Thesis (MBA)--Stellenbosch University, 2000. / The Trade, Development and Co-operation Agreement (TDCA) will create competitive
challenges, threats and opportunities, driving out less efficient performers while bolstering
more efficient enterprises and industries. This is in line with the general principles of the
World Trade Organisation (WTO) which promotes the reduction of trade barriers in order to
liberate trade on a global basis. This dynamic process of adjustments will continue
throughout the implementation of the European Union - South Africa Free Trade Agreement
( EU-SA FTA) which is the main component of the TDCA.
The European Union (EU) has historically been Southern Africa's most important trading
partner. The main reason why South Africa entered into a Free Trade Agreement (FTA) with
the EU was to enhance exports to South Africa's largest export market, attract higher levels
of investment from the EU, and gradually expose the South African industry to competition to
ensure that it is restructured to become globally competitive.
Since 1910 South Africa has been part of the Southern African Customs Union (SACU),
which also comprises Botswana, Lesotho, Namibia and Swaziland (BlNS). The EU-SA FTA
will accordingly impact on trade relations between South Africa, the EU and the BLNS
countries. Not only will SACU face increased competition from cheaper EU imports, but
BLNS countries will also face reduced income from the common revenue pool.
South Africa will have to remove a higher level of tariffs from a greater volume of imports
than is the case for the EU. For the BLNS, the relative adjustment effort is even greater.
The BLNS will have to adjust to the elimination of tariffs on 30% of goods currently imported
from the EU, while the TDCA will bring about no improvement in their current terms of access
to the EU market.
The BLNS products currently exported to the EU which are most likely to be affected by the
EU-SA FTA are: clothing (Lesotho), preserved fish and flowers (Namibia), and grapefruit,
processed pineapples, corned fruit and grapes (Swaziland). These products are under threat
from South African products which can, as a result of the FTA, be exported to the EU at
reduced tariffs. BLNS products which could be affected as a result of cheaper EU imports are: grain
(Botswana, Namibia and Lesotho), chicken production (Swaziland), sugar (Swaziland), beef
(Namibia and Botswana), and the small wheat-farming sector in Namibia and Botswana.
The EU-SA FTA is further likely to have a substantial impact on South Africa's exports to the
EU. The total increase in exports as a result of the FTA is estimated between 1.3% and
1.4% of the 1996 value of South Africa's exports to the EU. The main drive will come from
industrial products which are less protected than agricultural products. The South African
government, further, concluded that the negative effects of the direct costs to SACU would
be outweighed, in the long term, by the dynamic and geopolitical benefits of an FTA with the
EU.
The signal that the South African government has given with signing the TDCA with the EU
indicates that the Southern African economy should restructure itself to become
internationally competitive. This is the only way to survive in a global trade arena which is
under WTO principles becoming increasïngly more liberated.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/52029 |
| Date | 12 1900 |
| Creators | Burger, Pieter Francois Theron |
| Contributors | Breytenbach, W., Stellenbosch University. Faculty of Economic & Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | English |
| Type | Thesis |
| Format | 111 p. |
| Rights | Stellenbosch University |
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