21 June 2016

South Africa: Western Cape Economic Development On EU Trade Agreement

press release

EU trade agreement to boost Western Cape wine exports

A landmark trade agreement with the European Union will deliver a massive boost to the Western Cape's wine exports.

Alan Winde, Minister of Economic Opportunities, welcomed the Economic Partnership Agreement (EPA) signed between the European Union and six countries of the Southern African Development Community which was signed in Botswana this month.

Last month, Minister Winde met with a delegation from EU in the Western Cape. The EPA was one of the matters discussed during the engagement.

"Under this agreement, the Tariff Rate Quota (TRQ) of South African wine to be imported duty-free into the EU is set to more than double from the current 50 million litres to 110 million litres in the first year of implementation for bulk and bottled wine.

This is also the first time the EU has signed a Free Trade Agreement (FTA) in which the EU gives up the right to use agricultural export subsidies. This is a significant step towards equalling the playing field for our farmers, " said Minister Winde.

In a press statement, Commissioner for Trade Cecilia Malmström, who signed the agreement on behalf of the EU, said while South Africa and the EU had an existing agreement in place, the EPA would enhance market access for South Africa.

"For South Africa the situation is different - given we've had a trade agreement for some time. But the deal is still a big improvement, because it extends the existing market access to new products, like wine, fruit, ethanol, sugar and dairy products. And South African geographical indications such as wines, Karoo meat and Rooibos tea will be protected," said Commissioner Malmström in a statement.

Minister Winde said the development protects the geographical indicators of the province's high-quality products from several regions, including wines from Paarl and Stellenbosch.

"Through Project Khulisa, we identified growing our wine industry as a focus area. It is our goal to increase exports to strategic markets. Our objective is to double wine exports to key destinations by 2025.

"We are adamant to increase exports of our bottled wine. This is in line with Project Khulisa's focus on the value-add through agri-processing. We are seeking to add up to 100 000 jobs to the agri-processing sector by 2019."

Dairy exports will also be impacted by the new agreement and Minister Winde said the Western Cape Department of Agriculture's new residue testing facility would also improve market access.

"Our plan to establish a R9 million residue testing facility at our Helderfontein Veterinary Laboratory is on track and should be operationalised later this year. Once live, this facility will serve as a base for the testing requirements of key destinations to which we can export our products, hopefully improving the value and volume of goods we move overseas."

Minister Winde said increasing the volume of exports would create more jobs in the province.

"The Western Cape produces over 50 per cent of South Africa's agricultural exports. We are supporting agri-business to strengthen their export position by growing exports from their current value added of R16.3 billion.

"Research has found only a five percent increase in the value of deciduous fruit and table grapes exports will create 4 261 and 2 073 new jobs respectively. The same research showed that a five percent increase in wine exports will lead to 986 new jobs, and two thirds of these jobs will be off farm."

Issued by: Western Cape Economic Development and Tourism

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