Communication from the Commission to the Council and to the representatives of the Governments of the Member States meeting within the Council to give orientation to the Commission for the revision of the Agreement on Trade, Development and Cooperation between the European Community and its Member States, of the one part, and the Republic of South Africa, of the other part
Date: 2006-06-28
Institutions: European Commission
Subjects: European Community, South Africa, cooperation agreement, cooperation policy, development aid, trade agreement

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 28.6.2006 
COM(2006) 348 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND TO THE 
REPRESENTATIVES OF THE GOVERNMENTS OF THE MEMBER STATES 
MEETING WITHIN THE COUNCIL 

to give orientation to the Commission for the revision of the Agreement on Trade, 
Development and Cooperation between the European Community and its Member 
States, of the one part, and the Republic of South Africa, of the other part 

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EXPLANATORY MEMORANDUM 

The Trade, Development and Cooperation Agreement between the European Community and 
its  Member  States,  of  the  one  part,  and  the  Republic  of  South  Africa,  of  the  other  part 
(TDCA)  was  signed  in  October  1999  and  has  applied  provisionally  and  partially  from  1 
January  2000.  After  ratification  by  all  parties,  the  Agreement  entered  fully  into  force  on  1 
May 2004.  

Article 103 of the TDCA calls for a review within five years of its entry into force in order to 
address the possible implications of other arrangements which may affect the Agreement. The 
“other arrangements” which the authors of the Agreement had in mind include undoubtedly 
the  Cotonou  Agreement,  which  itself  has  been  revised.  Article  18  of  the  TDCA  calls  for 
further steps in the process of trade liberalisation and for a review of the trade provisions, in 
particular of the customs duties applicable to products in the “waiting lists” of the TDCA, i.e. 
products for which limited or no trade liberalisation is laid down in the Agreement. Article 30 
calls for an extension of the scope of the Agreement to liberalisation of trade in services. 

Article 97(3) provides that the Cooperation Council shall have the power to take decisions in 
respect  of  all  matters  covered  by  the  TDCA  and  Article  106(1)  gives  to  the  Cooperation 
Council the power to decide on amendments put forward by any Party. This provision should 
be used for the proposed revision. 

In the course of 2004 the Commission, the Member States and the Republic of South Africa 
conducted a review of the TDCA, focusing primarily, but not exclusively, on those sections of 
the Agreement that were provisionally being applied. This review led to the adoption by the 
Cooperation  Council  on  23  November  2004  of  “Joint  Conclusions”  setting  out  broad 
guidelines for a revision of the TDCA. The Joint Conclusions call inter alia for the political 
dialogue between the parties to “include exchanges of views on more recent political issues 
such  as  Weapons  of  Mass  Destruction,  Counter-terrorism  and  the  International  Criminal 
Court”,  and  recommend  that  “reciprocal  trade  liberalisation  be  continued  and  possibly 
accelerated, taking into account the sensitivities on both sides, the regional dimension and the 
time schedule for the ongoing negotiations concerning the Economic Partnership Agreement 
in Southern Africa”. 

On  the  basis  of  these  Joint  Conclusions,  Commission  staff  and  the  representatives  of  the 
Member  States  in  the  Council  ACP  Working  Group  have  further  discussed  and  refined  the 
scope and purpose of a revision of the TDCA.  

The  overall  assessment  Commission  staff  have  made  of  these  recommendations  in  terms  of 
amendments to the TDCA is that a major overhaul of the agreement is not required. However, 
the Agreement needs to be updated to reflect the new political and security provisions of the 
revised  Cotonou  Agreement,  further  trade  liberalisation,  cooperation  in  trade-related  areas, 
strengthening the environmental dimension, and updated wording for some of the articles on 
economic and other areas of cooperation. 

After  having  negotiated with South African  authorities,  the Commission will  propose to the 
Council  a  more  finalised  text  in  the  form  of  a  decision  of  the  Cooperation  Council  in 
accordance with Article 300(2), second subparagraph, of the EC Treaty. 

The Commission therefore proposes that the Council issue the appended orientations for the 
revision of the TDCA. 

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PROPOSED ORIENTATIONS FOR THE REVISION OF THE TDCA  

1. 

INTRODUCTION 

The  Trade,  Development  and  Cooperation  Agreement  between  the  European 
Community and its Member States, of the one part, and the Republic of South Africa, 
of the other part (TDCA) was signed in October 1999 and has applied provisionally 
and  partially  from  1  January  2000.  After  ratification  by  all  parties,  the  Agreement 
entered fully into force on 1 May 2004.  

Article 103 of the TDCA calls for a review within five years of its entry into force in 
order  to  address  the  possible  implications  of  other  arrangements  which  may  affect 
the Agreement. The other arrangements which the authors of the Agreement had in 
mind include undoubtedly the Cotonou Agreement, which itself has been revised.  

Article  18  of  the  TDCA  calls  for  further  steps  in  the  process  of  trade  liberalisation 
and for a review of the trade provisions, in particular of the customs duties applicable 
to products in the “waiting lists” of the TDCA, i.e. products for which limited or no 
trade  liberalisation  is  laid  down  in  the  Agreement.  Article  30(4)  states  that  the 
objective  of  ‘further  liberalisation  of  trade  in  services’  shall  be  subject  to  a  first 
examination  by  the  Cooperation  Council  at  the latest  five  years  after  the  entry  into 
force of the Agreement. 

The  review  of  the  TDCA  which  the  Commission,  the  Member  States  and  the 
Republic  of  South  Africa  conducted  during  2004  led  to  the  adoption  by  the 
Cooperation Council on 23 November 2004 of “Joint Conclusions” setting out broad 
guidelines for a revision of the TDCA.  

2. 

PURPOSE OF THE PROPOSED REVISION 

The  Trade,  Development  and  Cooperation  Agreement  is  still  by  and  large  a  good 
basis for cooperation between the signatory parties. In the past six years none of the 
parties have shown any intention of making fundamental changes to the text.  

As implied in Articles 18, 30 and 103 of the Agreement, the purpose of the revision 
should be to examine possible further trade liberalisation and to bring the TDCA in 
line  with  recent  international  commitments,  including  the  Revised  Cotonou 
Agreement,  the  International  Criminal  Court  and  the  global  fight  against  terrorism. 
The revision is also an opportunity to strengthen the environmental dimension of the 
Agreement,  including  the  environmental  impact  resulting  from  enhanced  trade  in 
goods, and to update the language in some of the provisions.  

3. 

ISSUES INVOLVED 

In  the  light  of  the  above,  the  Commission  has  identified  the  following  issues  to  be 
considered for amendment: 

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–  In  the  Preamble,  an  explicit  reference  to  the  Millennium  Development  Goals 

needs to be included. 

–  In Title I, with regard to the political dimension, the Agreement should be brought 
into  line  with  the  Council  provisions  concerning  the  inclusion  in  international 
agreements of references to the fight against terrorism, the International Criminal 
Court,  non-proliferation  of  weapons  of  mass  destruction  and  other  international 
commitments.  

–  In Title II on trade, and its annexes, further trade liberalisation must be considered 
in  line  with  Article  18.  In  addition,  the  resolution  of  outstanding  trade  issues 
requires minor changes. 

–  In  Title  III,  on  trade-related  issues,  rules  of  origin,  trade  in  services  and 
cooperation  and  mutual  administrative  assistance  in  customs  matters  need  to  be 
considered. 

–  In  Title  IV  on  economic  cooperation,  updated  wording  must  be  considered  for 
cooperation in the fields of energy, transport, agriculture and sanitary and phyto-
sanitary matters. 

–  In  Title  V  on  development  cooperation,  some  provisions  concerning 
implementation need to be brought in line with the  new  Financial Regulation of 
the Commission.  

–  In Title VI concerning cooperation in other areas, updated or new wording must 
be  considered  for  cultural  cooperation,  for  cooperation  on  matters  relating  to 
justice,  freedom  and  security  and  the  fight  against  drugs,  money  laundering  and 
organised crime. In addition, a provision on cooperation in the field of migration 
needs to be added. 

–  In Title VIII, the dispute settlement system should be improved in so far as trade 

and trade-related issues are concerned, in order to increase its effectiveness. 

3.1.  Millennium Development Goals 

Objective of the proposed change 

To  affirm  the  partners’  commitment  to  these  goals  and  ensure  coherence  with  the 
preamble of the revised Cotonou Agreement. 

Proposed amendments 

Add a recital on the Millennium Development Goals. 

Relevant provisions: Preamble.  

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3.2. 

Security issues 

Objective of the proposed change 

To  ensure  coherence  with  the  political  commitments  expressed  by  the  EU  on  the 
fight  against  terrorism  (Seville  Presidency  Conclusions,  21-22  June  2002), 
cooperation in countering the proliferation of weapons of mass destruction (Council 
Conclusions of 17 November 2003) and support to the International Criminal Court 
(Common  Position  2003/444/CFSP  of  16  June  2003  and  Thessaloniki  Presidency 
Conclusions,  19-20  June  2003).  Bring  the  TDCA  in  line  with  the  revised  Cotonou 
Agreement.  

Proposed amendments 

•  a  legally  binding  commitment  to  cooperating  in  countering  the  proliferation  of 
weapons of mass destruction taking into account the EU policy paper concerning 
the non-proliferation clause in EU relations with third countries;  

•  a legally binding commitment to the fight against terrorism; 

•  reference  in  the  preamble  to  the  “joint  commitment  of  EU  and  ACP  partners  to 
international justice and the fight against impunity” and to the Rome Statute of the 
International  Criminal  Court,  which  entered  into  force  on  1  July  2002  and  a 
legally binding commitment to cooperating in this field;  

•  a  legally  binding  commitment  to  cooperate  in  the  prevention  of  mercenary 

activities. 

Relevant provisions: Preamble; new provisions to be included in Title I.  

3.3. 

Political dialogue 

Objective of the proposed change 

Bring the provisions of Articles 3 (non-execution) and 4 (political dialogue) into line 
with the revised Cotonou Agreement. 

Proposed amendments 

In Article 3(4), include a commitment to exhaustive political dialogue as described in 
Article 4, prior to taking “appropriate measures”. Bring Article 4 more into line with 
the revised text of Article 8 of the Cotonou Agreement.  

Relevant provisions: Articles 3 and 4.  

3.4. 

Further trade liberalisation 

Objective of the proposed change 

Include  new  provisions  for  further  reciprocal  trade  liberalisation  or  acceleration  of 
existing liberalisation schedules in the areas of goods (customs duties applicable to 
products included in the ‘waiting lists’), taking into account the provisions negotiated 

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under  EC-SADC  EPA  negotiations  and  the  sensitivities  on  both  sides.  Ensure 
coherence  of  these  provisions  with  those  negotiated  under  EC-SADC  EPA 
negotiations. 

Background / Problem to be solved 

Both  sides  have  exchanged  comprehensive  papers  on  their  respective  levels  of 
ambition with respect to trade provisions to be revised. These are of two kinds: 

– 

– 

 the  first  aims  at  improving  the  TDCA  in  areas  where  commitments  already 
exist (mainly trade in goods). This would also be an opportunity to make some 
necessary technical adjustments to the Annexes. 

 the  second  aims  at  extending  the  scope  of  the  TDCA  to  areas  which  are 
currently not or partially covered by the Agreement and could include WTO-
plus commitments in several new regulatory areas. 

Proposed amendments 

Further  liberalisation  of  the  trade  in  goods  (review  of  excluded  products  and 
acceleration of existing liberalisation schedules contained in Articles 11 to 15 and 17, 
plus the relevant Annexes). New legally binding commitments concerning the review 
of the safeguard clause (Articles 16 and 24-26). 

Relevant provisions: Title II and Annexes I to VII, in particular Articles  11-15 and 
17, as well as Articles 16 and 24-26. 

3.5. 

Trade-related issues  

Objective of the proposed change  

Include new binding commitments and enhanced cooperation in trade-related areas. 
Ensure  coherence  of  these  provisions  with  those  negotiated  under  EC-SADC  EPA 
negotiations. 

Background / Problem to be solved 

These  commitments  will  be  an  incentive  for  rules  based  market  access  within  the 
region. They will ensure additional transparency and predictability for operators and 
enforceability of rules in the region and consolidate development.  

Proposed amendments  

Include binding commitments in areas such as services (Articles 29-30), investment 
(Articles 32-34), and new commitments on Government procurement (Article 45).  

intellectual  property 

Enhanced cooperation and possibly additional commitments will also concern areas 
(Articles  35-39), 
such  as 
standardisation and conformity assessment and customs (Articles 47-48). Concerning 
rules of origin (Article 28 and Protocol 1), revision of some product-specific rules of 
origin concerning a limited number of tariff headings may be required. 

(Article  46),  competition 

Relevant provisions: Title III and Protocol 1. 

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3.6. 

Dispute settlement on trade and trade-related issues 

Objective of the proposed change 

Bring the dispute settlement system in line with more recent EC practice, in order to 
increase its effectiveness. 

Background/Problem to be solved 

The  dispute  settlement  provisions  of  the  TDCA  represented  a  step  forward  at  the 
time of their negotiation, but they fall short of the standards achieved in more recent 
agreements. Under the current system, possibilities for procedural blockages remain 
and important aspects of compliance are not regulated. 

Proposed amendments 

Further  develop  the  rules  on  dispute  settlement,  in  so  far  as  trade  and  trade-related 
issues are concerned, through a Protocol to the TDCA which would set out in detail 
the principles and procedures to settle disputes. 

Relevant provisions: Article 104. 

3.7. 

Provisions on economic cooperation 

Objective of the proposed change 

Bring the wording of certain provisions in line with current thinking and EC policy. 

Background/ Problem to be solved 

The TDCA was negotiated in the late 1990s. On some of the issues EC policy and 
general thinking have further developed. Many of the proposed changes are minor or 
technical and would not normally require an amendment to the Agreement. But since 
amendments  are  needed  in  other  sections,  this  is  an  opportunity  to  update  some 
provisions.  A  more  substantial  change  is  proposed  concerning  sanitary  and  phyto-
sanitary  issues,  which  have  turned  out  to  be  an  important  impediment  to  trade  and 
therefore require enhanced cooperation. 

Proposed amendments 

The  proposed  amendments  concerns  sanitary  and  phyto-sanitary  matters,  energy, 
mining, transport, postal cooperation and tourism. Article 61 deals with sanitary and 
phyto-sanitary matters and with cooperation on Agriculture. The proposal is to split 
Article  61  into  two,  with  stronger  environmental  language  for  Article  61  and  with 
Article  61A  dealing  specifically  with  cooperation  in  sanitary  and  phyto-sanitary 
matters.  Concerning  transport  it  is  proposed  to  split  Article  59,  with  Article  59A 
dealing  specifically  with  cooperation  on  maritime  transport.  Article  55  on 
“Information Society – Telecommunications and information technology” should be 
updated to take into account inter alia the evolution of technologies, the findings of 
the  World  Summit  on  Information  Society  and  the  interconnection  of  the  EC  and 
South  Africa  research  networks.  Less  important  changes  concern  enhanced 
cooperation  on  energy,  in  particular  in  promoting  energy  efficiency  policy  and 

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technologies  as  well  as  clean  coal  technologies,  postal  cooperation,  mining  and 
tourism. In addition the environmental impact of many of these provisions needs to 
be addressed. 

Relevant provisions: Articles 56 to 61. 

3.8. 

Development cooperation 

Objective of the proposed change 

Some  provisions  concerning  implementation  need  to  be  brought  into  line  with  the 
new  Financial  Regulation  of  the  Council  and  with  the  proposed  regulation  for 
development cooperation1 or the equivalent legislative instrument, once it is adopted. 

Background / problem to be solved 

implementation  of  development 
The  TDCA  contains  certain  provisions  on 
cooperation that have been superseded by the Community Financial Regulation. De 
facto  they  are  not  applied.  There  is  a  case  for  adjusting  these  provisions,  as  the 
general financial regulation applies across the board.  

Proposed amendments 

Review those provisions that have been superseded by the Financial Regulation. 

Relevant provisions: Title V. 

3.9. 

Cooperation in other areas 

Objective of the proposed change 

Bring  the  wording  of  certain  provisions  into  line  with  current  thinking  and  EU 
policy.  Strengthen  the  provisions  on  such  issues  as  justice,  freedom  and  security, 
money laundering, drugs and migration. 

Background / problem to be solved 

The TDCA was negotiated in the late 1990s. On some of the issues EC policy and 
general thinking has further developed. The provision on cultural cooperation could 
be  updated  in  the  light  of  multilateral  commitments.  The  fight  against  drugs  and 
money  laundering  are  dealt  with  in  a  single  article,  reflecting  the  thinking  of  that 
time. As the two issues are now considered linked but quite separate, the provision 
could  best  be  split  into  two  distinct  articles  with  updated  wording  that  should  also 
include terrorism financing. New provisions must be added on combating organised 
crime  and  counter-terrorism  and  on  cooperation  in  the  field  of  migration.  Stronger 
and  updated  wording  needs  to  be  adopted  for  the  provisions  on  the  environment. 
Revised  possibilities  for  enhanced  cooperation  could  be  considered  on  the 
environment, social issues, information, press and audiovisual media, data protection 
and health. 

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COM(2004) 629. 

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Proposed amendments 

Include a reference in Article 85 to the UNESCO Convention on the protection and 
promotion  of  the  diversity  of  cultural  expressions,  particularly  with  a  view  to  its 
ratification and implementation. Split Article 90 into two, with Article 90A dealing 
with  money  laundering.  Add  new  provisions  on  the  above  subject.  Update  the 
wording of Articles 84, 86 to 89, 91 and 92. 

Relevant provisions: Title VI, Articles 84 to 92. 

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