10 September 2010

Trade Negotiations

Bi-lateral Trade

The following are SACU’s Bi-Lateral Trade initiatives

SACU-EFTA FTA NEGOTIATIONS

The final Round of the SACU-EFTA Free Trade Agreement negotiations took place in Pretoria, South Africa from 24-26 August 2005, where the technical negotiations of the SACU EFTA FTA on several trade agreements with the European Free Trade Association (EFTA) were concluded. These include Free Trade Agreement between the two sides, as well as three separate bilateral agricultural agreements between SACU and Norway, Iceland and Switzerland/Liechtenstein respectively. These four agreements form the instruments creating an FTA between SACU and EFTA.

EFTA has offered SACU full duty and quota free access for industrial products with rules of origin equivalent of better than those contained in the TDCA. EFTA has provided SACU with limited but enhanced access to their agricultural markets. SACU offered EFTA what it has already offered the EU in terms of the South Africa-EU TDCA on both agriculture and industrial products with some adjustments (taking into account BLNS sensitivities and errors made in the TDCA). SACU has excluded any preferential offer on products that benefit from export subsidies and trade distorting support. There are no obligations on new generation issues that EFTA initially requested (services, investment, competition, IP, government procurement).

A legal and technical review of the text was concluded during end 2004/05 and preparations were initiated to secure authority for SACU Ministers to sign the agreement during 2005. Following the completion of the required internal legal processes, the agreements were signed by Ministers from all SACU and EFTA Member States during July 2006. On the EFTA side all parties have ratified the agreements and deposited their instruments of ratification with the depository. SACU Member States are in the process of ratifying the agreements. It is expected that this will be completed soon.

For full details of this agreement click SACU – EFTA FTA (PDF)

SACU-MERCOSUR PTA NEGOTIATIONS

SACU concluded and signed a Preferential Trade Agreement with MERCOSUR, which was signed by SACU and MERCOSUR Ministers at a ceremony in December 2004. The agreement included an in-built agenda to continue negotiations on a number of issues, including rules of origin, SPS and specific requests for additional trade preferences for specific products on both sides.

The PTA contains a Main Text, and five Annexes. The Main Text sets out the principles, legal provisions and procedures for the arrangement. It also establishes an institutional arrangement to manage the new trade arrangement. Annexes 1 and 2 set out MERCOSUR and SACU respective tariff concessions covering around 1000 products each way with preference margins spread over 100-10%. The other Annexes cover General Rules of Origin, Safeguards, and Dispute Settlement.

The PTA is significant in that it is the first trade agreement concluded by SACU as a single entity. It is also important that this first agreement is with another developing region, giving meaning to the objectives of South-South cooperation and integration. The PTA creates a basis for further integration and cooperation including through possible further exchanges of tariff preferences, and cooperation on any other area. It establishes a legal framework to govern SACU and MERCOSUR trade relations.

The Understanding reached between SACU and MERCOSUR outlines a built-in agenda for further work that could take the form of amendments or additional protocols to the PTA. These include: further exchange of tariff preferences, rules of origin (RoO), customs cooperation, Non Tariff Measures (i.e. SPS), and the automotive sector.

The final round on Negotiations between SACU (comprising of Botswana, Lesotho, Namibia, South Africa and Swaziland); and MERCOSUR (comprising of Argentina, Brazil, Paraguay, and Uruguay,)were held on the 17 – 18 April 2008 in Buenos Aires, Argentina, were all outstanding technical issues were resolved.

The agreement concluded on the 17 – 18 April 2008 will replace the agreement signed in December 2004 in Belo Horizonte, Brazil, as substantial changes were made to the earlier agreement.

SACU-USA TRADE, INVESTMENT AND DEVELOPMENT COOPERATION AGREEMENT (TIDCA).

In 2001 SACU and the United States of America (USA) started a process aimed at concluding a Free Trade Agreement between the two sides. However, due to diverging views on a number of issues, in 2004 it was agreed to suspend this process and explore an alternative approach to improve trade relations between the two sides. During February 2007, both sides agreed to enter into a Trade, Investment and Cooperation Agreement (TIDCA). This agreement will provide the framework for formal interaction between the two parties, while also providing a basis to enter into separate agreements on technical issues. Issues that have so far been jointly identified were sanitary and phyto-sanitary measures (SPS), technical barriers to trade (TBT), customs cooperation, as well as trade promotion involving the private sector. It is expected that a text will be agreed upon and signed before the end of 2008.

SACU SIGNS TRADE, INVESTMENT AND DEVELOPMENT COOPERATION AGREEMENT WITH THE UNITED STATES OF AMERICA (USA).

On 16 April 2008, the Southern African Customs Union (SACU) composed of Botswana, Lesotho, Namibia, Swaziland and South Africa, met with the United States Trade Representative in Washington, D.C. to sign a Trade, Investment and Development Cooperation Agreement (TIDCA). Ambassador Susan Schwab, United States Trade Representative, signed on behalf of the Government of the United States of America, while the five SACU Ministers responsible for Trade – Honourable DN Moroka, Minister of Trade and Industry of Botswana, Honourable P Lebesa, Minister of Trade and Industry of Lesotho, Honourable H Geingob, Minister of Trade and Industry of Namibia, Honourable M Mpahlwa, Minister of Trade and Industry of South Africa and Honourable MM Dlamini, Minister of Foreign Affairs and Trade of Swaziland – signed on the behalf of SACU Member States.

The agreement is a cooperation agreement aimed at promoting investment and expanding and diversifying trade between SACU and the USA. It establishes a Consultative Group on Trade and Investment.

For full details of this agreement click SACU – USA TIDCA (PDF)

Other ongoing Trade Negotiation initiatives include:

• SACU – India Preferential Trade Agreement (PTA) Negotiations.