EMSIE FERREIRA, Cape Town | Tuesday
THE South African government and the European Union on Monday signed a long-awaited trade deal on wine and spirits that will allow South Africa to export 42-million litres of wine duty free to the European market annually.
It was the last outstanding component of a free trade agreement between the EU and South Africa signed in October 1999 and was seven years in the making, officials said.
The agreement provides for greater mutual acceptance of each other’s wine-making practices and for measures to deal with conflict of interest if winemakers in both South Africa and Europe were to lay claim to the same name or origin for their produce, said the director of trade and industry in South Africa, Alistair Ruiters.
This adds to an undertaking by South Africa in the main free trade deal to drop the use of the geographic names port, sherry, grappa and ouzo for locally produced versions sold to Europe by 2005, in the Southern African Development Community in 2008, and 2012 domestically.
Ruiters said the quota of 42-million litres of duty free exports would come into effect immediately and would bring R35-million (3,5-million euros, 3-million dollars) into the South African wine industry “in cash” even though local winemakers would not be able to fill the quota this year.
“Access becomes cheaper for South African wines and the drop in price means that we are given a greater market share,” he said at the signing ceremony on the Nederburg wine estate at Paarl, north of Cape Town.
In addition the agreement will provide the white-dominated South African wine industry a EU grant of 15-million euros to increase the participation of black South Africans in winemaking.
The European Commission’s director of international affairs, Alexandre Tilgenkamp — who signed the deal with Ruiters — said EU will export a little more sparkling and high quality wines to South Africa as a result of the agreement.
In the long run, he added, the EU would try to ensure the deal resulted in an overall increase of European wine exports to South Africa, he said.
The European Commission’s director general for agriculture, Silvio Rodriquez said the agreement would not enable European producers to export low quality wines to South Africa.
“The EU has no intention of sending bad products to new markets. There is no question of dumping.”
The union is the biggest supplier of imported wine and spirits to South Africa while 75% of South African wine and spirit exports goes to the 15 EU member countries.
“This agreement opens the market further for South African wines. It is a quid pro quo and in phasing out certain names we are giving much greater access,” the EU ambassador to South Africa, Michael Lake said.
“It’s a done deal, and it creates a new market. The European wine producers have to compete in that new market just as South African wine producers have to.
It’s a hard world out there, it’s very, very competitive, but South African wine is increasing in quality and its finding new openings into the European market,” Lake told SABC radio.
South Africa in 2000 exported 114-million litres of wine to the EU. The figure stood at seven million litres in 1994, when South Africa became a democracy and the industry began to emerge from the isolation of the apartheid era.
Wine was first produced in South Africa in 1659 when it was a Dutch colony. – AFP