Business Report, South Africa
EU-SA free trade agreement stalls
February 6, 2006
By Roy Cokayne
Pretoria - The free trade agreement reached between South Africa and the EU on automotive products in November last year has run into trouble and has not been implemented.
Iqbal Sharma, the acting deputy director-general at the trade and industry department, said the agreement on automotive products had not as yet been implemented.
"Negotiations to resolve outstanding issues relating to the conversion of the agreement into legal text are still under way.
"An announcement containing all the details would be made as soon as consensus has been reached," he said.
Sharma said South Africa and the EU had reached an agreement on November 5 to include most of the automotive products under the free trade area agreement, which has been in place since January 1 2000.
He added that South Africa had, from January 1 this year, graduated out of the EU’s generalised system of preferences applicable to section 17 of the tariff nomenclature, covering vehicles, aircraft, vessels and associated transport equipment.
Nico Vermeulen, the executive director of the National Association of Automobile Manufacturers of SA, said South Africa and the EU had a different interpretation on certain of the technical provisions and the agreement would not be implemented until this was sorted out.
Vermeulen said the impact of this was that duties, which should have come down, had increased. However, "this should be a temporary impasse". A meeting was scheduled in Europe on February 10 to try to address the differences, he said.
"If they are sorted out, it is possible the agreement will be implemented retrospectively from February 1 this year."