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South Africa: to protect agricultural sector from EU imports

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Thursday, 11 April 2013

South Africa: to protect agricultural sector from EU imports

South African companies that consider that have been harmed by the competition with the EU agricultural imports after the entering into force of the trade development and co-operation agreement (TDCA) have recently received new guidelines for applying for safeguard measures.
The guidelines have been published by the International Trade Administration (Itac) - an agency in the United States Department of Commerce that aims to strengthens the competitiveness of U.S. industry, and promote trade and investment.
These are the first guidelines which are made available for the companies operating in the agricultural industry in the country. South Africa has a legal framework which allows for the imposition of safeguard measures, but which does not apply to the agricultural industry, because the trade agreement set up a different method for the safeguards in respect of agricultural trade between South Africa and the EU. However, because there has never been any guidance on how it works, no one has applied until recently.
Itac chief commissioner Siyabulela Tsengiwe said local agro-processing companies were struggling to compete against imports from the EU that entered the local market duty-free because of the trade agreement. South Africa concluded its trade development and co-operation agreement (TDCA) with the EU in 1999. The TDCA consists of three areas of agreement: a free trade agreement between the EU and South Africa, development aid as well as economic and social co-operation, among other things.
Mr Geldenhuys said there had been criticism that the TDCA was not a balanced agreement as South Africa "liberalised" more than it should have if compared with the EU.
Reportedly, there has been much unhappiness about the effect of the trade agreement on the local agricultural sector, but uncertainty about the process for evoking safeguards has resulted in only two such applications since the agreement was implemented, according to experts.
Under the new guidelines, applicants would not have to prove a surge in imports or that the EU is dumping agricultural products in South Africa. They would only need to prove the imports have harmed them. According to the draft guidelines published in the Government Gazette on Friday, provisional measures can be implemented immediately if an applicant is able to show there are "exceptional circumstances". The measures would apply pending a final decision.
SA Trade Law Chambers director Rian Geldenhuys said it was expected that applications against the EU would rise, possibly leading to fewer agricultural imports from the bloc or more expensive imports.

Source: BusinessDay