On 26 May South Africa’s Deputy Director-General of International Trade and Economic Development at the Department of Trade and Industry (the dti) said that the Preferential Trade Agreement (PTA) between the Common Market of the South (MERCOSUR) and the Southern African Customs Union (SACU) was encouraging the diversification of trade as well as the SACU markets.
The Minister was speaking at the two-day inaugural Joint Administration Committee (JAC) meeting which started in Kempton Park.
The purpose of the official meeting was to convene the first JAC meeting which is a legal requirement of the SACU-MERCOSUR Agreement to look at the implementation of the agreement since its entry into force on 1 April 2016.
The Minister said that the agreement with MERCOSUR was a strategic opportunity that afforded the SACU Member States a South-South cooperation advantage with other developing economies and that South Africa, as well as the rest of SACU Member States, would increase market penetration in the Americas through this agreement.
The Minister added that it was important to ensure that all the administrative and operational processes were cleared in order for traders to be able to take advantage of the new market access opportunities.
According to the Minister, the other issue that was critical for the two regions was to agree on how to notify the agreement to the WTO and this was agreed upon in this meeting.
The Minister added that the negotiated MERCOSUR PTA was the first of its kind that SACU had negotiated with a region of the South and the aim was to diversify markets as well as enhance bilateral trade between the two regions.
Overall, SACU has maintained a trade deficit with MERCOSUR for the last five years where SACU exports remained constant below US$1 billion in 2015. MERCOSUR imports from SACU are diversified between industrial, manufactured and agricultural goods.
SACU’s top five exports to MERCOSUR are vehicles, mineral fuels and oils, miscellaneous chemical products, iron and steel, nuclear reactors, boilers, machinery and mechanical appliances.