EU, SA clinch deal on car tariffs

The European Union and South Africa said on Tuesday they had cleared up the last details in the way of long-planned cuts to tariffs on car exports to each other’s markets.

The plan was previously agreed and EU countries had now backed its details, an EU official said, adding both sides would seek to implement it by December 1.

South Africa will cut the duties it applies on European car imports to 18% by 2012 from 25% now and also reduce duties on components and trucks.

In return, the EU’s executive commission has agreed to phase down the import duty it applies on cars from South Africa to zero in 2008.

South African Foreign Minister Nkosazana Dlamini-Zuma noted her country would be required to open its markets by less than the EU, due to the different levels of development.

“The reduction will be asymmetrical because the EU is more powerful economically than we are,” Dlamini-Zuma said after talks in Brussels with Erkki Tuomioja, the foreign minister of current EU president Finland.

Automotive goods represent more than 20% of EU exports to South Africa.

A senior official from the South African Department of Trade and Industry said delays in implementing the deal struck last year had hampered his country’s car industry.

Iqbal Meer Sharma, deputy director general at the department, said EU duties for South African car imports had risen to 10% earlier this year from 6,5%.

The EU official said the increase was due to South Africa moving out of the bloc’s Generalised System of Preferences, which offers poor countries trade advantages, but the tariff was now returning to 6,5% before being phased out.

The EU and South Africa said on Tuesday they would start negotiations to review their trade and development agreement.

The EU is South Africa’s biggest trade partner.—Reuters

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