Tax News | 7 October 2016
SADC-EU trade treaty comes into effect
The South African Department of Trade and Industry (DTI) has announced that the Southern African Development Community (SADC)-European Union (EU) Economic Partnership Agreement (EPA) would provisionally enter into force on October 10, 2016.
The DTI stated that all Southern African Customs Union member countries – Botswana, Lesotho, Namibia, South Africa, and Swaziland – have deposited their instruments of ratification of the EPA and the EU has notified provisional application of the agreement. The EPA will provisionally enter into force between the EU and Mozambique (the remaining SADC member country) once the latter has finalized its ratification process.
However, the new agriculture market access within the EPA requires a further exchange of letters between the EU and South Africa to confirm the protection of each other’s geographical indication names. It is expected that the agricultural market access will enter into force on November 1, 2016.
Under the EPA, Namibia, Mozambique, Botswana, Swaziland, and Lesotho will be granted immediate duty- and quota-free access for their exports to the EU market. South Africa will benefit from improved market access when compared to the trade chapter in the previous South Africa-EU Trade, Development and Cooperation Agreement, with tariffs being fully or partially removed on 98.7 percent of EU imports from South Africa.
With the exception of Mozambique, SADC members will liberalize 86 percent of their imports from the EU over a 10-year period. Mozambique will liberalize 74 percent of its imports from the EU. In addition, the EU has agreed not to subsidize its agricultural exports to the countries.