WORLD TRADE  
ORGANIZATION   
WT/REG113/M/1 
20 December 2012 
 (12-7008) 
Committee on Regional Trade Agreements 
Sixty-seventh Session  
 
 
 
CONSIDERATION OF THE TRADE, DEVELOPMENT AND COOPERATION 
AGREEMENT BETWEEN THE EUROPEAN UNION AND  
SOUTH AFRICA, GOODS  
 
Note on the Meeting of 20-21 November 2012 
 
Chairman:  Mr. F. Riegert (France) 
 
 
1. The 67th Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WT O/AIR/4013/Rev.1 dated 9 November 2012. 
2. Under Agenda Item B.III of this session, the CRTA considered the Trade, Development and 
Cooperation Agreement between the European Union and South Africa (hereinafter the 'Agreement'), 
goods.  
3. The Chairman noted that the Agreement had en tered into force on 1 January 2000.  It had 
been notified to the WTO by the Parties on 2 November 2000 under Article XXIV:7(a) of the 
GATT 1994 and the Understanding on the Interpre tation of Article XXIV of GATT 1994 as an 
Agreement establishing a free trade area (documen t WT/REG113/N/1).  The text of the Agreement 
was available, together with its Annexes, on the Pa rties' official websites.  The Factual Presentation 
on the goods aspects (document WT/REG113/3 dated 29 August 2012) had been prepared by the 
Secretariat on its own responsibility in full consultation with the Par ties, in accordance with paragraph 
7(b) of the Transparency Mechanism for Regiona l Trade Agreements (document WT/L/671).  In 
addition, written questions and replies on this Agreement had been distributed in document 
WT/REG113/4.  He proposed to organize the cons ideration of the Agreement by first asking the 
Parties and then other Members to give any genera l comments and to then review the specifics of the 
Agreement. 
4. The representative of the European Union thanke d the Secretariat for the factual presentation 
and also South Africa for its assistance in preparing for the review and the joint responses to questions 
received from WTO Members.  He had pleasure in  presenting the Agreement to the Committee.  
5. The TDCA was a special agreement.  It had been  one of the EU's first agreements negotiated 
outside the Euro-Mediterranean region.  It had also  been negotiated at the time when South Africa 
was in the process of economic and social transition.   The Agreement had been drafted to support the 
transition process, to cement South Africa's inte gration into the world trading regime and to 
encourage trade liberalization and economic restructuring.  
6. More than a decade had passed since the Agreement had been signed in 1999 which allowed 
Parties to see where they stood and whether the TD CA had delivered.  The EU presented some telling 
figures.  Trade between the Parties had increased  by more than 120% since the signing of the 
Agreement.  FDI flows had increased five-fold.  Trad e in services also had increased substantially.  WT/REG113/M/1 
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  That showed that the trade relationship between the EU and South Africa was healthy, mature, and 
went beyond normal day-to-day trade.  
7. 2010 also marked the end of tariff dismantlement  as scheduled in the Agreement. The TDCA 
was therefore fully implemented.  Tariff liberali zation had led during the period 2008-2010 to more 
than 91% of all South African exports to the EU be ing duty-free, whereas 87% of EU exports to South 
Africa were no longer subject to tariffs.  
8. The Agreement had trade related provisions on safeguards, measures concerning infant 
industries and confirmed WTO principles on anti- dumping and countervailing measures, trade in 
services, and intellectual property rights.  
9. The Agreement was already 12 years old and had been  beneficial to trade between the Parties.  
But it could not be seen in isolation from its regiona l setting for two reasons.  First, South Africa was 
a member of the Southern African Customs Union (SACU).  This meant that the other members of 
SACU (Botswana, Lesotho, Namibia and Swaziland) and South Africa had a common external tariff.  
Second, negotiations on an Economic  Partnership Agreement (EPA) between the EU and the SADC 
EPA group members, of which South Africa was a me mber, were on-going.  There were negotiations 
on agricultural market access, the result of whic h could improve on the existing arrangements under 
the Agreement.  
10. Now that tariffs had been dismantled, the EU  looked forward to seeing the fruits of the 
Agreement in the years to come.  It also looke d forward to concluding the EPA talks with South 
Africa and the other members of the SADC EPA Group.  The EU looked forward to a fruitful discussion and would endeavour to answer all Members' questions as they arose.  
11. The representative of South Africa thanked the S ecretariat for the work undertaken to prepare 
for the meeting and the EU Delegation for the work they had done together leading up to the Factual 
Presentation.  South Africa considered the Factua l Presentation an opportunity to outline, from its 
perspective, the broad contours of South Africa's trade and investment relationship with the EU, the 
contribution of the Agreement to that relationship, and some of the challenges that had arisen in its 
implementation.  The EU had been and remained Sout h Africa's largest trade and investment partner.  
Since 1999, the relationship had been anchored in  the TDCA which provide d for political dialogue, 
development cooperation and cooperation in a range of other economic and social development areas.  
The South Africa- European Union Strategic Pa rtnership that had been launched in 2007 had 
strengthened the engagement by estab lishing annual Summit level meetings.  
12. The trade relationship had unfolded in the cont ext of profound change in the global economy 
and had been reflected in shifts in the relative sh ares of trade flows.  While the EU, as a block, 
remained South Africa's largest trading partner, the EU's share of South Africa's total trade had 
declined from around 44% in the mid-1990s to 26.5% in 2011.  Given the importance of EU demand, 
the current economic difficulties and future growth  prospects in the EU were cause for serious 
concern.   
13. The trade component of the TDCA contained a free trade agreement in goods as provided for 
by, and consistent with, Article XXIV of the Gene ral Agreement on Tariffs and Trade (GATT).  The 
current year marked the full implementation of the tariff reduction programme that had been phased in 
over a 12-year transition period.  Using the statistical  reference period agreed in the Agreement, South 
Africa would have eliminated tariffs on 72.5% of  all tariff lines covering 93.1 % of imports from the 
EU of which 70.2% of industrial goods were duty-fr ee and 91.4% of agricultural lines were duty-free.  
The EU would have eliminated duties on 91.3% of all tariff lines covering 89.8% of imports from 
South Africa.  Of this, 96.1 % of industrial tariffs  were duty-free, and around 61.0% of agricultural  WT/REG113/M/1 
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  tariff lines were duty-free.  The EU provided margins of preference to South African exports on 
another 12% of agricultural tariff lines.  
14. South Africa's bilateral trade with the EU am ounted to R 140.506 billion in 2000, growing to 
R 353.459 billion in 2011, a 60.3% growth.  Sta tistics from the WTO Secretariat showed imports 
from the EU had constituted 32% of South Africa's total global imports in 2010, while South Africa's 
total exports to the EU had accounted for 1.2% of  the EU's global imports.  These statistics also 
indicated that the EU had consistently run a trade surplus with South Africa over the decade ending in 
2010.  It was noteworthy that a large proportion of S outh Africa's exports to the EU were higher value 
added products, providing significant impetus to  South Africa's industrial development and 
employment creation objectives.  EU Member States historically and collectively had been the largest 
source of foreign direct investment in South Africa. A recent study had estimated that EU companies 
accounted for over 80% South Africa's FDI stock and were present in sectors across the entire economy.  
15. It was also important to mention that the TDCA provided an institutional framework to 
address trade friction and disputes through the Trade Cooperation Committee established under the 
Agreement.  
16. All these aspects of the Agreement were indeed  positive.  Nevertheless, the experience of 
implementing the Agreement had also revealed a range of shortcomings which provided important 
lessons for future engagements.  The TDCA negotia tions had been initiated in the period immediately 
following the ending of apartheid and the establishmen t of democracy in South Africa in 1994.  At the 
time, the new government had not fully develope d the policies that would become essential to 
effecting the necessary social and economic transf ormation from an apartheid society and economy to 
one that fully met the needs of the majority of the people.  Further, South Africa had yet to elaborate the regional economic integration strategy that had s ubsequently become a central pillar of its external 
economic policy.  As a result, the TDCA did not al ways cohere with policies related to industrial 
development and regional integration.  
17. The most serious and strategic shortcoming of  the TDCA was that it excluded other members 
of the Southern African Customs Union (SACU) of  which South Africa was a part, with Botswana, 
Lesotho, Namibia and Swaziland.  While the reasons for such a state of affairs was debatable, there 
was no doubt that differential access to the EU market and rules of origin and trade remedies had been 
a source of considerable policy and legal incoheren ce that had undermined the effectiveness of the 
customs union.  Indeed, such incoherence was one of  the reasons that South Africa was unable to 
invoke the TDCA agricultural safeguard.  
18. In the current Economic Partnership Agreem ent (EPA) negotiations with the EU, South 
Africa was seeking to address these issues so that the outcome fully recognized and supported the 
consolidation of the customs union.  South Africa th erefore remained wary of any outcome that would 
create differential legal obligations among members of SACU and undermine the integration effort.  
19. Another concern was that while the overa ll exchange of tariff concessions under the 
Agreement had been in favour of South Africa, the negative impact of the imbalanced exchange in 
agriculture was increasingly eviden t.  As much of South African tariff reduction commitments had 
been back-loaded and had taken effect more recen tly, growing pressure on agricultural producers was 
not offset with sufficiently adequate access to th e EU market. The situation had been compounded by 
the absence of disciplines to level the playing field in  respect of government support to agriculture.  In 
addition there was growing concern at the prolifer ation of new non-tariff barriers that impeded access 
to the market of South Africa's largest trading part ner.  A further shortcoming was the absence of an 
effective provision to allow the Parties to correct technical errors that had been discovered in the WT/REG113/M/1 
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  implementation of the Agreement.  This oversight had had serious effects on certain industries in 
South Africa and needed to be addressed in future.   
20. In conclusion she stated that the Agreement had been a vital instrument in building South 
Africa's trade and investment relations with its si ngle most important trading partner, the EU.  The 
Agreement had contributed to significant growth  in bilateral trade and the Agreement's policy 
framework embedded had encouraged foreign direct investment flows to South Africa.  Increasingly, 
too, South African companies were investing in the EU.   
21. South Africa considered it useful to also provide WTO Members with a sense of some of the 
most important challenges it had to  confront in implementing the Ag reement both for a more balanced 
understanding of the Agreement and to offer, if u seful, lessons to other trading partners.  Indeed, 
many of the challenges identified were the subject of current negotiations with the EU under the EPA.  
22. While it could state unreservedly that the Ag reement would meet the technical and legal 
requirements set out in the GATT Article XXIV rules, South Africa continued to work to ensure that 
its future iteration - under the EPA - would meet its standard for promoting its  trade and development 
and that of the Southern African region more decisively.  
23. The United States had one follow up question specifically for the delegation from 
South Africa with respect to the response to qu estion 5 in the question and answer document.  
Regarding the meaning of serious deterioration in relation to surveillance of safeguard measures, the 
EU had stated that "the concept of deterioration relates to the economic situation of the region or 
regions concerned and has therefore wider scope than  serious injury since it does not exclusively refer 
to the situation of producers of the like or dir ectly competing products.  The analysis of the 
deterioration in the economic situation of a region shall be based in objective factors and include the 
following elements: the increase in imports in absolute  and relative terms, the effects of such imports 
on prices as well as their effect on the situation of the domestic industry or the economic sector concerned, including, inter alia, the level of sales,  production, financial situation and employment".  
The United States wish to know whether South Africa agreed with the EU's understanding of how the 
issue of serious determination must  be analysed under the Agreement? 
24. South Africa responded that the interpretation of the standard had not been tested.  Since 
South Africa was part of a customs union it was not a position to use a bilateral safeguard instrument 
that excluded the other members of the customs union.   Whether South Africa agreed or not with the 
response given by the EU on the interpretation of the standard was therefore not an issue. 
25. The Chairman said that the consideration of th e Goods aspects of the Trade, Development and 
Co-operation Agreement between the European Un ion and South Africa had allowed the Committee 
to clarify a number of questions and oral discu ssions of the RTA could now be concluded in 
accordance with paragraph 11 of the Transparency Mechanism.  If any delegation wished to ask 
follow-up questions they were invited to forward subm issions in writing to the Secretariat by the 27 of 
November 2012 and Parties were as ked to submit replies in writing by no later than 11 December 
2012.  In accordance with paragraph 13 of the Tr ansparency Mechanism all written submissions, as 
well as minutes of the meeting woul d be circulated promptly, in all WTO official languages, and 
would be made available in the WTO website. 
26. The Committee took note of the comments made. 
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