Exporters are still waiting for clarity on how South Africa’s new trade agreement with China will work in practice, despite the agreement having officially come into effect on May 1.
Speaking at the Cape Port Liaison Forum (PLF), an initiative of the Cape Chamber of Commerce, customs expert Clifford Evans said while the China-Africa Economic Partnership Agreement (CAEPA) had created significant opportunities for South African exporters, several operational aspects remained unresolved.
The China-Africa Economic Partnership Agreement is a new trade framework agreement between China and African countries, including South Africa. A key feature is duty-free access for qualifying South African exports into the Chinese market, along with broader cooperation in areas such as investment, industrial development and trade facilitation.
Evans described the agreement as a non-reciprocal arrangement focused specifically on boosting exports into China. “This is for exports to China. Importing from China, you are not going to see any lowering of tariffs or duties. Goods being exported into China will now get a lower rate of duty, or there will be a quota system in place.”
Under the agreement, qualifying South African exports will benefit from zero customs duties when entering China, subject to compliance with the applicable tariff schedules and rules of origin.
However, Evans said certificates of origin required for exporters to access the preferences were not yet available.
“The problem at the moment is that although the agreement came into effect on the 1st of May, certificates of origin are not yet available because Sars is not up to date,” he said. “The International Trade Administration Commission (ITAC) is still engaging with Sars on the rules of origin and the systems required before the certificates can be issued.”
The Department of Trade, Industry and Competition (DTIC) is also working with Sars on the customs procedures and the necessary legislative changes that need to be implemented, including the issuing of certificates of origin that will be made retrospective to May 1 once available.
In the meantime, importers in China may be required to make provisional duty payments on qualifying South African goods until the documentation process is finalised.
“I know there has been mention that if goods are now landing in China and those certificates of origin have not yet been issued, the importer in China will have to lodge almost like a provisional payment to cover that duty,” he said.
He added that exporters were also still awaiting clarity on whether they would need to formally register under the trade agreement before making use of the preferential arrangements.
“Like any other trade agreement, an importer or exporter who uses that agreement normally needs to register with Sars, but we have not seen any official notice on that as yet,” said Evans.
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