Trade Agreements
Trade agreements are agreements between two or more nations on how they will work together to ensure mutual trade benefit. These agreements determine the tariffs, or taxes and duties, that countries impose on imports. Generally, when countries have a trade agreement in place goods move more easily between those countries, and less duty taxes are imposed on the goods. For this reason, it is worth your while to know about, and make use of, the different trade agreements that affect the countries from which you are importing, and to which you are exporting.
Here is a summary of the trade agreements that affect South Africa:
| Countries involved | Benefits | Products involved | Certificate of origin required | |
|---|---|---|---|---|
| Southern African Customs Union (SACU) | • South Africa • Botswana • Lesotho • Namibia • Eswatini | For import and export
Duty-free movement of goods between these countries. | All products | None |
| Southern Africa Development Community (SADC) Free Trade Agreement (FTA) | Between 16 SADC Member States:
• Angola | For import and export
Free trade for 85% of goods. The remaining 15% of goods are on the “sensitive list” and may attract some duty. The goal is to have duty free trade of all products in the future. | 85% of products from a SADC region
Products must adhere to the: | SADC certificate of origin |
| SADC-EU Economic Partnership Agreement (EPA) | Trade and development agreement between SADC member states and EU countries: • Austria • Belgium • Bulgaria • Croatia • Cyprus • Czech Republic • Denmark • Estonia • Finland • France • Germany • Greece • Hungary • Ireland • Italy • Latvia • Lithuania • Luxembourg • Malta • Netherlands • Poland • Portugal • Romania • Slovakia • Slovenia • Spain • Sweden | For import and export
100% free access to the EU market for Botswana, Lesotho, Mozambique, Namibia, and Eswatini (with the exception of arms and munitions); full or partial removal of customs duties on 98.7% of South African imports to the EU; full or partial removal of customs duties on 86% of SACU imports to the EU; and full or partial removal of customs duties on 74% of Mozambican imports to the EU. | Agricultural products (including fish and other marine products) and industrial goods.
Products must adhere to the: | EUR.1 certificate of origin |
| EFTA-SACU Free Trade Agreement (FTA) | SACU and the European Free Trade Association (EFTA) :
• Iceland | For import and export
EFTA countries charge reduced tariffs on SACU products. | Industrial goods (including fish and other marine products) and processed agricultural products. Basic agricultural products are covered by agreements with individual EFTA States.
Products must adhere to the: | EUR.1 certificate of origin |
| Generalised System of Preferences (GSP) | Offered to South Africa as developing country by*:
• Norway *Click on countries to view qualifying commodity codes | Benefit for export only.
Products from the developing countries qualify for preferential market access in the form of lower tariffs (and removal of tariffs in some cases) on two thirds of all product categories. This agreement may fall away in the near future. | Specified industrial and agricultural products. *Click on countries to view qualifying commodity codes and terms of origin. | Form A certificate of origin |
| African Growth and Opportunity Act (AGOA) | Granted by the US to 38 Sub-Saharan African (SSA) countries | Benefit for export only.
Preferential access to the US market through lower tariffs or no tariffs on some products. | Duty-free access to the US market under AGOA’s approximately 6,500 product tariff lines.
Products must adhere to the: | A visa stamp, which is put on the invoice for the particular consignment. |
| MERCOSUR-SACU Preferential Trade Agreement (PTA) | SACU and Mercado Común del Sur (Common Market of the South) – MERCOSUR: • Argentina • Brazil • Paraguay • Uruguay | For import and export.
Tariff reductions on selected goods. | Approximately 1,000 product lines on each side of the border.
Products must adhere to the: | MERCOSUR certificate of origin |
| African Continental Free Trade Agreement (AfCFTA) | The 5 member of SACU and
• Benin *Currently offer preferential duty rates | For import and export.
Tariff reductions on selected goods.
| The long-term goal is to turn the African continent into to a completely free trade zone as more countries ratify the agreement and submit offers of preferential rates.
Products must adhere to the AfCFTA Rules of Origin which is still under draft. In the interim SADC rules apply. | AfCFTA certificate of origin. During the implementaion period SADC certificates are also accepted. |
| SACUM-UK Economic Partnership Agreement (EPA) | SACUM consists of SACU and Mozambique.
The SACUM-UK EPA was negotiated for the sake of continued trade with the United Kingdom post Brexit. | For import and export.
During the implementation period SADC-EU EPA preferential duty rates remain valid. | Agricultural products (including fish and other marine products) and industrial goods.
Products must adhere to the: | EUR.1 certificates of origin apply until SACUM-UK certification is finalised. |
Southern African Customs Union (SACU)
COUNTRIES INVOLVED: South Africa, Botswana, Lesotho, Namibia and Eswatini
BENEFITS: For import and export
Duty-free movement of goods between these countries.
PRODUCTS INVOLVED: All products
CERTIFICATE OF ORIGIN REQUIRED: None
Southern Africa Development Community (SADC) Free Trade Agreement (FTA)
COUNTRIES INVOLVED: 16 SADC Member States of SADC which are:
Angola, Botswana, Comoros, Democratic Republic of Congo, Eswatini, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Tanzania, Zambia and Zimbabwe
BENEFITS: For import and export
Free trade for 85% of goods. The remaining 15% of goods are on the “sensitive list” and may attract some duty. The goal is to have duty free trade of all products in the future.
PRODUCTS INVOLVED: 85% of products from a SADC region. Products must adhere to the SADC Rules of Origin.
CERTIFICATE OF ORIGIN REQUIRED: SADC certificate of origin
SADC-EU Economic Partnership Agreement (EPA)
COUNTRIES INVOLVED: 16 SADC Member States and the countries of the European Union which are
Austria, Belgium, Bulgaria, Croatia, Cyprus, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Czech Republic, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden
BENEFITS: For import and export
100% free access to the EU market for Botswana, Lesotho, Mozambique, Namibia, and Eswatini (with the exception of arms and munitions); full or partial removal of customs duties on 98.7% of South African imports to the EU; full or partial removal of customs duties on 86% of SACU imports to the EU; and full or partial removal of customs duties on 74% of Mozambican imports to the EU.
This EPA implements asymmetric liberalisation, which means that the SADC EPA states do not have to match the EU’s market openness levels, but can instead select to keep tariffs on products that are sensitive to international competition.
PRODUCTS INVOLVED: Agricultural products (including fish and other marine products) and industrial goods. Products must adhere to the SADC-EU EPA Rules of Origin.
CERTIFICATE OF ORIGIN REQUIRED: EUR.1 certificate of origin
EFTA-SACU Free Trade Agreement (FTA)
COUNTRIES INVOLVED: SACU and the European Free Trade Association (EFTA) which are:
Iceland, Liechtenstein, Norway and Switzerland
BENEFITS: For import and export
EFTA countries charge reduced tariffs on SACU products and vice versa
PRODUCTS INVOLVED: Industrial goods (including fish and other marine products) and processed agricultural products. Basic agricultural products are covered by agreements with individual EFTA States. Products must adhere to the EFTA Rules of Origin.
CERTIFICATE OF ORIGIN REQUIRED: EUR.1 certificate of origin
Generalised System of Preferences (GSP)
COUNTRIES INVOLVED:
Offered to South Africa as developing country by* Norway, Russia, Turkey, The USA, Canada and Japan
*Click on countries to view qualifying commodity codes
BENEFITS: For export only.
Products from the developing countries qualify for preferential market access in the form of lower tariffs (and removal of tariffs in some cases) on two thirds of all product categories. This agreement may fall away in the near future.
PRODUCTS INVOLVED: Specified industrial and agricultural products. *Click on countries listed above to view qualifying commodity codes and terms of origin.
CERTIFICATE OF ORIGIN REQUIRED: Form A certificate of origin
African Growth and Opportunity Act (AGOA)
COUNTRIES INVOLVED: Granted by the US to qualifying Sub-Saharan African (SSA) countries. The rules of AGOA are strict, so the list of qualifying countries often change. Refer to the AGOA info website for an updated list of beneficiaries.
BENEFITS: For export only.
Preferential access to the US market through lower tariffs or no tariffs on some products.
PRODUCTS INVOLVED: Duty-free access to the US market under AGOA’s approximately 6,500 product tariff lines. Preferential tariffs are also applicable for textile and apparel articles that are imported directly into the USA from South Africa. Products must adhere to the AGOA Rules of Origin.
CERTIFICATE OF ORIGIN REQUIRED: A visa stamp, which is put on the invoice for the particular consignment. Textiles require an AGOA certificate of origin.
MERCOSUR-SACU Preferential Trade Agreement (PTA)
COUNTRIES INVOLVED: SACU and Mercado Común del Sur (Common Market of the South) – MERCOSUR which consists of:
Argentina, Brazil, Paraguay and Uruguay
BENEFITS: For import and export. Tariff reductions on selected goods.
PRODUCTS INVOLVED: Approximately 1,000 product lines on each side of the border. Products must adhere to the MERCOSUR Rules of Origin.
CERTIFICATE OF ORIGIN REQUIRED: MERCOSUR certificate of origin
African Continental Free Trade Agreement (AfCFTA)
COUNTRIES INVOLVED:
The 5 member of SACU and Benin, Burkina Faso, Burundi, Cabo Verde, Cameroon, Central African Republic, Chad, Congo Republic, Democratic Republic of Congo, Egypt, Equatorial Guinea, Gabon, Ghana, Guinea, Guinea Bissau, Ivory Coast, Kenya, Liberia, Madagascar, Malawi, Mali, Mauritania, Mauritius, Niger, Nigeria, Rwanda, São Tomé and Príncipe, Senegal, Seychelles, Sierra Leone, Sudan, The Gambia, Togo, Uganda, United Republic if Tanzania and Zambia
BENEFITS: For import and export. Tariff reductions on selected goods.
PRODUCTS INVOLVED: The long-term goal is to turn the African continent into to a completely free trade zone as more countries ratify the agreement and submit offers of preferential rates. Products must adhere to the AfCFTA Rules of Origin which is still under draft. In the interim SADC rules apply.
CERTIFICATE OF ORIGIN REQUIRED: AfCFTA certificate of origin. During the implementation period SADC certificates are also accepted.
SACUM-UK Economic Partnership Agreement (EPA)
COUNTRIES INVOLVED:
SACUM consists of SACU and Mozambique. The SACUM-UK EPA was negotiated for the sake of continued trade with the United Kingdom post Brexit.
BENEFITS: For import and export. During the implementation period SADC-EU EPA preferential duty rates remain valid.
PRODUCTS INVOLVED: Agricultural products (including fish and other marine products) and industrial goods. Products must adhere to the SADC-EU EPA Rules of Origin until the SACUM-UK EPA rules are finalised.
CERTIFICATE OF ORIGIN REQUIRED: EUR.1 certificates of origin apply until SACUM-UK certification is finalised.
Exporters: How to use trade agreements
The following checklist outlines how you can make the most of the above mentioned trade agreements as an exporter:
- Check whether you are exporting to a country in one of the above trade agreements.
- Ensure that your goods either originate or are sufficiently processed in South Africa.
- Register at customs for the trade agreement you want to benefit from. Register here.
- Apply here for the necessary certificate of origin. Ensure you do this at least two (2) weeks before your shipment is due to leave.
- Send the certificate to your buyer along with the exported goods. One certificate needs to accompany each export.
Importers: How to use trade agreements
The following checklist outlines how you can make the best use of the above mentioned trade agreements as an importer:
- Check whether you are importing from a country which has a trade agreement with South Africa as listed above.
- Ask your supplier to send you the necessary certificate of origin with your import. This will allow you to pay reduced or zero import duties (depending on the import duty agreed upon and listed in the Tariff Book)
Certificates of origin
A Certificate of Origin (CO) is an international trade document which confirms that the goods in the shipment are obtained, produced, manufactured or processed in a particular country. An item can qualify for a certificate of origin from a specific country if it is either:
- Wholly obtained from that country (i.e. all components and manufacturing originate in that country); or
- Sufficiently processed in that country (i.e. the components may have been imported, but sufficient processing/manufacturing was done to transform or add value to the components so that the final item may be regarded as originating in that country).
For South Africans, the most frequently used certificates of origin are the SADC certificate, the EUR1 certificate, the Form A certificate, and the SACU-MERCOSUR certificate. Please refer to Table 1 for the regions where these certificates are applicable.
Let’s take a closer look at these frequently used certificates of origin:
SADC Certificate of Origin
A SADC Certificate of Origin may be obtained when the components/parts and finished product are fully obtained in a SADC country. In the case where some of the components/materials were imported, a minimum of 35% of the value should have been added in the SADC country during the manufacturing process.
EUR1 and Form A
The Eur1 or Form A certificate may be obtained when the components/parts and the finished product are fully obtained in a qualifying country, and in the case where some of the components/parts were imported, there must be “sufficient processing”.
For Eur1 and Form A, “sufficient processing” means that the components/parts used must change tariff heading during the manufacturing process (i.e. the finished product must fall within a different four figure tariff heading from all of the non-originating parts and materials).
SACU-MERCOSUR Certificate of Origin
A SACU-MERCOSUR certificate may be obtained when the components/parts and the finished product is fully obtained in a MERCOSUR or SACU country. It may also be obtained if the products are obtained in a SACU or MERCOSUR country and incorporate non-originating materials, provided that such materials have undergone ‘sufficient working or processing’ in the originating SACU or MERCOSUR country.
You can obtain more information on the requirements for sufficient working or processing in Appendix II to Annex III of the Preferential Trade Agreement between MERCOSUR and SACU.
The bottom line
Making use of trade agreements may lower the import duty tax rate, or even reduce it to zero. Be sure to have the correct documentation before you import or export. One of the most important documents you will need to make use of these trade agreements is the certificate of origin. To obtain a certificate of origin your product needs to be “wholly obtained” or “sufficiently processed” in the country from which you are applying for the certificate of origin.
To benefit your business, register for the relevant trade agreements and get your certificates of origin today by filling out this form, or calling our offices at 087 550 1038.
About the author
Tracy Venter
Tracy studied at Stellenbosch University and gained her initial experience in imports and exports through working for industry. After starting her own import business, and helping some friends do the same, she realised there was a need for reliable customs registration services. As a result, in 2011, Import Export License was born. Since then thousands of importers and exporters have been helped to obtain their import export licences, permits, specialised customs registrations and connect with Import Export License consultants for advice on importing, exporting, and other customs related matters.
