EU agreement begins to prove its worth

Alan Peat
IT IS difficult to assess the impact of the free trade pact with Europe, according to Liz Whitehouse of Liz Whitehouse & Associates, but there are positive indications.
"The SA-European Union (EU) trade and development co-operation agreement has been in operation since January 1 last year," she said, "and trade figures are now available."
But there is no separation of statistics indicating the increases that have been due to the FTA (free trade agreement).
The nearest indicator was the statement from an EU official that growth in SA-EU trade was well above that in Europe's trade with the rest of the world.
The official suggested that the implementation of the agreement - "coupled with favourable trade conditions" - had led to a 35% jump in SA's exports to the EU last year. At the same time, EU exports to SA increased by 20%.
"The free trade agreement is beginning to prove its worth," he said.
A market study by Business Day revealed some of the main players in this growth in SA exports to the EU last year - and estimated their contributions to the upturn.
l Biggest percentage growth was recorded by flat-rolled products of stainless steel - which saw an export boom of 115% (R570-m) compared with 1999. SA producers now supply a third of all these imports into the EU.
l Another big percentage performer was purifying and filtration equipment - with growth of 74% (R1.8-bn), and now supplying 28% of such products to the EU.
l SA agri-exports to Europe last year grew by 7.3% - and now account for about 10% (R9-bn) of total exports to the EU.
l Exports of local wines grew by 23% (about R300-m) last year, with local producers estimated to have a 14% share of the EU market.
l SA fruit juice producers, meantime, increased their exports by 53% - with additional earnings of R50m - while bottled water exports last year grew tenfold, and now comprise 4.4% of this market in Europe.
l Fish product exports are also on the up-and-up, although observers suggest that this product line would still be in demand even without the agreement. These exports rose 20% (R160-m) last year.
l Gold, platinum, coal and diamonds also grew, and are now estimated to represent 46% of SA's exports to the EU.
Also benefiting were the iron and steel producers - with SA ferro alloy producers looking at import duties on certain of their products cut by as much as 25%. The industry reckons that this contributed to last year's 28% increase in exports and its extra earnings of R700-m - with SA producers now supplying some 21% of the overall imports of these specialised products into the EU.