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Export opportunities for South African producers under the new market access conditions in the SADC-EU EPA


Export opportunities for South African producers under the new market access conditions in the SADC-EU EPA

Export opportunities for South African producers under the new market access conditions in the SADC-EU EPA

The new market access provisions of the SADC-EU EPA came into effect on 1 November 2016 after two conditions were met: ratification of the EPA by the SACU member states and the bilateral exchange of notifications on Geographical Indications (GIs) by South Africa and the EU in accordance with Protocol 3 of the EPA. The new market access commitments have improved market access for South African agricultural products, including fish, sweet oranges, flowers, skimmed milk powder, canned fruits, frozen orange juice, wine, sugar and ethanol. The EPA allows for 96.2 percent of South Arica’s exports to the EU to enter duty-free, while 2.5 percent of South Africa exports have been partially liberalised. Only 1.3 percent of products exported by South Africa to EU countries are excluded from tariff liberalisation. Most of the products excluded from tariff reduction commitments are agricultural products, foodstuffs and beverages. Products not subject to tariff liberalisation include bovine meats and offal, flours (maize and rice), bananas, all starches, sweetcorn, carnations, confectionery, beet and other cane sugar, cherry juice and prepared and preserved tomatoes. In addition, some aluminium products under HS 76 are also excluded from liberalisation.

Improved market access for South African products in the EU market is granted through tariff liberalisation on certain fish, sweet oranges and fresh flowers (roses, orchids, lilies and chrysanthemums); the expansion of quotas granted previously under the TDCA for canned mixed fruit, frozen orange juice and wine; and the introduction of new tariff rate quotas for raw and refined sugar, ethanol, active yeast, white crystalline powder, citrus jams, skimmed milk powder and butter.

Table 1: New market access granted to South African exports

New market access granted
Tariff liberalisation
Frozen Cape hake fillets (HS 03047411)
MFN applied tariff reduced by 17% annually until duty free by January 2021
Fresh or chilled Cape hake fillets (HS 03025411, HS 03025415, HS 03025419, HS 03025490)
MFN applied tariff reduced by 10% annually until duty free by January 2025
Fresh or chilled Monk fish (HS 03028950)
Frozen other hake (Argentine, southern and other) (HS 03036612, HS 03036613, HS 03036619, HS 03036690)
Fresh, chilled and frozen tilapia, catfish, Nile perch, carp and other fresh water fish (HS 03043100, HS 03043200, HS 03043300, HS 03043900, HS 03044910, HS 03046100, HS 03046200, HS 03046300, HS 03046900, HS 03047990, HS 03048910, HS 03048990)
Frozen flatfish and octopus (HS 03048390 and HS 03075910)
Prepared or prepares sardines (HS 16041319)
Prepared or preserved tuna or skipjack (HS 16041411, HS 16041416, HS 16041418)
Prepared or preserved anchovies (HS 16041600, HS 16042040, HS 16042050, HS 16042070)
Sweet oranges (HS 08051020)
1 June to 15 October each year duty free market access
16 October to 30 November each year the MFN duty will be applicable, but reduced by 9% annually until duty free
Fresh flowers (HS 060311, HS 060313, HS 060314, HS 060315, HS 060390)
Enter duty free and quota free
Tariff rate quotas
Skimmed milk powder (HS 040210)
500 metric tons enter duty free
Butter (HS 040510)
500 metric tons enter duty free
Raw and refined sugar (HS 17011310, HS 17011410, HS 17019910)
duty free access for 50 000 tons of refined sugar and 100 000 tons of raw sugar for refinery
White crystalline powder (HS 17023050)
500 metric tons enter duty free
Citrus jams (HS 20079130)
100 metric tons enter at 50% of the MFN applied tariff
Non-tropical canned fruit (HS 200840, HS 200850, HS 200870, HS 200897)
57156 tons enter at 45% of the MFN applied tariff which will be reduced by a further 4% annually until duty free
Frozen orange juice (HS 20091199)
1057 tons enter duty free, the in-quota quantity increases annually by 21 tons
Apple and pineapple juice (HS 20097100, HS 20097911, HS 20097919, HS 20097930, HS 20097991, HS 20097998)
3595 tons enters at 50% of the MFN applied tariff, the in-quota quantity increases annually by 117 tons for the first 10 years and thereafter by 70.5 tons
Active yeast (HS 21021090)
350 tons enter duty free
Tariff rate quotas
Bottled wine (27 HS 10 tariff lines between HS 2204219319 and HS 2204219881)
77741300 litres enter duty free
Bulk wine (75 HS 10 tariff lines between HS 2204219319 and HS 2204299881)
33317700 litres enter duty free; from 1 September each year, bulk wine can enter under the remaining quota for bottled wine for the remainder of the year
Ethanol (HS 22071000 and HS 22072000)
80000 tons enter duty free


South Africa is already one of the main supplying countries of wine (especially bulk wine), sweet oranges and Cape hake to the EU. However, there are numerous products granted preferential market access which are hardly being exported. These include ethanol, milk powder, butter, raw cane sugar, fresh flowers and almost all fish (excluding Cape hake). The market access which has been granted presents the opportunity for exports by South African producers; however, it seems that the uptake of quotas is slow and South African producers are yet to take full advantage of the increased market access. According to the Europa tariff quota database[1] the only quotas for 2017 which have been exhausted are for frozen orange juice and bulk wine. At 12 October 2017, the full quota was still available for most products, including milk powder, butter raw sugar for refinery, white crystalline powder, citrus jams, strawberries and tropical canned fruit. Close to 50 percent of both the quotas for canned non-tropical fruit and bottled wine have been utilised, while 23.5 percent, 22.6 percent, 10 percent and 6 percent respectively of the quotas for refined sugar, active yeast, ethanol and apple and pineapple juice have been utilised.

Implications of Brexit

There are two main concerns for South African exporters regarding Brexit; (1) maintaining the same tariff liberalisation commitments with the UK for fish, sweet oranges and flowers than those made under the SADC-EU EPA; and (2) the implication for Brexit for the tariff rate quotas. The UK is a major destination for South African sweet oranges, chrysanthemums and Cape hake. Maintaining the tariff liberalisation of the EPA with the UK after Brexit is vital to ensure South Africa retains its current share of the UK market. South African wines are mainly exported to the UK, while limited quantities of non-tropical canned fruit, citrus jams, apple juice and active yeast were exported to the UK in 2016.

Current indications are that the UK and the rest of the EU will apportion EU tariff quotas based on historical trade flows. This means that products imported into the UK in higher volumes than other parts of the EU will most likely continue to be traded in similar numbers. This does raise some concerns – if the data indicates no historical trade, how will the quota be apportioned? Furthermore, whilst allocating the major portion of a quota to the main destination market assists with the retention of current market share, it does little for new market development and facilitating entry into new potential markets at zero or low rates of duty.

[1] https://ec.europa.eu/taxation_customs/online-services/tariff-quotas_en

About the Author(s)

Willemien Viljoen

Willemien Viljoen holds a Master’s degree in Economics and a Bachelor of Laws degree (LLB) from the University of Stellenbosch. Her research interests are in regional integration and international trade policy, and specifically in issues pertaining to non-tariff barriers to trade, trade data analysis and modeling and trade and climate change.

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