SACU-MERCOSUR Agreement to Build on Trade Diversity
The Deputy Director-General of International Trade and Economic Development at the Department of Trade and Industry (the dti), Ms Xolelwa Mlumbi-Peter says the Preferential Trade Agreement (PTA) between the Common Market of the South (MERCOSUR) and the Southern African Customs Union (SACU) is encouraging the diversification of trade as well as the SACU markets. Mlumbi-Peter was speaking at the two-day inaugural Joint Administration Committee (JAC) meeting which started in Kempton Park.
The purpose of the official meeting was to convene the first JAC meeting which is a legal requirement of the SACU-MERCOSUR Agreement to look at the implementation of the agreement since its entry into force on 1 April 2016.
Mlumbi-Peter said the agreement with MERCOSUR is a strategic opportunity that affords the SACU Member States a South-South cooperation advantage with other developing economies and that South Africa as well as the rest of SACU Member States will increase their market penetration in the Americas through this agreement.
“The meeting ensured that we are all moving in harmony as the two regions regarding the legal issues to implement the agreement. We need to ensure that all the administrative and operational processes are cleared in order for traders to be able to take advantage of the new market access opportunities,” she said.
According to Mlumbi-Peter, the other issue that is critical for the two regions was to agree on how to notify the agreement to the WTO and this has been agreed upon in this meeting.
Mlumbi-Peter added that the negotiated MERCOSUR PTA is the first of its kind that SACU negotiated with a region of the South and the aim is to diversify markets as well as enhance bilateral trade between the two regions.
Overall, SACU maintains a trade deficit with MRECOSUR for the last five years where SACU exports remained constant below US$1 billion in 2015. MERCOSUR imports from SACU are diversified between industrial, manufactured and agricultural goods.
SACU’s top five exports to MERCOSUR are vehicles, mineral fuels and oils, miscellaneous chemical products, iron and steel, nuclear reactors, boilers, machinery and mechanical appliances.
Enquiries:
Sidwell Medupe-Departmental Spokesperson
Tel: 012 394 1650
Cell: 079 492 1774
E-mail: MSMedupe@thedti.gov.za
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