Current Affairs-SADC-EAC-COMESA TFTA q Tripartite launched June 2011

Current Affairs-SADC-EAC-COMESA (TFTA) q Tripartite launched June 2011 in SA with objective to pursue FTA, crossborder infrastructure and regional industrial development. q Infrastructure focused on North-South Corridor with significant progress on upgrading road links, with identified projects for rail, border posts and port development. q Work on industrial development at very initial stages – studies to be commissioned. q FTA negotiations underway. q Negotiating principles agreed: Most important is negotiations will be among those TFTA members without existing preferential arrangements in place (meaning existing arrangements, like the SADC trade protocol, will not be reopened). q SA is developing its market access offers and requests through NEDLAC consultations; this will be basis for the SACU position. q Work is also underway on preparation of legal texts. 1

Current Affairs-SACU-India Preferential Trade Agreement q Both sides have exchanged market access requests (1000 products each way) December 2011. q Assessment now underway to make a market access offer: for SACU will intend to make an offer of around 400 products with various margins of preference (10, 25, 50, 100 percent). q Progress is being made on legal texts (Main Agreement and Safeguards). Dispute settlement text agreed. q Concerns from constituencies include extensive NTBs in the Indian market, and that India’s requests are in sensitive industrial sectors such as clothing. 2

Current Affairs-SADC-EU EPA Negotiations Affairsq Some important progress in EPA negotiations but challenges remain. q At SA-EU Summit in Sept 2011, SA made significant offer by agreeing to negotiate GIs which is of strategic importance to the EU, in exchange for improved access to EU market for SA agricultural products. q EC now indicates GIs are insufficient and it seeks more market access into SACU in sensitive sectors (e. g. meat, dairy) – these are difficult for SACU. q Resolved (in principle) legal provisions regarding Definition of Parties, MFN clause. q Further engagement on export taxes, agricultural safeguards, customs cooperation. q Complex technical work on rules of origin continue. q Growing concern that the EU has unilaterally announced EPA must be in force by Jan 2014 or preferences will lapse. q This places undue pressure on all ACP countries that have not concluded a deal. 3

Current Affairs – Bulk Wine q The issue is that UK retailers – encouraged by the work of a UK government-funded NGO – are encouraging SA wine producers to export wine in bulk so as to reduce the transport carbon footprint. q Very shortsighted and illogical because if this approach is taken to its logical conclusion, all long-distance trade should be discouraged to cut carbon footprint. q Potential impact is: q q q Loss of jobs in bottling plants; Loss of jobs in manufacturers of bottles, labels and bottle closures; Loss of value addition capacity; Loss of brand identity for SA and Potential for opportunistic retailers to apply this approach in other sectors like fruit juice and spirits.

Current Affairs – Bulk Wine q Actual impact is: q More than half of SA certified wine exports now transported in bulk 2011/12 q 200 to 300 jobs lost in bottling plants and 700 jobs at stake in ancillary industries q Way forward: Cabinet approved 10 Actions q q q q q Development of a five-year Industry Growth Strategy; Programme to reduce the environmental costs of producing wine in SA; Consumer awareness Programme on holistic environmental monitoring; In-depth cross-sectoral research and analysis of the wine value-chain; Commissioning of a study on the potential to import whisky from UK in bulk; Programme to develop innovative, sustainable packaging solutions; Initiatives to accelerate export market diversification; Measures to ameliorate possible job losses; Engagement with SARS on whisky imports and communication to UK on the negative socio-economic costs of bulk wine exports; and q Economic Cluster to discuss how SA will respond to protectionist strategies.

Current Affairs-Labelling of Products q The Cabinet has approved that the final notice regarding product labeling from Israel / Palestine should correctly be labeled. q The way forward is that rules or regulations in this regard are being prepared for publication and consultation. q The final notice issued henceforth. q Cabinet also approved the Report and its Recommendation on Copyright Review Commission regarding the Review of the Copyright Act and collecting societies of needle-time royalties. 6