Tdca Agreement

April 12, 2021

The Ministry of Trade and Industry (DTI) informed the committee of the additional protocol to the SA/EU Agreement on Trade Development and Cooperation (TDCA). Trade relations between SA and the European Union (EU) were governed by the TDCA, which provided for the establishment of a free trade agreement over a 12-year transitional period. The TDCA was the most ambitious cooperation agreement ever with a third world country. The TDCA came into force on May 1, 2004 and its full implementation has been in effect since the end of 2012. The agreement provided for the liberalisation of 95% of EU imports from SA over ten years and 86% of SA imports from the EU from the EU in 12 years, which came into force in 2012. Trade between SA and the EU increased from R150 billion in 2000 to R407 billion in 2014. Trade has increased by 231% since its provisional implementation. The scope of the agreement extended to about 90% of current trade between SA and the EU. The agreement included a broad area of cooperation covering trade-related issues, such as competition and intellectual property, financial support, development cooperation, economic cooperation and political dialogue. As part of the Southern African Customs Union (SACU), SA was involved in an economic partnership with the EU in 2014.

The advantage of the TDCA was that it was a legal instrument that linked SA`s trade relations with the EU. Since the TDCA came into force, the EU and SA have put in place better market access. The TDCA also provides for the development of additional protocols to facilitate the smooth accession of new members to the EU, as well as the extension of trade preferences. Since the signing of the TDCA, there have been three EU enlargements. The first took place in 2004 with the accession of the Czech Republic, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia to the EU. In 2007, Bulgaria and Romania joined. The last addition to the EU was Croatia in July 2013. The information has therefore been sent to the European Parliament to ratify Croatia`s EU accession protocol. The additional protocol has created a legal basis for the extension of the CSCP to Croatia. The aim was to ensure that Croatia benefited from the TDCA and that SA`s exports to Croatia receive preferential treatment. In essence, the DTI called on the Committee to speed up the protocol.

Delays could not take place because export duties were far too expensive. Opportunities and challenges were highlighted. With the enlargement of the EU, the economic challenge for South African economic actors would be greater, but also a greater export opportunity. At present, the EU accounted for 40% of SA`s total trade. With the current enlargement, the EU`s population is expected to grow by more than EUR 4 million, creating an even larger market for SA exports. It was also expected that the TDCA would have an overall positive impact on trade between its SA and Croatia. SA`s main exports to Croatia included mineral products, base metals, prepared foods, beverages, cement and plant products. Croatia, on the other hand, exported machinery and mechanical equipment, vehicles and wood to SA. Other opportunities were offered to South Africa in sectors such as agriculture, machinery, transport and electrical equipment that South African exporters were able to use after SA`s preferential access to Croatia came into force. Croatia`s accession to the EU has had the potential to create jobs in different sectors and stimulate economic growth. Croatia`s accession to the EU was expected to offer more opportunities than threats to SA. Trade between Bulgaria and SA increased from R43 million in 2004 to R1114 1.4 billion.

Trade with Romania increased from 654 million rim in 2007 to 3.8 billion rim in 2013. Members were assured that the protocol had been consulted. Prior to the signing of the protocol, the DTI had discussed with the Consei