[South Africa] Portfolio Committee on Trade and Industry approves the SACUM-UK economic partnership agreement
The Portfolio Committee on Trade and Industry has considered and approved the SACUM-UK Economic Partnership Agreement (EPA) and it will now go to the National Assembly for ratification.
SACUM-UK consist of the Southern African Customs Union (SACU) Member States, Mozambique and the United Kingdom (UK). The SACU Member States are Botswana, E swatini, Lesotho, Namibia and South Africa.
Current trade between UK and SA is governed by the SADC-EU Economic Partnership Agreement. Once completion of the withdrawal process from the EU (“Brexit”), the UK will not be part of the SADC-EU EPA. To avoid trade disruption, SACU, Mozambique and UK have decided to roll-over the EPA into a standalone trade agreement.
The SADC-EU EPA provides for the tariff arrangements applicable to trade between SACU, Mozambique and the 28 European Union (EU) member states. A number of products are duty free and there are detailed trade rules set out in the EPA to make trade easier between ourselves.
During his presentation to the committee, the Minister of Trade and Industry, Mr Ebrahim Patel said the proposed SACUM-UK EPA ensures continuity in our trade relations with the UK if, when and on whatever terms the UK exists the EU.
“The SACUM- UK EPA will replace the current legal framework for trade under the EU SADC EPA if the UK leaves the EU on 31 January 2020 or on a later date if the UK and EU agree to an extension or if the Withdrawal Agreement between the UK and EU comes into force. Key features of the SACUM-UK EPA include rules for trade in goods, preferential tariff rates on all sides, trade remedies, technical standards, health and safety standards, and dispute settlement,” said Patel.
According to Patel, the ministerial discussion on 19 March 2017 in Johannesburg agreed that the EU SADC EPA be rolled over into a standalone Agreement between the Southern African Customs Union, Mozambique and the UK. He added that broad terms of reference were agreed to ensure continuity after UK exits from the EU through new trade agreement that mirrors to extent possible the terms of the SADC EU EPA.
“The preferential market access contained in the SADC-EU EPA was transposed into SACUM-UK EPA. However, additional market access was agreed for South Africa in regards to 13 agricultural products, including wine and sugar, in the form of new volumes in relation to the Tariff Rate Quotas contained in the EPA with the European Union,” noted Patel.
Patel described South Africa and the UK trade relations as extensive which continue to grow. He stated that the total trade (excluding some gold exports from SA) between SA and the UK increased from R 56,3 billion in 2012 to R 101,2 billion in 2018 an increase of 79. 8%. Exports from SA to the UK increased from R 27.4 billion in 2012 to R 57.7 billion in 2018.
Importantly, Patel told the committee that the effects of the agreement would enable the South African businesses to continue to export their products to the UK market and protect SA jobs. Against this remarks, Patel urged parliament to ratify the agreement.
The United Kingdom is South Africa’s fourth largest market for exports, behind only China, Germany and the United States, and it is the seventh largest supplier of imported goods. It is estimated that the exports to the United Kingdom supports 56 500 direct jobs and a further 117 500 indirect jobs, bringing the total number of jobs supported by exports to the UK to nearly 175 000.