SACU EFTA FREE TRADE AREA The European Union

SACU – EFTA FREE TRADE AREA

The European Union • A customs union, like SACU • Principle of the “acquis de communataire” • EU enlargements: * 1973 * 1981 * 1986 * 1995 * 2004 * 2007 (foreseen for Bulgaria and Romania)

EU 15 1957 1973 1986 1995 Belgium Denmark Greece Spain Austria France Portugal Finland Ireland Germany UK Italy Luxemb. Netherl. 1981 Sweden

EU Enlargement 2004 • • • Cyprus Czech Republic Estonia Hungary Latvia • • • Lithuania Malta Poland Slovenia Slovakia

European Free Trade Association • • • Iceland, Norway, Switzerland, Liechtenstein Not a customs union Closely integrated with the EU Trails the EU in relation to 3 rd countries But does not have the common policies and pooling of resources as the EU has

POLITICAL ECONOMY • SA trade policy vis-à-vis Europe * Harmonisation on the back of the TDCA * Single trading regime: SADC-EU • SACU – EFTA * Built SACU’s common policies * Would inform the review of the TDCA

ECONOMIC RATIONALE • • Contractual versus unilateral access GSP versus FTA Small but wealthy markets Clothing and textiles stand to benefit

SCOPE OF MAIN AGREEMENT • Trade in goods * Tariff liberalisation * Subject to rules of origin • New generation issues * Only cooporative provisions * Rendez-vous clause

CONTENT OF MAIN AGREEMENT EFTA offer SACU offer Fish & marine Processed agriculture Industrial Duty free on 01/01/07 Certain lines back loaded Equivalence with access enjoyed by EU Almost similar to access enjoyed by EU Duty free and quota free on 01/01/07 Almost similar to EU access

Liberalisation schedules List 0 List 1 List 2 List 3 List 4 List 5 List 6 EU 2000 -2003 -2005 2003 -2012 2005 -2012 Partial, in 7 th year of implementation Reserved list EFTA 2003 2006 -2008 2006 -2015 2008 -2015 Partial liberalisation in 4 th year of imple. Reserved list

ADMINISTRATION • Single SACU origin

State of play • All 9 parties committed to ratify before end of November • If that is achieved, agreement to enter into force on 01/01/07