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European Union and SADC (PART 2)
Posted by Daniel Makhura on 11 July 2017 9:15 AM SAST
An agreement supporting economic diversification in SADC EPA states
Access to intermediate goods: For an economy to diversify, access to inputs such as fertilisers and seeds, machinery or industrial parts are essential. The EPA reduces the import duties on many of these intermediate goods. This makes it easier for southern African industries to diversify and add more value to their products.
Protection of industry: The EPA contains a clause that let SADC EPA partners protect their infant industries and let them grow longer in isolation from market forces.
Development of regional value chains: Whether a product can or cannot be exported to the EU with a reduced or zero duty rate depends always on its origin. In the SADC EPA, the rules defining the origin are formulated in a way to support development of new value chains in the region. The so called cumulation of origin will allow for example applying discount tariffs on EU border for fruit harvested in one country of the region and then preserved and canned in another. This type of flexible rules of origin will benefit companies in agri-food, fishery and industrial sectors.
