WRITTEN QUESTION E-0410/99

by Honório Novo (GUE/NGL) to the Commission

(1 March 1999)

Subject: Counter-concessions granted under the future trade agreement with South Africa

Information from various sources indicates that a draft agreement has been drawn up between the South African Trade Minister and Commissioner DeusPinheiro regulating future trade relations between the EU and South Africa.

Under the draft agreement, it appears that South Africa will be able to continue producing wine designated "Port" and/or "Porto" and/or "Port Wine" for the internal market for a period of 12 years, after which the matter will be analysed again, that is without any binding provision being made from the outset for a ban on the production of wine with those designations of origin at the end of the 12 years.

It also appears that South Africa will be banned from using the designations of origin "Port" and/or "Porto" and/or "Port Wine" for wines destined for export to third countries after a five-year transitional period.

On the other hand, Agence Europe of 4 February reports that, as a counter-concession, South Africa will benefit from preferential tariffs for other types of wine which it exports to the European market, including access to zero duty for some of them.

1. In this context, can the Commission confirm that the terms of the draft agreement provide for this type of counter-concession for South Africa? If so, does the Commission not believe that excessive counter-concessions are being granted in exchange for respecting products with a European designation of origin, respect which should be guaranteed immediately in any case?

2. Can the Commission forward a list of the South African wines for which zero customs duty for access to the Community market has already been offered?

Joint answer

to Written Questions E-0408/99, E-0409/99 and E-0410/99 given by Mr Pinheiro on behalf of the Commission

(30 April 1999)

On 24 March 1999 the European Council in Berlin approved the trade, development and co-operation agreement between the Community and South Africa.

As regards the issue of port and sherry the finally accepted compromise formula reads as follows:

1. South Africa reconfirms that the names "port" and "sherry" are not and will not be used for its exports to the EU.

2. South Africa will phase out the use of the "port" and "sherry" names on all export markets within 5 years, except in the case of non-SACU SADC countries, where an 8 years phase out period would apply.

3. For the purpose of the Wines and Spirits Agreement, the South African domestic market is defined to cover SACU (South Africa, Botswana, Lesotho, Namibia and Swaziland).

4. South African products may be marketed as "port" and "sherry" on the South African domestic market during a 12 year transitional period. Beyond that period the new denominations of these products which shall be used on the South African domestic market will be jointly agreed between South Africa and the EU.

5. From entry into force of the agreement, the EU will provide a duty free quota for wines covering the current level of trade of 32 million litres of South African exports to the EU, with allowance for the future growth of this quota.

6. As an additional effort to the main objectives agreed for the Development program for South Africa to be funded by the EU, the EU will provide assistance of 15 million euro for the restructuring of the SA wines and spirits sector and for the marketing and distribution of SA wines and spirits products. Such assistance will commence at entry into force of the Wines and Spirits Agreement.

7. A Wines and Spirits Agreement between South Africa and the EU will be concluded as soon as possible and no later than in September 1999, in order to ensure that the entry into force of the Wines and Spirits Agreement will take place before or in January 2000.

As for the specific questions asked:

Paragraph 4 of this text talks about a transition period, and the need to jointly agree on the new denominations of the products involved. This language clearly suggests that the use of these names on the South African domestic market will be discontinued.

South Africa does not and will not market products under the name "port" and "sherry" on the Community market (see paragraph 1). As for other third country markets the provision of paragraph 2 is self- explanatory.

The Community would not be able to agree the continued use of the names "port" and "sherry" by South African producers on the South African domestic market beyond the agreed transition periods.

The quota indicated in paragraph 5 refers to product codes 22042179 / 80 / 83 / 84 and 94. The quota offered is well below current South African exports to the Community and only covers bottled wine.