TOOLS FOR MARKET ANALYSIS Presented by Jacobus Verster

TOOLS FOR MARKET ANALYSIS Presented by: Jacobus Verster Trade Research Desk

MARKET ANALYSIS PROCESS Market analysis Business contacts Research market characteristics Screen markets 2 Define your product Qualitative analysis Product Map & Country Map Quantitative analysis Trade. Map & Market Access Map

QUANTITATIVE ANALYSIS What are the fastest growing markets? Which countries are supplying to those markets? What is the position of our products in those markets? What are the access conditions for those markets? …Where should future research be focused? 3

QUALITATIVE ANALYSIS What are the market characteristics? What are the packaging and labeling requirements? How should the product be priced? How is the product distributed in the target market? What are the options for promoting the product? 4 …How do my target markets operate and can I compete?

FRESH VEGETABLE OPPORTUNITIES ØA bakkie-trader in Mpumalanga wants to export fresh vegetables to Mozambique. ØWhich fresh vegetable products are experiencing the highest import growth in Mozambique? ØWhich of these product/s have trade potential for the bakkie-trader? 5

WWW. TRADEMAP. ORG 6

MOZAMBIQUE – FRESH VEGETABLE IMPORTS 7

MOZAMBIQUE – VEGETABLE UNIT VALUE 8

MOZAMBIQUE – VEGGIE OPPORTUNITIES 9

FRESH VEGETABLE OPPORTUNITIES ØA bakkie-trader in Mpumalanga wants to know what tariffs he will face at the Mozambique border for peas? ØWhat tariffs does a competitor from another country face? 10

WWW. MACMAP. ORG 11

CITRUS OPPORTUNITIES ØA citrus producer in Mpumalanga investigates the opportunities for citrus exports to Europe? ØWhat citrus products showed the highest growth? ØWhat countries hold the greatest potential? 12 ØWhat tariffs do South Africa face in these countries?

EUROPEAN CITRUS FRUIT IMPORTS 13

EUROPEAN GRAPEFRUIT IMPORTS 14

WWW. MACMAP. ORG 15

MARKET ANALYSIS TOOLS ØQuantitative Tools • www. trademap. org - FREE • www. macmap. org - FREE ØQualitative Tools • www. p-maps. org - FREE • www. intracen. org/countries - FREE ØRegister 16 • mas-admintools. intracen. org/accounts/Registration. aspx

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SADC FREE TRADE ARRANGEMENT BENEFITS & OPPORTUNIES Presented by: Sam Legare Africa Trade Relations Desk

CONTENT • Background • Overview of SADC FTA (SPo. T) • Tariffs and Non-Tariffs Barriers to Trade (NTBs) • Current status of tariff phase down • Specific benefits and opportunities • Market Access Requirements • Contact Details

Background • Africa Desk – Responsible for RSA agriculture trade relations with African countries • The Desk is responsible for agriculture trade negotiations under SACU Agreements and SADC Protocol on Trade • Together with the DTI - Facilitate and monitor the implementation of both SACU and SADC Agreements • The Desk also facilitate the implementation of RSA BNC with various African countries

Overview SADC Protocol on Trade • Regional Free Trade Arrangement between 14 Member States ( Exc – Angola and DRC. ) • Free Trade Agreement = Protocol on Trade signed in 1996 and effected in 2000: • Objective: Liberalize and promote intra-SADC trade. 85% total trade free of tariffs by 2008 • How? Pillars of trade liberalization as provided in the Protocol: - Tariff phase down - Identification and removal of NTBs to Trade - Simple and trade facilitative Rules of Origin

Tariff Phase Down Process • Member States submit a Tariff Phase Down Offer • Offer – Instrument of implementing the Protocol and gazetted on annual basis (Moz & Tanz) • Offers are reciprocal and asymmetric • Products are categorized (A, B, C and E) in terms of duration of tariff reductions • Includes all but not Sugar – Agreement on Trade in Sugar ( 2001) • The offer currently implemented by Mozambique. .

Tariff Phase Down Status Member States % of tariff lines free of Date at which the % was achieved customs duties SACU 99 January 2008 Zambia 95 January 2008 Mozambique 94 January 2008 Tanzania 91 January 2008 Mauritius 86 January 2008 Zimbabwe 86 January 2008 Madagascar 84 January 2008 Malawi 32 July 2007

Removal of NTBs • Any trade barriers other than tariff - Unharmonised quality and standard for products - Export and import licensing or quotas - Unnecessary export and import bans Most commonly affected agricultural products - Meat products (including chicken) - Dairy products and seasonal vegetables • Article 6 of the SPo. T – Elimination of all existing NTBs and refrain from imposing new ones • NTB Identification and Elimination Mechanism recently adopted in July 2008

Benefits & Opportunities (SADC FTA) • The FTA afford RSA products preferential market access into the respective SADC members: • FTA provides for elimination of all forms of trade barriers: - Tariffs ( >85% of total trade is currently free) - NTBs ( Elimination Mechanism already in place) - TBTs ( Common technical regulation framework) • Thus allows RSA products to access closed markets and thus achieving higher rates of economic growth • Powerful tool in fostering regional integration and integration into world economy e. g. EU

Market Access Requirements • Compliance with SADC Rules of Origin: - Ro. O specify conditions for products to confer originating status - Ensure that only originating goods enjoys tariff preferences - Goal - Encourage regional value addition • Compliance with SPS Measures of the trading partner - SPS Agreement adopted - Obligate Member States to accept other’s SPS measures as equivalent to theirs. - Basis for harmonizing Member State’s conflicting SPS measures

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South Africa and European Union FTA Presented by: Lillian Rantho Europe Desk

Content • Background • Overview of the Agreements • Specific benefits and opportunities • MFN Rates vs Preferential Rates • Market Access Requirements • Contact Details 29

Background Ø European Union (EU) is the main trading partner of South Africa – 50% of SA agricultural was exported to EU in 2007 Ø EU consists of 27 Member States - Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, United Kingdom, Romania and Bulgaria Ø South Africa access EU markets through the scheme called Generalized System of Preferences and Trade, Development and Cooperation Agreement Ø Generalized System of Preferences is scheme whereby EU extend unilateral special treatment to developing countries (SA included) Ø TDCA – free trade agreement between South Africa and EU 30

Overview of the TDCA Ø TDCA was signed in 1999 and entered into force in 2000 Ø Liberalization period - Immediate liberalization and transitional liberalization over 10 years by the European Union and 12 years by South Africa Ø 70% of SA agricultural trade duty free after 12 years. Ø EU will liberalise 61% of agricultural imports from SA (72 if partial liberalization quotas are included). Ø Agricultural Safeguard Clause Ø Co-operation in Agriculture Ø TDCA – subject to review no later five years after entry into force 31

Specific benefits and opportunities - liberalization schedule of EU (Annex IV) List 0 Immediate elimination of duties upon implementation (1 January 2000) List 1 Elimination over 3 years in 4 equal steps, reaching zero duty on 1 January 2003 List 2 Elimination over 10 years, in 11 equal steps, reaching zero on 1 January 2010 List 3 Elimination between years 3 and 10, in 8 equal steps, reaching zero on 1 January 2010 List 4 Elimination between years 5 and 10, in 6 equal steps reaching zero on 1 January 2010 List 5 Processed agricultural products - fixed preferences. Consists of industrial and agricultural component List 6 Tariff quotas offering fixed preferences for certain volumes List 7 Reserve list (products considered sensitive) - Excluded from liberalization subject to periodic reviews. List 8 Omission list- Protected EU denominations (products related to Geographical Indications and designation of origin of agricultural products) 32

Specific benefits and opportunities cont’d Lists Some of the agricultural products covered in specific lists: List 1 Onions (HS 0703), Margarine (HS 1517) etc. List 2 Sunflower seed (Hs 1512), Fresh or chilled potatoes (Hs 0701) etc. List 3 Cabbages (Hs 0704), Onions (Hs 0703), Lettuce (Hs 0705) etc. List 4 Grapes, apricots, cherries, wheat, meat of sheep or goats, meat of swine etc. List 5 Processed Agricultural products – buttermilk (HS 0403), chocolate (HS 1806), bread (HS 1905), etc. List 6 Products are subject to tariff quota’s : cheese and curd, cut flowers, canned pears, apricots and peaches, fruit juices and wine 33 List 7 Live bovine (HS 010290), meat of bovine (HS 0201), rice (HS 1006), maize etc. List 8 Cheese and curd, wine of fresh grapes and undenatured ethyl alcohol

Trade flows of top 5 SA agricultural exports to EU 34 Product Code (HS 8) Export values 2006 (R’ million) Description 22042140 Unfortified wine - in containers of 2 litres or less 2, 040. 25 08061000 Fresh grapes 1, 412. 30 08051000 Fresh oranges 781. 07 22042940 Unfortified wine - other than in containers of 2 litres or less 617. 14 08081000 Fresh apples 603. 64

MFN Rates vs Preferential Rates Product code Description MFN duties GSP duties TDCA rates 0805 Citrus fruits 08051020 Fresh sweet oranges 080520 Clementines, Monreales and satsumas, Mandarins and wilkings, Tangerines, Other 070110 Potatoes - seed 0% 16. 00% 12. 50% 3. 50% 4. 50% 0% 0% White and red cabbages 12. 00 % MIN 0. 40 EUR / 100 kg 8. 50% 2. 60% Cabbage lettuce (head lettuce) 12. 00 % MIN 2. 00 EUR / 100 kg/br 8. 50% 2. 60% 070320 Onions and shallots 9. 60 % + 120. 00 EUR / 100 kg 140420 07049010 07051100 35 3. 20% 0% Cotton linters 0% 120720 Cotton seed 0% 120600 Sunflower seeds, whether or not broken 0%

Market Access Requirements Prerequisites to access preferential treatment - Ø Comply with Rules of Origin as stipulated in a Protocol to TDCA to qualify for preferential rates: • The EUR 1 form must accompany each consignment in order to qualify for TDCA preferences. EUR 1 is obtainable from the applicant’s local South African Revenue Services: Customs and Excise offices. Ø Comply with Sanitary and Phytosanitary measures and technical standards at the European Union – Do. A Directorates: Veterinary Services and Plant Health Ø Procedures for the application, administration and allocation of export permits for quotas: details to be covered by Directorate Marketing Ø Full agreement is available online: www. sars. gov. za and follow the links: - Customs and Excise; Trade agreements 36

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SACU-EFTA AGREEMENT Presented by: Xolani Nqaba

Background Ø Association (EFTA): intergovernmental organisations set up for the promotion of free trade and economic integration. Ø The old EFTA grouping of 1960 has undergone several changes and the new EFTA of 1995 as we know it today has a membership of Iceland, Norway, Liechtenstein and Switzerland. Ø EFTA is an important trading partner of SACU. Ø Although EFTA countries are small, they are world leaders in several sectors vital to the global economy. They rank among the countries with the highest GDP per capita in the world. They are developed countries and are major net-importers of agricultural products. 39 Ø In addition to intra-EFTA free trade, EFTA has negotiated free trade agreements with third countries including with SACU.

Overview of the Agreement Ø Free trade negotiations between EFTA and SACU were launched in 2003. The Free Trade Agreement (FTA) was signed in June 2006 and entered into force on 1 May 2008. Ø The agreement will be phased-in over a period of nine years. Ø The Main Agreement consists of seven Chapters with a total of 44 Articles and 8 Annexes. Chapters are as follows: ♦ General Provisions ♦ Trade in Goods ♦ Intellectual Property ♦ Services, Investment, Public Procurement ♦ Economic co-operation and technical assistance 40 ♦ Institutional and Procedural Provisions ♦ Final Provisions

Overview of the Agreement Cont… Trade in Goods Ø Coverage on trade in goods: - Industrial products, Fish and other marine products, Processed agricultural products, and Basic agricultural products. Ø Processed agricultural products are included in the main agreement (as Annex III) which also covers trade in industrial products including fish and other marine products. Ø Trade in basic/primary agricultural products is covered in separate bilateral agreements between individual EFTA countries and SACU. 41 Ø Lists of products for which the partner countries grant concessions to one another are found in the annexes of the agreements.

Specific benefits and opportunities Ø In terms of the main agreement SACU will enjoy immediate duty-free access into EFTA markets for all products covered by this agreement, with the exception of processed agricultural products. SACU shall progressively reduce its customs duties on imports from EFTA (Annexes IV and VII). Ø In terms of the bilateral agricultural agreement with Switzerland, SACU exporters will have a better market access for canned oranges, mandarins and apricots. They will also face duty free access for canned peaches, grapefruit and lemons. Cider apples and apples for distilling will be duty free within the limits of Switzerland’s World Trade Organisation (WTO) market access quota. There are other products that will benefit as well. 42 Ø SACU exporters will face duty free access to Norway for canned fruit: - Pineapples (HS code 2009. 20), Pears (HS 2008. 40), Apricots (HS 2008. 50), Peaches (HS 2008. 50) and Mixtures entirely containing fruits of heading 0803 – 0810. There are other products included in this agreement that will also benefit.

Specific benefits and opportunities Cont… Ø In terms of the SACU-Iceland bilateral agreement, SACU secured duty free access for all canned fruit, fruit juices, wine, grapes, citrus and apples. Ø Parties undertook to achieve further liberalisation through a review clause in all the three bilateral agreements with SACU with the first review taking place no later than three years after the implementation of the agreements. Ø Further reviews are to be determined at the first review. 43

Bilateral trade flows between SA and EFTA States Switzerland Product code Description South Africa’s Exports to Switzerland 2006 (R’ 000) 20 Vegetable, fruit, nut, 2007 (R’ 000) 66 807. 95 84 917. 49 57 549. 37 47 654. 90 76 656. 51 59 671. 94 68 665. 03 57 866. 68 10 901. 13 9 616. 35 etc food preps 22 Beverages, spirits and vinegar 08 Edible fruit, nuts, peel of citrus fruit, melons 02 Meat and edible meat offal 44 07 Edible vegetables and certain roots and

Bilateral trade flows between SA and EFTA States Norway Product code Description South Africa’s exports to Norway 2006 (R’ 000) 08 Edible fruit, nuts, 2007 (R’ 000) 25 140. 97 45 855. 02 22 512. 90 29 179. 19 1 756. 52 3 722. 91 1 857. 08 2 992. 38 1 045. 86 2 563. 89 peel of citrus fruit, melons 22 Beverages, spirits and vinegar 20 Vegetable, fruit, nut, etc food preps 06 Live trees, plants, bulbs, roots, cut flowers etc 45 12 Oil seed, oleagic fruits, grain, seed,

Bilateral trade flows between SA and EFTA States Iceland Product code Description South Africa’s exports to Iceland 2006 (R’ 000) 22 Beverages, spirits 2007 (R’ 000) 6 100. 88 4 713. 35 4 196. 87 4 291. 88 181. 02 2 275. 89 140. 79 154. 54 and vinegar 20 Vegetable, fruit, nut, etc food preps 08 Edible fruit, nuts, peel of citrus fruit, melons 09 Coffee, tea, mate and spices 46

MFN rates vs Preferential rates Switzerland Product code Description MFN SACU rates 07020010 Tomatoes, fresh or chilled 1. 24% Free 07041010 Cabbages, cauliflowers, kohlrabi, kale and 6. 68% Free similar edible brassicas, fresh or chilled 08051000 Citrus fruit, fresh or dried ; Oranges 6. 68% Free 12060031 Sunflower seeds, whether or not broken: 0. 13% Free For human consumption 47

MFN rates vs Preferential rates Cont… Norway Product code Description MFN SACU rates 07011000 Potatoes, fresh or chilled; Seed 53. 92% 45. 70% 07031012 Onions, shallots, garlic, leeks and other 16. 14% 13. 77% 42. 94% 38. 50% 87. 54% 78. 56% alliaceous veges, fresh or chilled: Onions 08051010 Citrus fruit, fresh or dried: Oranges; For feed purpose 12060010 Sunflower seeds, whether or not broken: For feed purpose 48

MFN rates vs Preferential rates Cont… Iceland Product code Description MFN rates SACU rates 070320 Onions, shallots, garlic, leeks and other 30. 00% Free alliaceous veges, fresh or chilled: Garlic 08 Edible fruit and nuts; peel of citrus fruit or 0. 00% Free melons 110812 Products of the milling industry; malt; 0. 00% Free Sugars and sugar confectionery: Cane or 0. 00% Free starches; inulin; wheat gluten: Maize 1701 49 beet sugar and chemically pure sucrose, in solid form

Market Access Requirements/Procedures Compliance with: Ø Rules of Origin (Ro. O) Ø Sanitary and Phytosanitary (SPS) measures, etc The administration of export permits for quotas is handled by Directorate Marketing. 50

Background Ø SACU and EFTA: these are intergovernmental organisations set up for the promotion of free trade and economic integration to the benefit of its member states. Ø The old EFTA grouping of 1960 has undergone several changes and the new EFTA of 1995 as we know it today has a membership of Iceland, Norway, Liechtenstein and Switzerland. Ø Although EFTA countries are small, they are world leaders in several sectors vital to the global economy. They rank among the countries with the highest GDP per capita in the world. They are developed countries and are major net-importers of agricultural products. 51 Ø SACU is an important trading partner of the EFTA States. (how much trade takes place? ) In addition to intra-EFTA free trade, EFTA has negotiated free trade agreements with third countries including with SACU.

ALL ENQUIRIES RELATED TO D: ITR Directorate: International Trade Tel: 012 319 8452 Fax: 012 319 8001 E-mail: info. ditr@nda. gov. za 52

CONTACT DETAILS EUROPE DESK Ms J Letswalo: 012 319 8007, Joyce. Le@nda. agric. za Ms L Rantho: 012 319 8024, Lillian. R@nda. agric. za Mr Xolani Nqaba: 012 394 8020, Xolani. N@nda. agric. za 53

CONTACT DETAILS AFRICA DESK • Tel No : 012 319 8026/7 • Fax No : 012 319 8001 • Email : Sam. Le@nda. agric. za For SACU-EFTA visit: www. sars. gov. za and follow the links: Customs and Excise; Trade Agreements

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