Trade, Development and Cooperation Agreement (TDCA) with South Africa

 

SUMMARY OF:

Agreement on Trade, Development and Cooperation between the EU and South Africa

Decision on the conclusion of the Trade, Development and Cooperation Agreement between the EU and the Republic of South Africa

WHAT IS THE AIM OF THE AGREEMENT AND THE DECISION?

The agreement seeks to strengthen relations between the EU and South Africa in a variety of fields in the areas of trade, development and cooperation.

The decision adopts the agreement on behalf of the EU.

KEY POINTS

The agreement has several objectives:

• strengthening dialogue between the parties,
• supporting South Africa in its economic and social transition process,
• promoting regional cooperation and the country’s economic integration in southern Africa and in the world economy, and
• expanding and liberalising trade in goods, services and capital between the parties.

Based on respect for democratic principles, human rights and the rule of law, the agreement establishes a regular political dialogue on subjects of common interest, both at bilateral and regional level (within the context of the EU’s dialogue with the countries of southern Africa and with the group of the African, Caribbean and Pacific (ACP) countries).

The duration of the agreement is unspecified, but it can be revised within 5 years of the date of its entry into force in order to consider possible amendments.

The agreement covers a number of areas and includes a future developments clause making it possible to widen the field of cooperation.

Trade

The TDCA establishes preferential trade arrangements between the EU and South Africa, with the progressive introduction of a Free Trade Area (FTA). The EU is South Africa’s main trading and investment partner. The FTA aims to ensure better access to the EU market for South Africa and access to the South African market for the EU. As a result, it plays an important role in South Africa’s integration into the world economy. The agreement covers around 90 % of current bilateral trade between the two parties.

The agreement provides for the liberalisation of 95% of the EU’s imports from South Africa within 10 years, and 86 % of South Africa’s imports from the EU in 12 years. In order to protect the vulnerable sectors of both parties, certain products are excluded from the FTA and others have been only partially liberalised. For the EU, these are mainly agricultural products, while for South Africa, they are industrial products, in particular certain motor vehicle products and certain textile and clothing products. However, since December 2006, there has been provision for a strengthening of trade liberalisation in the motor vehicle sector.

The agreement sets out detailed rules of origin in order to ensure that products benefiting from the preferential arrangements come only from South Africa or the EU. To take account of modern international production processes, special provisions make the rules of origin more flexible.

South Africa and the EU may implement safeguard measures when an imported product threatens to cause serious injury to the national industry. The agreement also allows South Africa to adopt transitional safeguard measures (for example, an increase or reintroduction of customs duties). In addition, similar measures make it possible to protect the economies of members of the Central African Customs Union and the outermost regions of the EU (such as Reunion).

The agreement includes provisions aimed at avoiding abuse by firms with a dominant position on the market and thus ensuring free competition among the companies from the EU and South Africa. Cooperation takes place within the framework of consultations between the competent authorities. In addition, the EU provides technical assistance to help South Africa restructure its competition laws. The agreement also recognises the need to provide adequate protection for intellectual property and provides for urgent consultations, where necessary, and technical assistance for South Africa.

Lastly, the TDCA provides for close cooperation in a wide range of fields linked to trade, including customs services, the free movement of services and capital, and technical obstacles such as certification and standardisation.

Development cooperation

EU development aid for South Africa is mainly implemented from the EU budget through the financing instrument for development cooperation.

The focus of the multiannual indicative programme for cooperation with South Africa for 2014-2020 is on 3 areas:

• job creation
• education, training and innovation
• building a capable and developmental state.

As with other development cooperation agreements, decentralised cooperation is a key element of assistance, thus requiring a high degree of civil society involvement in the development process.

Economic cooperation

Both parties are stepping up their economic cooperation in many fields such as industry (in order to facilitate the restructuring of South African industry), the information society, the creation and development of small and medium-sized enterprises, transport and energy. Cooperation in this field should also support sustainable development in their economies and protect the environment.

Other aspects

The provisions of the agreement cover cooperation in fields as diverse as:

• social cooperation, based on dialogue covering a number of aspects, such as freedom of association, workers’ rights, children’s rights, gender equality and violence against women;
• cooperation to protect the environment, particularly as regards climate change;
• cultural cooperation;
• cooperation in the fight against drugs and money laundering;
• cooperation in the field of health and, in particular, the fight against AIDS.

Lastly, the TDCA contains some institutional provisions. It creates a Cooperation Council to ensure the smooth operation of the agreement. And it provides for regular contact between the parties; for example, between their parliaments and between the EU’s Economic and Social Committee and its South-African counterpart, the National Economic Development and Labour Council.

FROM WHEN DO THE AGREEMENT AND DECISION APPLY?

Signed on 11 October 1999 in Pretoria, the TDCA entered fully into force on 1 May 2004. However, some provisions which fall within EU competence have been applied since 1 January 2000.

In June 2016, South Africa signed EU - SADC EPA (Economic Partnership Agreement with the Southern African Development Community) together with 5 other southern African countries (Botswana, Lesotho, Mozambique, Namibia, and Swaziland). Once ratified, the EPA will replace the trade rules of the TDCA.

BACKGROUND

The agreement is supplemented by 3 additional agreements: the Science and Technology Agreement, and the Wine and Spirits Agreements. The Fisheries Agreement envisaged under the TDCA has not been concluded. South Africa also has qualified membership of the Cotonou Agreement, which governs the relations between the EU and ACP countries.

For more information, see:

• South Africa and the EU (EEAS).

MAIN DOCUMENTS

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 - Protocol 1 concerning the definition of the concept of ‘originating products’ and methods of administrative cooperation - Protocol 2 on mutual administrative assistance in customs matters - Final Act - Declarations (OJ L 311, 4.12.1999, pp. 3-415)

Successive amendments to the agreement have been incorporated into the original text. This consolidated version is of documentary value only.

Council Decision 2004/441/EC of 26 April 2004 concerning the conclusion of the Trade, Development and Cooperation Agreement between the European Community and its Member States, on the one part, and the Republic of South Africa, on the other part (OJ L 127, 29.4.2004, p. 109)

RELATED DOCUMENTS

Council Regulation (EC) No 2793/1999 of 17 December 1999 on certain procedures for applying the Trade, Development and Cooperation Agreement between the European Community and the Republic of South Africa (OJ L 337, 30.12.1999, pp. 29-33)

See consolidated version.

last update 08.10.2018