Title
Agreement on Trade, Development and Cooperation between the European Community and its Member States, of the one part, and the Republic of South Africa, of the other part
Preamble
THE KINGDOM OF BELGIUM,
THE KINGDOM OF DENMARK,
THE FEDERAL REPUBLIC OF GERMANY,
THE HELLENIC REPUBLIC,
THE KINGDOM OF SPAIN,
THE FRENCH REPUBLIC,
IRELAND,
THE ITALIAN REPUBLIC,
THE GRAND DUCHY OF LUXEMBOURG,
THE KINGDOM OF THE NETHERLANDS,
THE REPUBLIC OF AUSTRIA,
THE PORTUGUESE REPUBLIC,
THE REPUBLIC OF FINLAND,
THE KINGDOM OF SWEDEN,
THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND,
Contracting Parties to the Treaty establishing THE EUROPEAN COMMUNITY,
hereinafter referred to as the ‘Member States’, and
THE EUROPEAN COMMUNITY, hereinafter referred to as the ‘Community’,
of the one part, and
THE REPUBLIC OF SOUTH AFRICA, hereinafter referred to as ‘South Africa’,
of the other part,
hereinafter referred to as the ‘Parties’,
CONSIDERING the importance of the existing links of friendship and cooperation between the Community, Member States and South Africa and the common values that the Parties share;
CONSIDERING that the Community, Member States and South Africa wish to further strengthen these links and to establish close and lasting relations based on reciprocity, partnership and co-development;
RECOGNISING the historical achievements of the South African people in abolishing the apartheid system and building a new political order based on the rule of law, human rights and democracy;
RECOGNISING the Community's and Member States' political and financial support to this process of political change and transition in South Africa;
RECALLING the firm commitment of the Parties to the principles of the United Nations Charter and to democratic principles and fundamental human rights as laid down in the Universal Declaration on Human Rights;
BEARING IN MIND the Cooperation Agreement between South Africa and the European Community which was signed on 10 October 1994;
RECALLING the wish of the Parties to establish the closest possible relationship between South Africa and the countries of the ACP-EC Lomé Convention as reflected in the signing, on 24 April 1997, of the Protocol governing the accession of South Africa to the fourth ACP-EC Convention of Lomé, as amended by the Agreement signed in Mauritius on 4 November 1995;
TAKING ACCOUNT of the Parties' rights and obligations in terms of their membership of the World Trade Organisation (WTO), the need to contribute to the implementation of the results of the Uruguay Round, and the efforts already made by both parties in this respect;
RECALLING the importance attached by the Parties to the principles and rules which govern international trade and to the need to apply them in a transparent and non-discriminatory manner;
CONFIRMING the Community's and Member States' support and encouragement for the process of trade liberalisation and economic restructuring currently under way in South Africa;
RECOGNISING the efforts by the South African Government to ensure economic and social development for the people of South Africa;
EMPHASISING the importance both the European Union and South Africa place on the successful implementation of the South African reconstruction and development programme;
CONFIRMING the commitment of the Parties to promote regional cooperation and economic integration between the countries of southern Africa, and to encourage the liberalisation of trade between those countries;
BEARING IN MIND the Parties' commitment to ensure that their mutual arrangements do not impede the process of restructuring the Southern African Customs Union (SACU), which links South Africa to four ACP States;
UNDERLINING the importance which the Parties attach to the values and principles set out in the Final Declarations of the International Conference on Population and Development held in Cairo in 1994, of the World Summit for Social Development held in Copenhagen in March 1995 and of the Fourth World Conference on Women held in Beijing in 1995;
REAFFIRMING the commitment of the Parties to economic and social development and the respect for the fundamental rights of workers, notably by promoting the relevant International Labour Organisation (ILO) Conventions covering such topics as the freedom of association, the right to collective bargaining and non-discrimination; the abolition of forced labour and child labour;
RECALLING the importance of opening a regular political dialogue in bilateral and multilateral contexts on issues of common interest,
HAVE AGREED AS FOLLOWS:
Body
Title I. GENERAL OBJECTIVES, PRINCIPLES AND POLITICAL DIALOGUE
Article 1. Objectives
The objectives of this Agreement are:
(a) to provide an appropriate framework for dialogue between the parties, promoting the development of close relations in all areas covered by this Agreement;
(b) to support the efforts made by South Africa to consolidate the economic and social foundations of its transition process;
(c) to promote regional cooperation and economic integration in the southern African region to contribute to its harmonious and sustainable economic and social development;
(d) to promote the expansion and reciprocal liberalisation of mutual trade in goods, services and capital;
(e) to encourage the smooth and gradual integration of South Africa into the world economy;
(f) to promote cooperation between the Community and South Africa within the bounds of their respective powers, in their mutual interest.
Article 2. Essential Element
Respect for democratic principles and fundamental human rights as laid down in the Universal Declaration on Human Rights, as well as for the principles of the rule of law underpins the internal and international policies of the Community and of South Africa and constitutes an essential element of this Agreement.
The Parties also reaffirm their attachment to the principles of good governance.
Article 3. Non-execution
1. If either Party considers that the other has failed to fulfil an obligation under this Agreement, it may take appropriate measures.
2. Before doing so it shall supply the other Party, within 30 days, with all relevant information required for a thorough examination of the situation, with a view to seeking a solution acceptable to the Parties.
3. In circumstances of particular urgency, appropriate measures may be taken without prior consultations. These measures shall be immediately notified to the other Party and shall be a subject of consultations, if the other Party so requests. These consultations shall be convened within 30 days from the notification of the measures. If no satisfactory solution is found, the Party concerned may avail itself of the procedure relating to the settlement of disputes.
4. The Parties agree, for the purpose of the correct interpretation and practical application of this Agreement, that the term 'circumstances of particular urgency' in paragraph 3 means a case of the material breach of the Agreement by one of the Parties. A material breach of the Agreement consists in:
(i) repudiation of the Agreement not sanctioned by the general rules of international law, or
(ii) violation of the essential element of the Agreement, as described in Article 2. 5. The Parties agree that the appropriate measures referred to in paragraph 1 of this Article are those taken in accordance with international law and in the selection of these measures, priority must be given to those which least disturb the functioning of this Agreement.
Article 4. Political Dialogue
1. A regular political dialogue shall be established between the Parties. It shall accompany and help consolidate their cooperation as well as contribute to the establishment of lasting links of solidarity and new forms of cooperation.
2. The political dialogue and cooperation are in particular intended to:
(a) promote greater mutual understanding between the Parties and a greater convergence of views;
(b) enable each party to consider the position and interests of the other;
(c) encourage the support for democracy, the rule of law and the respect of human rights;
(d) promote social justice and help create the necessary conditions to eliminate poverty and all forms of discrimination.
3. The political dialogue shall cover all issues of common interest to the Parties.
4. The political dialogue shall take place whenever necessary, notably:
(a) at ministerial level;
(b) at the level of senior officials representing South Africa, on the one hand, and the Presidency of the Council of the European Union and the Commission of the European Communities, on the other;
(c) taking full advantage of all diplomatic channels, including regular briefings, consultations on the occasion of international meetings and contacts between diplomatic representatives in third countries;
(d) where appropriate, by any other means or at any other levels to be agreed between the Parties which would make a useful contribution to consolidating the dialogue and increasing its effectiveness.
5. In addition to the bilateral political dialogue provided for in the previous paragraphs, the Parties shall take full advantage of, and contribute actively to, the regional political dialogue between the European Union and the countries of Southern Africa, with a view in particular to promoting lasting peace and stability in the region.
The Parties shall also participate in the political dialogue in the larger ACP/EU framework, as foreseen and laid down in relevant ACP/EC Treaties.
Title II. TRADE
Section A. General
Article 5. Free Trade Area
1. The Community and South Africa agree to establish a Free Trade Area (FTA) in accordance with the provisions of this Agreement and in conformity with those of the WTO.
2. The FTA will be established over a transitional period lasting, on the South African side, a maximum of 12 years and, on the Community side, a maximum of 10 years starting from the entry into force of the Agreement.
3. The FTA covers the free movement of goods in all sectors. This Agreement will also cover the liberalisation of trade in services and the free movement of capital.
Article 6. Classification of Goods
On the Community side, the combined nomenclature of goods shall apply to the classification of goods imported from South Africa. On the South African side, the harmonised system shall apply to the classification of goods imported from the Community.
Article 7. Basic Duty
1. For each product, the basic duty to which the successive reductions set out in the Agreement are to be applied shall be that effectively applied on the day of entry into force of the Agreement.
2. The Community and South Africa shall communicate to each other their respective basic duties, in accordance with the standstill and rollback commitment agreed between the Parties, and the agreed derogations to these principles, as set out in Annex I.
3. In cases where the process of tariff dismantlement does not start at the entry into force of the Agreement (notably the products listed in Annex II, lists 3, 4 and 5; Annex III, lists 2, 3, 4 and 6; Annex IV, lists 3, 4, 7 and 8; Annex V; Annex VI, lists 2, 3 and 5; Annex VII) the duty to which successive reductions set out in the Agreement are to be applied shall be either the basic duty referred to in paragraph 1 of this Article, or the duty applied on an erga omnes basis on the starting day of the relevant tariff dismantlement schedule, whichever is the lower.
Article 8. Customs Duties of a Fiscal Nature
The provisions concerning the abolition of customs duties on imports shall also apply to customs duties of a fiscal nature, with the exception of non-discriminatory excise duties levied on both imported and locally-produced goods which are in accordance with the provisions of Article 21.
Article 9. Charges Having an Equivalent Effect to Customs Duties
The Community and South Africa shall abolish in their respective imports any charge having an effect equivalent to customs duties on imports on entry into force of the Agreement.
Section B. Industrial Products
Article 10. Definition
The provisions of this section apply to products originating in the Community and South Africa with the exception of the products covered by the definition of agricultural products under this Agreement.
Article 11. Tariff Elimination by the Community
1. Customs duties applicable on import into the Community of industrial products originating in South Africa other than those listed in Annex II shall be abolished on the entry into force of this Agreement.
2. Customs duties applicable on import into the Community of products originating in South Africa listed in Annex II, list 1 shall be progressively abolished in accordance with the following schedule:
on the date of entry into force of this Agreement each duty shall be reduced to 75 % of the basic duty;
one year after the date of entry into force of this Agreement each duty shall be reduced to 50 % of the basic duty;
two years after the date of entry into force of this Agreement each duty shall be reduced to 25 % of the basic duty;
three years after the date of entry into force of this Agreement the remaining duties shall be abolished.
3. Customs duties applicable on import into the Community of products originating in South Africa listed in Annex II, list 2 shall be progressively abolished in accordance with the following schedule:
on the date of entry into force of this Agreement each duty shall be reduced to 86 % of the basic duty;
one year after the date of entry into force of this Agreement each duty shall be reduced to 72 % of the basic duty;
two years after the date of entry into force of this Agreement each duty shall be reduced to 57 % of the basic duty;
three years after the date of entry into force of this Agreement each duty shall be reduced to 43 % of the basic duty;
four years after the date of entry into force of this Agreement each duty shall be reduced to 28 % of the basic duty;
five years after the date of entry into force of this Agreement each duty shall be reduced to 14 % of the basic duty;
six years after the date of entry into force of this Agreement the remaining duties shall be abolished.
4. Customs duties applicable on import into the Community of products originating in South Africa listed in Annex II, list 3 shall be progressively abolished in accordance with the following schedule:
three years after the date of entry into force of this Agreement each duty shall be reduced to 75 % of the basic duty;
four years after the date of entry into force of this Agreement each duty shall be reduced to 50 % of the basic duty;
five years after the date of entry into force of this Agreement each duty shall be reduced to 25 % of the basic duty;
six years after the date of entry into force of this Agreement the remaining duties shall be abolished.
For a number of products indicated in this list, tariff elimination will start four years after the date of entry into force of this Agreement. Tariff elimination of these products will take place in three equal annual reductions, to be concluded six years after the date of entry into force of the Agreement.
For a certain number of steel products indicated in this list, tariff reduction will be realised on a MFN basis, to arrive at a zero duty in the year 2004.
5. Customs duties applicable on import into the Community of products originating in South Africa listed in Annex II, list 4 shall be abolished within a maximum of 10 years after the date of entry into force of the Agreement.
For motor-car components indicated in this list, the applied tariff will be reduced by 50 % as from the entry into force of the Agreement.
The precise Community basic duties and tariff elimination schedule for the products on this list will be established in the second six months of the year 2000, after both parties have examined the prospects for a further liberalisation of South African imports of automotive products from the Community mentioned in Annex III, lists 5 and 6, in the light of, inter alia, the outcome of the South African motor industry development programme review.
6. Customs duties applicable on import into the Community of products originating in South Africa listed in Annex II, list 5 shall be reviewed in the fifth year of this Agreement in view of a possible elimination of tariffs.
Article 12. Tariff Elimination by South Africa
1. Customs duties applicable on import into South Africa of industrial products originating in the Community other than those listed in Annex III shall be abolished upon the entry into force of this Agreement.
2. Customs duties applicable on import into South Africa of products originating in the Community listed in Annex III, list 1 shall be progressively abolished in accordance with the following schedule:
on the date of entry into force of this Agreement each duty shall be reduced to 75 % of the basic duty;
one year after the date of entry into force of this Agreement each duty shall be reduced to 50 % of the basic duty;
two years after the date of entry into force of this Agreement each duty shall be reduced to 25 % of the basic duty;
three years after the date of entry into force of this Agreement the remaining duties shall be abolished.
3. Customs duties applicable on import into South Africa of products originating in the Community listed in Annex III, list 2 shall be progressively abolished in accordance with the following schedule:
three years after the date of entry into force of this Agreement each duty shall be reduced to 67 % of the basic duty;
four years after the date of entry into force of this Agreement each duty shall be reduced to 33 % of the basic duty;
five years after the date of entry into force of this Agreement the remaining duties shall be abolished.
4. Customs duties applicable on import into South Africa of products originating in the Community listed in Annex III, list 3 shall be progressively abolished in accordance with the following schedule:
three years after the date of entry into force of this Agreement each duty shall be reduced to 90 % of the basic duty;
four years after the date of entry into force of this Agreement each duty shall be reduced to 80 % of the basic duty;
five years after the date of entry into force of this Agreement each duty shall be reduced to 70 % of the basic duty;
six years after the date of entry into force of this Agreement each duty shall be reduced to 60 % of the basic duty;
seven years after the date of entry into force of this Agreement each duty shall be reduced to 50 % of the basic duty;
eight years after the date of entry into force of this Agreement each duty shall be reduced to 40 % of the basic duty;
nine years after the date of entry into force of this Agreement each duty shall be reduced to 30 % of the basic duty;
10 years after the date of entry into force of this Agreement each duty shall be reduced to 20 % of the basic duty;
11 years after the date of entry into force of this Agreement each duty shall be reduced to 10 % of the basic duty;
12 years after the date of entry into force of this Agreement the remaining duties shall be abolished.
5. Customs duties applicable on import into South Africa of products originating in the Community listed in Annex III, list 4 shall be progressively abolished in accordance with the following schedule:
five years after the date of entry into force of this Agreement each duty shall be reduced to 88 % of the basic duty;
six years after the date of entry into force of this Agreement each duty shall be reduced to 75 % of the basic duty;
seven years after the date of entry into force of this Agreement each duty shall be reduced to 63 % of the basic duty;
eight years after the date of entry into force of this Agreement each duty shall be reduced to 50 % of the basic duty;