SACU – EFTA FREE TRADE AREA

The European Union

• A customs union, like SACU• Principle of the “acquis de communataire”• EU enlargements:

* 1973 * 1981 * 1986 * 1995 * 2004 * 2007 (foreseen for Bulgaria and Romania)

EU 15

1957 1973 1981 1986 1995

Belgium Denmark Greece Spain Austria

France Ireland Portugal Finland

Germany UK Sweden

Italy

Luxemb.

Netherl.

EU Enlargement 2004

• Cyprus• Czech Republic• Estonia• Hungary• Latvia

• Lithuania• Malta• Poland • Slovenia• Slovakia

European Free Trade Association

• Iceland, Norway, Switzerland, Liechtenstein

• Not a customs union

• Closely integrated with the EU

• Trails the EU in relation to 3rd countries

• But does not have the common policies and pooling of resources as the EU has

POLITICAL ECONOMY

• SA trade policy vis-à-vis Europe

* Harmonisation on the back of the TDCA

* Single trading regime: SADC-EU

• SACU – EFTA

* Built SACU’s common policies

* Would inform the review of the TDCA

ECONOMIC RATIONALE

• Contractual versus unilateral access

• GSP versus FTA

• Small but wealthy markets

• Clothing and textiles stand to benefit

SCOPE OF MAIN AGREEMENT

• Trade in goods

* Tariff liberalisation

* Subject to rules of origin

• New generation issues

* Only cooporative provisions

* Rendez-vous clause

CONTENT OF MAIN AGREEMENT

Fish & marine

Processed agriculture

Industrial

EFTA offer

Duty free on 01/01/07

Equivalence with access enjoyed by EU

Duty free and quota free on 01/01/07

SACU offer

Certain lines back loaded

Almost similar to access enjoyed by EU

Almost similar to EU access

Liberalisation schedules

EU EFTA

List 0 2000 2003

List 1 2000-2003 2003

List 2 2003-2005 2006-2008

List 3 2003-2012 2006-2015

List 4 2005-2012 2008-2015

List 5 Partial, in 7th year of implementation

Partial liberalisation in 4th year of imple.

List 6 Reserved list Reserved list

ADMINISTRATION

• Single SACU origin

State of play

• All 9 parties committed to ratify before end of November

• If that is achieved, agreement to enter into force on 01/01/07