IMPROVED MARKET ACCESS
The SADC-EU EPA provides new and improved market access compared to the Trade, Development and Cooperation Agreement. Liberalisation now extends to 98.1% of all tariff lines.
New Duty Free
All fisheries, oranges during shoulder season, lemons during season, cut flowers, whole milk powder, fermented milk products, whey and other products consisting of natural milk constituents, sweetened pineapple juice, cultured yeast, dried baker’s yeast.
New Tariff Rate Quotas
Skimmed milk powder, butter, sugar, white crystalline powder, citrus jams, ethanol, active yeast.
Improved Tariff Rate Quotas
Wine, frozen orange juice, apple juice, canned fruit.
South African business did not take advantage of some of the tariff rate quotas under the Trade, Development and Cooperation Agreement due to sanitary and phytosanitary (SPS) issues. The EPA provides tools to enhance SPS coordination and cooperation.
The SADC-EU EPA is a building block for regional integration.
The agreement is designed to be compatible with the operation of SACU, especially in harmonising the import trade regime. It has a single external tariff schedule and the EPA calls for a centralised quota arrangement for imports from the EU.
Regional integration is further enhanced by common provisions on trade management (such as safeguards), common decision-making bodies, and more flexible rules on origin.
MORE FLEXIBLE RULES OF ORIGIN
EPA rules of origin allow for extended cumulation that can facilitate intra-regional trade and industrialisation
Cumulation allows materials and inputs from certain other countries to be considered as if they were already originating from South Africa when used in the manufacture of another product. These cumulation provisions allow manufacturers to source materials not readily available in the country, while still ensuring that the final product enjoys preferential access to the EU.
In addition to allowing cumulation between South Africa, the EU and other parties to the agreement, cumulation is also allowed under certain conditions with all ACP countries, as well as with materials from other countries that may enter the EU duty-free.
Examples of sectors that could benefit from the more flexible rules of origin include clothing and textiles, automobile sector and fisheries.
ELIMINATING EXPORT SUBSIDIES
In a pioneering move, the parties forego export subsidies for any agricultural product exported to each other. The EPA does away with all such subsidies between the EU and the SADC EPA states.
South Africa will be able to apply temporary export duties on a few products for industrial development needs.
MORE EFFECTIVE SAFEGUARDS
- Bilateral safeguard – permanent: when exports cause or threaten to harm domestic industry.
- Automatic agricultural safeguard – 12 years: when imports of a select number of agricultural products go beyond certain thresholds.