The interim EPA includes a rendezvous clause for the negotiation of other trade-related areas such as rules and commitments on services and investment, sustainable development and competition (known as the «deepening process»). The five countries that are already implementing the agreement have declared their willingness to move beyond trade in goods towards a more comprehensive agreement. Negotiations on deepening the EPA started on 2 October 2019. The interim EPA also covers cooperation on technical barriers to trade and animal and plant health standards. Worldwide, there is duty-free trade between South Africa and the other four countries (Botswana, Lesotho, Namibia and eSwatini) that make up the South African Customs Union (SACU). The Southern African Development Community (SADC) Free Trade Agreement has enabled duty-free trade between 12 of the 15 members since 2012. The EU-South Africa Agreement on Trade and Development Cooperation, which entered into force in 2000, has become the cornerstone of the regional trade landscape as a progressive free trade agreement. South Africa has also negotiated agreements with the European Free Trade Association, the United Kingdom and Mercosur. Through SADC, South Africa concluded negotiations on Phase I of the Tripartite Free Trade Agreement, which links SADC, the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA) into a free trade area. South Africa is also a member of the new African Continental Free Trade Area (AfCFTA). After two years of negotiations, a new agreement, the SACUM-UK EPA, was concluded in September 2019. Essentially, this meant a transfer of the terms of the SADC-EU EPA to the new SACUM-UK EPA. These terms include rules for: As regards the Protocol on Rules of Origin, the EPA Committee decided in January 2020 to amend the term `originating product` in order to facilitate and facilitate trade between the ESA region and the EU.
The amendment, which entered into force in March 2020, allows economic operators, among others, to have greater flexibility while reducing costs. Under the so-called «SADC EPAs», the EU has totally or partially eliminated tariffs on 98.7% of imports from South Africa, while guaranteeing full free access to other signatory countries. Today, the EU remains South Africa`s largest trade and investment partner. The other six members of the Southern African Development Community region – the Democratic Republic of Congo, Madagascar, Malawi, Mauritius, Zambia and Zimbabwe – are negotiating Economic Partnership Agreements with the EU in other regional groups, namely Central Africa or East and South Africa. South Africa is an emerging country. A large part of the population lives in poverty. The EU is by far South Africa`s most important development partner and provides a significant share of funds for external aid. The asymmetrical nature of the Economic Partnership Agreement (EPA) means that African signatories are not obliged to respond with the same level of market opening that the EU offers.
The outcome of these talks will have an impact on the South African economy, particularly trade. The EU, as a regional bloc, is South Africa`s largest trading partner in the world, and South Africa is the EU`s largest trading partner in Africa. South Africa has extensive and long-standing trade relations with the United Kingdom. Before leaving the EU, the UK was South Africa`s second largest trading partner in the EU regional community after Germany. The country is also South Africa`s fourth largest export market, behind China, Germany and the United States. The agreement was the first regional EPA in Africa to be fully operational after Mozambique began implementing the EPA in February 2018. In January 2013, the European Parliament approved the agreement. The agreement remains open to other countries that wish to join it later. As the deadline for post-Brexit trade talks between the European Union (EU) and the United Kingdom (UK) looms, concerns have arisen about whether the two sides will be able to strike a deal. As for the Brexit divorce deal, the UK is expected to leave the EU`s single market and customs union on 1 January 2021.
A trade agreement will govern the future trade relationship between the EU and the UK. However, the prospect of reaching such a deal has been called into question by the recent publication of a controversial new bill by the UK government that aims to override parts of the Brexit withdrawal pact. Following the termination of most bilateral investment treaties with EU countries, South Africa passed an Investment Protection Act in 2015. Established in 2015, the EU Chamber of Commerce and Industry in Southern Africa offers a coherent approach to issues of concern to European companies investing in the region. Six ESA countries – Comoros, Madagascar, Mauritius, Seychelles, Zambia and Zimbabwe – concluded an Interim Economic Partnership Agreement with the EU at the end of 2007. Agreement was also reached on an integrated programme to address in the future interesting areas that could not be resolved during the negotiations. These include market access issues, regional cumulation, export taxes, technical barriers to trade, geographical indications and electronic certification. Until the UK`s decision to leave the EU, it acted with South Africa under an Economic Partnership Agreement (EPA) between the EU and some Southern African Development Community (SADC) member states.
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