Prospects and opportunities for agriculture under the Economic Partnership Agreement Stellenbosch, 16.10.2012 Dóra MECSEKY Southern Africa desk officer DG Agriculture and Rural Development European Commission Agriculture and Rural Development
Presentation outline 1. EU - South Africa trade under the TDCA 2. EU - SADC agricultural trade 3. Prospects and opportunities for the SADC-EPA 2
1. EU - South Africa trade under the TDCA EU SA Trade, Development and Cooperation Agreement (TDCA) Signed in 1999, in force since 2000 and fully implemented this year Early FTA - underpins strategic partnership between the EU and SA Overall trade liberalisation and expansion of investments (2010) EU is SA's main trading partner Trade has increased by more than 120% since 2000 Total Foreign Direct Investment is five times higher than in 2000 Agricultural trade opening Small part of overall picture, but key for rural sector, consumers and jobs Agricultural trade: 10% of total SA exports to the EU and 5% of total imports SA agricultural exports to the EU increased by 145% since 2000 3
EU-South Africa agricultural trade Source: EUROSTAT - COMEXT 1.500 EU27 Agricultural trade with South Africa 1999-2010 Export 1.000 500 0 million Euros 500 1.000 1.500 2.000 2.500 Import 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Commodities Intemediate Final products Other products Confidential Balance 4
Balance of the TDCA EUROPEAN UNION (CN 1996) SOUTH AFRICA (HS 1996) TDCA Tariff lines % Tariff lines % Tariff lines % Tariff lines % Tariff lines % Tariff lines % Agricultural goods Industrial goods Total Agricultural goods Industrial goods Total Total number of lines 2266 100% 7759 100% 10025 100% 996 100% 6828 100% 7824 100% Fully or partially liberalised under the TDCA by 2012 1847 81.5% 7753 99.9% 9600 95.7% 895 90% 4776 70% 5671 72.5% Average applied MFN duty 8.7% 9.3% Overall average applied tariff 1.4% 0.4% 0.6% 3.1% 3.5% 3.4% Average applied tariff on 12% 9.5% 10.5% 38.3% 11.7% 12.6% dutiable TLs Source: WTO and EU-SA schedule submitted to WTO 5
Present and future EU SA trade relations Current state of play Balanced trade liberalisation under TDCA Asymmetrical implementation: EU liberalised its markets at a faster pace and with an overall broader coverage Applied EU tariff rates are generally lower than SA rates SA protection provided by dutiable tariff lines is generally higher than protection from EU duties Agricultural trade is in favour of South Africa Further market access to the EU is a real prospect A deeper and more comprehensive trade agreement could drive job creation Promote agricultural value through the export of labour intensive, value added goods 6
2. EU - SADC agricultural trade EU is the most open market in the world for developing country exports: 75000 World imports from developing countries (mio EUR) 71% 75% 60000 60% 50% 45000 40% 45% 30000 34% 34% 28% 30% 22% 15000 15% 0 EU-27 Next 5 US Japan Canada Australia New Zealand 0% Average 2008-2010 % share from DCs (right axis) 7
EU agricultural imports from ACP (EUR million; average 2008-10) EAC; 165; 3% Pacific; 16; 0% ESA; 448; 9% Cariforum; 458; 9% West Africa; 2.140; 44% Central Africa; 773; 15% SADC-EPA; 988; 20% 8
Source: UN - COMTRADE SADC-EPA: Agricultural Exports
3. Prospects and opportunities for the SADC-EPA Opportunities EU market is key for SADC jobs and agricultural exports An EPA with the region could increase trade flows within the region and with the EU improve market access for Southern African businesses lower the costs of inputs create a more predictable environment for trade and investment to sustain growth and jobs strengthen market integration and regional coherence encourage value adding activities, knowledge transfer and the production of good quality, globally competitive products be a cornerstone of the region-to-region partnership 10
Prospects and opportunities for the SADC-EPA Full access to EU markets for ACP states (except SA) not offered to any other non-ldc in the world (some SADC states have higher GDP per capita than some EU Member States). Interest for the region both in Exports: to the lucrative EU market, even in current difficulties, and Imports: to secure competitive imports in sectors in deficit to meet consumer demand, lower input costs for value adding activities. Asymmetric access to ACP markets: sensitivities to be taken into account to avoid unfair competition Harmonised Rules of Origin for the region: more benefit from EU preferences through cumulation of origin within EPAs The objective is an ambitious agreement with mutual benefits for all parties 11
Conclusion Crucial to strengthen the partnership with the region that is the EU s most important economic partner in Africa and pivotal for the continent's future prosperity Key moment in negotiations with real optimism in current work With more flexibility and understanding from all sides, an ambitious agreement is within reach 12
Thank you for your attention Dora MECSEKY Southern Africa Desk Officer DG Agriculture and Rural Development European Commission dora.mecseky@ec.europa.eu Further information International Aspects of Agriculture meeting and document http://ec.europa.eu/agriculture/events/advisory-group-international-2012_en.htm 13
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African ACP states: agricultural exports (COMTRADE data) 9 000 8 000 EU27 EUR million 7 000 6 000 5 000 4 000 Intra- African Rest of World 3 000 2 000 1 000 Other upper income BRIC 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 16