IN AN effort to protect South Africa’s agricultural sector from European Union (EU) imports, the International Trade Administration (Itac) has published guidelines for safeguard applications.
This is the first time Itac has done so since South Africa concluded its trade development and co-operation agreement (TDCA) with the EU in 1999.
Trade Law Chambers director Rian Geldenhuys said it was expected that applications against the EU would rise, possibly leading to fewer agricultural imports from the bloc or more expensive imports.
There has been much unhappiness about the effect of the trade agreement on the local agricultural sector. But uncertainty about the process for evoking safeguards has resulted in only two such applications since the agreement was implemented, according to experts.
Last month, Itac chief commissioner Siyabulela Tsengiwe said local agro-processing companies were struggling to compete against imports from the EU that entered the local market duty-free because of the trade agreement.
Mr Geldenhuys said the draft guidelines Itac published should be welcomed as it would shorten the time the body took to investigate an application. In addition, applicants would not have to prove a surge in imports as was required under article 24 of the trade agreement or that the EU is dumping agricultural products in South Africa.
They would only need to prove the imports have harmed them.
Mr Geldenhuys said there had been criticism that the TDCA was not a balanced agreement as South Africa "liberalised" more than it should have if compared with the EU.
South Africa has a legal framework which allows for the imposition of safeguard measures, but it has not been of much help to the agricultural industry. This was mainly because the trade agreement set up a different method for the safeguards in respect of agricultural trade between South Africa and the EU.
As there has never been any guidance on how this will work, no one has applied until recently.
According to the draft guidelines published in the Government Gazette on Friday, provisional measures can be implemented immediately if an applicant is able to show there are "exceptional circumstances". The measures would apply pending a final decision.
The TDCA consists of three areas of agreement. It consists of a free trade agreement between the EU and South Africa, development aid as well as economic and social co-operation, among other things.
The publication of the draft guidelines also come at a time when the World Trade Organisation (WTO) slashed its forecast for global trade growth this year to 3.3% from 4.5%.
WTO director-general Pascal Lamy warned that things might be worse than expected this year, especially because of risks from the euro crisis and countries trying to restrict trade further in a desperate attempt to shore up growth. "The threat of protectionism may be greater now than at any time since the start of the crisis — other policies to restore growth have been tried and found wanting."
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