Trade Agreements In Focus As Us Tariffs Bite

Companies looking for new export markets to replace lost American sales may find opportunities through the trade agreements in place with the European Union EU and the United Kingdom UK. The oldest is the Trade, Development and Cooperation Agreement TDCA, which was signed in 1999. The EU liberalised 95 of duties on South African products by 2010, and South Africa liberalised 86 of duties on EU products by 2012. The agreement covered five areas of cooperation: political dialogue, development, trade and trade-related areas, economic and cooperation in other areas. In October 2016, it was replaced by the SADC- EU Economic Partnership Agreement EPA. Under this EPA, about 98 of South African goods enter the EU tariff-free, including key exports such as wine, citrus and automotive components. In return, South Africa offers partial liberalisation, with some sensitive sectors protected. Since 2016, EU-South Africa trade has increased by 29, according to the European Commission, with SA gaining the most. EU imports from SA rose by 44 between 2016 and 2024, and EU exports to SA by 18. South Africa is the EUs biggest trading partner in sub-Saharan Africa, with 49 billion R1 trillion total trade in goods in 2024. SAs primary exports to the EU are machinery and transport equipment, fuels and mining products, and precious metals and articles. Leading the pack at 22 of overall trade is the automotive sector, which exported vehicles and components worth 10bn R206bn in 2024. EU exports to South Africa are dominated by machinery and appliances, transport equipment, and chemicals and allied industries. Almost half of SAs foreign direct investment originates in the EU. The agreement received a boost during the 8th South Africa-EU Summit held in Cape Town in March. European Commission president Ursula von der Leyen announced a 4.7bn R96bn EU Global Gateway Investment Package to support mutually beneficial investments through grants and public and private loans. The focus areas are just energy transition, strengthening the connectivity infrastructure, and improving South Africas vaccine production capacity. Energy transition is supported by the Clean Trade and Investment Partnership CTIP, which focuses on strategic sectors such as clean technology, raw materials eg, green hydrogen, and sustainable supply chains. Following Brexit, a separate agreement is now in place between the United Kingdom and the Southern African Customs Union member states. The SACUM-UK EPA, signed in 2021, provides SA exporters with enhanced access for wines and sugar in the UK market compared to the SADC-EU EPA, according to the Directorate of International Trade Promotions. ER