates Cont… Iceland Product code DescriptionMFN rates SACU rates 070320 Onions, shallots, garlic, leeks and other alliaceous veges, fresh or chilled: Garlic 30.00%Free 08 Edible fruit and nuts; peel of citrus fruit or melons 0.00%Free 110812 Products of the milling industry; malt; starches; inulin; wheat gluten: Maize 0.00%Free 1701Sugars and sugar confectionery: Cane or beet sugar and chemically pure sucrose, in solid form 0.00%Free

14. 14 Market Access Requirements/Procedures Compliance with:  Rules of Origin (RoO)  Sanitary and Phytosanitary (SPS) measures, etc The administration of export permits for quotas is handled by Directorate Marketing.

15. 15 Contact details 1. For SACU-EFTA FTA visit: www.sars.gov.zawww.sars.gov.za and follow the links: - Customs and Excise; Trade; Trade agreements 2. Joyce Letswalo or Xolani Nqaba Directorate: International Trade (012) 319 8007 or 319 8020 Thank you