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Impact assessments of changing agricultural trade agreements and tariff barriers between South Africa and European Union

Identifying areas for improvements in the economic partnership agreements (EPAs)

Authors: ; Faculty of Economics and Social Sciences, Szent István University; Management and Business Administration PhD School of Szent István University
Publisher: AgEcon Search, 2008

Full text of document

Southern African Customs Union (SACU) and the European Union (EU) are important trading partners in agricultural supplies. The Trade Development and Co-operation Agreement (TDCA) signed in 1999 paved the way for closer cooperation in trade of especially agricultural produce. The aim of this study is to measure the competitiveness of the South African agricultural sector by analysing the effects of the TDCA. The study analyses selected strategic export products to both the EU and SACU in order to find out if TDCA has lead to some advances in trade to both partners. The paper also aims to identify areas for improvements in the economic partnership agreements (EPAs) that are now on the negotiation table. The paper finds it evident that the most important South African agricultural export products to the EU are wine and citrus fruit. In relation to EU export to South Africa (SA), meat and dairy and products thereof were selected for the analysis.

Although the EU is now importing less of a product from the rest of the world than before, SACU’s export achievements in regard to the deciduous fruits have generally been positive. This indicates that market access has been improving for these strategic SACU exports. SACU particularly experienced gains in dynamic markets for citrus in most of the EU partner countries. SACU also experienced gains in dynamic markets in some EU states for fresh grapes.

The paper additionally highlights the importance of the EU Common Agricultural Policy (CAP) reform. The future of CAP has two important implications for SA:

  • CAP measures may imply a further shift from price to income support
  • the EU’s eastward enlargement, which involves the accession negotiations started with more applicant countries
From an economic perspective, the paper deems that an enlarged EU, as well as a proper shift in support, will stimulate trade and economic activity.

The paper finds that:
  • trade of the strategic products have grown significantly, improving the gains from trade to both partners
  • further export potential between the SACU-EU partners is to exist
  • further advances toward free trade between the trading partners are beneficial to both
  • specific areas that need consideration are the removal of more products from the respective reserve lists, improved access, levelling playing fields insofar as farmer subsidies are concerned
  • TDCA provisions should be aligned with World Trade Organisation (WTO) requirements
The paper concludes that liberalisation should take place efficiently and more quickly in order to secure long run food supplies among the partners.