Free trade agreements

DTI utilizes strong government-to-government relations and mechanisms to advance a developmental agenda in Africa that focuses on identifying and establishing joint investment projects in partner countries; promoting two-way trade; coordinating South African technical co-operation and assistance to support policy and institutional development in partner countries; promoting Cross-border infrastructure development, notably on the basis of the SDI methodology; promoting regional integration through the strengthening and consolidation of the Southern African Customs Union (SACU) and the Southern African Development Community (SADC) free trade agreement; and negotiating agreements on investment protection and economic co-operation.

South Africa has signed many agreements with its trading partners in the past few years. The country is also a beneficiary of a number of non-reciprocal trade arrangements among them the African Growth and Opportunity Act and the Generalised System of Preferences.

Summary of Main Trade Agreements between South Africa and the rest of the World

Type of Agreement Countries Involved Main Objective/Terms Products Involved
Customs Union  
Southern African Customs Union (SACU) Customs Union South Africa, Botswana, Lesotho, Namibia and Swaziland Duty free movement of goods with a common external tariff on goods entering any of the countries from outside the SACU All products
Free Trade Agreements (FTAs)
Southern African Development Community (SADC) FTA Free Trade Agreement Between 12 SADC Member States A FTA, with 85% duty-free trade achieved in 2008. The 15% of trade, constituting the “sensitive list”, is expected to be liberalised from 2009 to 2012 when SADC attains the status of a fully-fledged FTA with almost all tariff lines traded duty free. Most products
Trade, Development and Cooperation Agreement (TDCA) Free Trade Agreement South Africa and the European Union (EU) The EU offered to liberalise 95% of its duties on South African originating products by 2010. In turn, by 2012, South Africa offered to liberalise 86% of its duties on EU originating products. There is currently a review of the agreement underway, which is aimed at broadening the scope of product coverage. This is taking place under the auspices of the Economic Partnership Agreement (EPA) negotiations between SADC and the EU
EFTA-SACU Free Trade Agreement (FTA) Free Trade Agreement SACU and the European Free Trade Association (EFTA) -Iceland, Liechtenstein, Norway and Switzerland Tariff reductions on selected goods Industrial goods (including fish and other marine products) and processed agricultural products. Basic agricultural products are covered by bilateral agreements with individual EFTA States
Economic Partnership Agreement between the SADC EPA States, of the one part, and the European Union and its Member States, of the other Part Economic Partnership Agreement South Africa, Botswana, Namibia, Swaziland, Lesotho and Mozambique (referred to as the SADC EPA Group) and the European Union (EU) SA’s core interest has been to harmonise trading regime between SACU and the EU; to secure further market access in agriculture (beyond the SA-EU Trade Development and Cooperation Agreement (TDCA) provisions) and claw back on some policy space lost under the TDCA. The agreement covers most products. It will replace the Trade Chapter of the TDCA. New market access accrued better than the TDCA will be implemented after entry into force of the SADC-EU EPA.
Preferential Trade Agreements (PTAs)
SACU-Southern Common Market (Mercosur) PTA Preferential Trade Agreement SACU and Argentina, Brazil, Paraguay and Uruguay Tariff reductions on selected goods. It is not expected to enter into force before some time in 2012 About 1,000 product lines on each side of the border
Zimbabwe/South Africa bilateral trade agreement Bilateral Preferential Trade Agreement South Africa and Zimbabwe Preferential rates of duty, rebates and quotas on certain goods traded between the two countries Selected goods. A most recent version of the agreement was signed in August 1996, which lowers tariffs and quotas on textile imports into South Africa.
Non-reciprocal Trade Arrangements
Generalised System of Preferences (GSP) Unilateral preferences granted under the enabling clause of the WTO that are not contractually binding upon the benefactors Offered to South Africa as developing country by the EU, Norway, Switzerland, Russia, Turkey, the US, Canada and Japan Products from developing countries qualify for preferential market access Specified industrial and agricultural products
Africa Growth and Opportunity Act (AGOA) Unilateral assistance measure Granted by the US to 39 Sub-Saharan African (SSA) countries Preferential access to the US market through lower tariffs or no tariffs on some products Duty free access to the US market under the combined AGOA/GSP programme stands at approximately 7,000 product tariff lines.
Other Agreements
Trade, Investment and Development Cooperation Agreement (TIDCA) Cooperative framework agreement SACU and US Makes provision for the parties to negotiate and sign agreements relating to sanitary and phyto-sanitary measures (SPS), customs cooperation and technical barriers to trade (TBT). It also establishes a forum of engagement of any matters of mutual interest, including capacity-building and trade and investment promotion. None
Trade and Investment Framework Agreement (TIFA) Bilateral agreement South Africa and US Provides a bilateral forum for the two countries to address issues of interest, including AGOA, TIDCA, trade and investment promotion, non-tariff barriers, SPS, infrastructure and others. None
Current Trade Negotiations
SACU-India PTA Preferential Trade Agreement SACU and India Tariff reductions on selected goods SACU and India are in the process of exchanging tariff requests
SADC-EAC-COMESA Tripartite FTA Free Trade Agreement 26 countries with a combined GDP of US$860 billion and a combined population of approximately 590 million people The Tripartite Framework derives its basis from the Lagos Plan of Action and the Abuja Treaty establishing the African Economic Community (AEC), which requires rationalisation of the continent’s regional economic communities. The FTA will be negotiated over the next three years, with the possibility of an additional two years for completion. The Tripartite initiative comprises three pillars that will be pursued concurrently, in order to ensure an equitable spread of the benefits of regional integration: market integration, infrastructure development and industrial development. The FTA will, as a first phase, cover only trade in goods; services and other trade-related areas will be covered in a second phase.