WORLD TRADE  
ORGANIZATION   
WT/REG113/4 
15 November 2012 
 (12-6284) 
Committee on Regional Trade Agreements Original:   English 
  
 
TRADE DEVELOPMENT AND COOPER ATION AGREEMENT BETWEEN THE 
EUROPEAN UNION AND SOUTH AFRICA (GOODS) 
 
Questions and Replies 
 
 
 The following communication, dated 15 November 2012, is being circulated at the request of 
the delegations of the European Union and South Africa. 
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  This document reproduces the questions addressed to the Parties and the responses submitted. 
 
Questions from the delegation of the Separate  Customs Territory of Taiwan, Penghu, Kinmen, 
and Matsu 
 
Background information 
 1. Paragraph 13, pages 6-7, as indicated, Sout h Africa had to request formal concurrence 
for its bilateral agreement with the EU from th e other four members of SACU, i.e. Botswana, 
Lesotho, Namibia and Swaziland.  Although Botswana, Lesotho and Swaziland formally gave their concurrence and began to apply the Agre ement with respect to imports from the EU, 
Namibia did not give its concurrence and cont inues to apply SACU's MFN duties to imports 
from the EU. 
(a) How does this affect follow-up agreements on  trade in wine and spirits (i.e. in 
terms of effectiveness and operation)?  
Response from the delegation of South Africa 
 
 This question does not arise b ecause the wines and spirits agreements have not been ratified 
by South Africa.   
(b) Does the EU, as a contracting party to the TDCA, consider this to be a violation 
under the TDCA, and if so, what relief measures does it have? 
Response from the delegation of the Eu ropean Union to questions 1(a)-(b) 
 
 The EU is aware of internal arrangements between the members of the Southern African 
Customs Union.  However, the TDCA only applies to the trade relationship between South Africa and 
the EU.  Namibia's trade relations with the EU ar e therefore not governed by the TDCA.  Negotiations 
between the EU and the SADC EPA group are on-going.  
    WT/REG113/4 
Page 2  
 
  Other regulations 
Services 
 
2. Paragraph 64, page 19, Section B of Title III of this Agreement deals with the right of 
establishment and supply of services.  Although in  Article 30 the Parties express their desire for 
extending the scope of the Agreement to liberalize trade in services to be reviewed within five 
years of the entry into force of the Agreement, th is matter has been examined and discussed in 
detail, but there was no agreement to further libera lize trade in services between the Parties.   
(a) Why have the Parties not succeeded in reaching an agreement on trade in 
services since this Agreement was signed in 1999?  
Response from the delegation of South Africa 
 
 Article 30 provides no contractual commitment to negotiate a trade in services agreement but 
merely provides a basis for dialogue between the Par ties.  South Africa's policy position is that the 
Southern African region should develop a common a pproach to such issues  as a prerequisite to 
considering preferential agreements with any thir d party including the EU.  For the same reason, 
South Africa believes that the current process of se rvices negotiations in SADC should be concluded 
before considering services negotiations with third countries.  
(b) Have there been any significant difficulties or obstacles encountered which have 
influenced development of the bilateral negotiation process? 
Response from the delegation of South Africa 
 
 Please see response to question 2(a) above, which explains the point of departure of 
South Africa with respect to negotiating with any th ird party outside of the Southern African region. 
 
Response from the delegation of the Eu ropean Union to questions 2(a)-(b) 
 
 The Parties have not succeeded in reach ing agreement on trade in services because 
negotiations have not yet started.  As negotiations have not started, th ere is no analysis of the bilateral 
negotiation process yet available.  Negotiations w ill not commence before both Parties are ready to 
enter into commitments.  
 
3. Paragraph 65, page 19, in Article 31, the Parties state their willingness to apply the 
principle of unrestricted access to the internatio nal maritime market and traffic based on fair 
competition on a commercial basis.  The Partie s agree to extend to each other's nationals and 
the vessels registered in the territory of the Pa rties treatment no less favourable than that 
granted on an MFN basis in respect of the mari time transport of goods, passengers or both, 
access to ports, the use of in frastructure and auxiliary mariti me services of those ports and 
related fees and charges, customs facilities an d the assignment of berths and facilities for 
loading and unloading, based on fair competition and on commercial terms. 
(a) Does this principle mean that the Parti es fully open the international maritime 
services market to each other? 
Response from the delegation of South Africa 
 
 No. Article 31(1) is a best endeavour clause;  Article 31(2) confirms  MFN treatment set out 
under the GATS and Article 31(3) is for "the Parti es to agree to consider maritime transport…". 
  WT/REG113/4 
 Page 3 
 
 
  Response from the delegation of the European Union 
 
 No, the maritime transport is excluded from mo st favoured nation principle application in 
WTO, and hence the commitments given to SA are not extended to other countries.    
(b) In addition to nationals and registered  vessels of the Parties, does MFN 
treatment also apply to vessels registered  in third countries by nationals or 
enterprises of the Parties? 
 No, the benefits of the Agreement only a pply to vessels registered in the Parties. 
 Questions from the delegation of the United States 
 Goods liberalization 
 
4. According to Tables III.2A and III.2B and A nnex 1 Tables AI.1 and AI.2 of the Factual 
Presentation:  
- The European Union eliminates duties on 91. 3% of all tariff lines covering 89.8% of 
imports from South Africa under the Agreement .  However, though 96.1% of industrial 
tariffs are duty-free, only 73.0% of agricultural tariff lines are duty-free under the Agreement.   
 - South Africa eliminates tariffs on 72.5% of all tariff lines covering 93.1% of imports 
from the European Union under the Agreement.  70.2% of industrial goods are duty-
free and 91.4% of agricultural lines are duty-free under the Agreement. 
 
(a) How do the Parties explain the dispro portionate liberalization between the 
industrial and agricultural sectors for the European Union? 
(b) How do the Parties explain the dispro portionate liberalization between the 
industrial and agricultural sectors for South Africa? 
Response from the delegation of South Africa 
 
 Response to questions 4(a) and (b):  The ta riff reduction commitments set out in the TDCA 
are the product of the negotiations between the Pa rties.  These commitments would easily meet the 
GATT Article XXIV requirement that commitments  should cover "substantially all trade".  
South Africa was able to reserve more policy space in NAMA than in Agriculture, but would have 
preferred a better balance in the exchan ge of tariff concessions in Agriculture. 
 
(c) For what reasons did the European Union undertake liberalization on a lower 
percentage of agricultural tariff lines than South Africa?   
Response from the delegation of the Eu ropean Union to questions 4(a)-(c) 
 
 The objectives of the negotiations between the EU and South Africa were to negotiate an 
agreement that would lead to a higher degree of liber alization on both sides, that would all the same 
represent a balanced outcome, and that would protect the sensitivities of both parties.  The distribution 
of tariff line liberalization between the industrial and agricultural sectors as laid down in the TDCA 
was thought to best reflect these objectives.   
 WT/REG113/4 
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  Safeguards 
 
5. In paragraph 45 of the Factual Presentation , it states that surveillance or safeguard 
measures may be taken "{w}here any product is being imported in such increased quantities as to cause or threaten to cause 'serious deterioration in the economic situation'" of the European Union's outermost regions or to other members of the South African Customs Union.  See 
Articles 24.2 and 24.3 of the TDCA.  However, the standard "serious deterioration in the 
economic situation" is not defined in the TDCA.  Please provide further clarification as to the 
meaning of this standard, including the fact ors that would be considered in making a 
determination and the degree of "deterioration" th at would be required to make an affirmative 
determination.  Also, please explain how this  standard compares with the "serious injury" 
standard in the WTO Agreement on Safeguards. 
Response from the delegation of South Africa  
 
 The safeguard provisions in the TDCA have not been used and therefore the meaning of the 
standard, "serious deterioration in the economic situ ation", has not yet been defined any further by the 
Parties.  In conducting safeguard inv estigations, the legal basis used by  the SA investigating authority, 
the International Trade Administration Commission (IT AC), is the International Trade Administration 
Act as well as the ITAC Regulations.  In making seri ous injury determinations , ITAC would consider 
the factors as outlined in the WTO Agreement on Safeguards which are also contained in ITAC 
Regulations.    
Response from the delegation of the European Union 
 
 The concept of deterioration relates to the ec onomic situation of the region(s) concerned and 
has therefore a wider scope than "serious injury" si nce it does not exclusively refer to the situation of 
producers of the like or directly competing products.  
 
 The analysis of the deterioration in the ec onomic situation of a region shall be based on 
objective factors and include the following elements:  the increase of imports in absolute or relative 
terms, the effect of such imports on prices, as well as their effect on the situation of the domestic industry or the economic s ector concerned, including inter alia  the level of sales, production, financial 
situation and employment. 
 
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