Discussions
Export permits on specific agricultural exports from South Africa to the European Union
Willemien Viljoen, tralac Researcher, discusses tariff-rate quotas (TRQs) and export permits under the TDCA between South Africa and the European Union
In the Government Gazette of 21 January 2014 the South African Department of Agriculture, Forestry and Fisheries (DAFF) published the latest information regarding the procedures, administration and allocation of export permits for specific agricultural exports under the Trade, Development and Co-operation Agreement (TDCA) between the European Union and South Africa. The TDCA came into force on 1 January 2000 and establishes a Free Trade Area between the EU and South Africa. In accordance with Article 14 and Annex IV of the TDCA the EU grants tariff preferences on limited quantities of selected agricultural products, exported from South Africa, in the form of tariff-rate quotas (TRQs). The products the TRQs apply to currently include cut flowers (including fresh roses, chrysanthemums, and lilies under HS 0603), fruits and nuts (including strawberries, pears, apricots, peaches and fruit mixtures under HS 0811 and HS 2008), fruit juice (including orange, pineapple and apple juice under HS 2009) and wines under HS 2204. TRQs are a two-tiered tariff system with a limited volume of imports (quota) imported at a lower tariff rate (in-quota tariff), while all additional imports are subject to a higher import tariff (out-quota tariff). This means that import quantities under a TRQ system are not limited, but that the over-quota import quantities are imported at a higher rate of import duty.
The agricultural TRQs under the TDCA are reviewed on an annual basis and administered through a system of export permits granted on the basis of applications lodged by interested South African exporters on the basis of the procedures and conditions set out in the Government Gazette Notice. Export permits for fruits and nuts, fruit juice and wines are granted on an annual basis with a validity of twelve months, while permits granted for the exportation of cut flowers are processed on a first-come-first serve basis until the allocated quota has been filled. This means that South African exports of cut flowers will be allowed to enter the EU market at the lower in-quota tariff rate until the tariff quota is filled; at which time the higher tariff will apply automatically.
A comparison of the quotas granted for 2013 to South African agricultural exporters with those of the new quotas granted for exports in 2014 shows that there has been an overall increase in the quantities of the specific product lines that can be exported to the EU at the reduced in-quota tariff rate:
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The quota for fresh flowers has been increased by 48 tons for 2014.
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Between 2013 and 2014 the quota for South African exports of fruits and nuts was increased by 2.16 percent with an increase of 1236.75 tons for exports of pears, apricots and peaches; 630.2 tons for exports of mixtures of fruits and 7.5 tons for exports of strawberries.
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For 2014 the quota for South African exports of orange juice was increased by 21 tons, while the quota for exports of pineapple and apple juice was increased by 150 tons.
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For 2014 the quota for wine exports from South Africa to the EU under EU tariff code 2204.21.93 to 2204.21.98 was increased by 3 percent, from approximately 46.9 million litres in 2013 to approximately 48.4 million litres in 2014.
The current trading relationship between the EU and South Africa in the specific agricultural tariff lines is characterised by the following:
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Between November 2012 and November 2013 South Africa’s total exports of the specified agricultural products declined by 1.83 percent on a monthly basis from US$ 43.21 million in November 2012 to US$ 34.64 million in November 2013.
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Between January and November 2013 South African exports of the applicable agricultural products increased by 2.57 percent on a monthly basis.
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Between November 2012 and November 2013 South African exports of fresh cut flowers and fruits and nuts to the EU declined by 83 percent and 8 percent, respectively, while exports of fruit juice and wine increased by 146 percent and 2 percent, respectively over the same time period. However, over the 11 months evaluated in 2013, from January until November, South African exports of cut flowers, fruit juice and wine increased on a monthly basis by 9.09 percent, 16.88 percent and 2.24 percent, respectively, while exports of fruits and nuts (mostly pears and fruit mixtures) declined on a monthly basis by 2.37 percent over the same time period.
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Between January and November 2013 the South African export products that have shown the highest growth rates include orange juice (20.27%), apple juice (15.12%) and other fresh cut flowers (12.11%). The products that have shown a significant decrease in exports for the time period are pears (3.79%), mixtures of fruit (3.11%) and apricots (2.98%).
Sources:
Government Gazette of 14 September 2012 Notice No. 35682 (http://www.greengazette.co.za/documents/national-gazette-35682-of-14-september-2012-vol-567_20120914-GGN-35682.pdf)
Government Gazette of 21 January 2014 Notice No. 37242 (http://www.greengazette.co.za/documents/national-gazette-37242-of-21-january-2014-vol-583_20140121-GGN-37242.pdf)
TradeMap (www.trademap.org)