The EU-SADC EPA establishes rules of origin that must be respected in order to allow products preferential market access. The rules of origin refer to the criteria used to determine the national origin of a product. The agreement provides for remedial measures to combat unfair trade practices. It also contains safeguards to increase import duties in cases where an increase in imports is likely to cause serious harm to the domestic market. SACUM countries are entitled to duty-free and quota-free access to their exports under the EU-SADC EPA. Given the developed nature of its economy, South Africa is treated less well for some of its agricultural, fish and aluminum exports. A new trade provision has been adopted, allowing SACUM states and the UK to purchase and use EU inputs for production in order to export to the other party`s markets. This has ensured the continuity of integrated value chains in South Africa, the EU and the UK, particularly in the automotive industry. The agreement provides for the parties to consider alternatives (constructive corrective measures) before imposing final anti-dumping and countervailing duties.
This gives the companies concerned the opportunity to put options on price, volume and/or the combination of options for businesses instead of facing prohibitive tariffs. The accumulation of rules of origin is an instrument that allows parties to a free trade area to use materials originating in certain other countries, i.e. without violating the rules of origin. The protocol provides for a diagonal (or partial) accumulation between SA and the EU, as well as materials originating from ACP countries. As far as SACU is concerned, it allows a complete accumulation with materials originating from BLNS. The request for negotiations with SA was made as part of the EU`s desire to support SA`s new democracy and to tackle the legacy of the past. The EU argued that a free trade area was the best and only way to enable SA to have better market access. The EU mandate has dampened SA`s high expectations.
However, South Africa has decided to establish and develop a strategic partnership with the EU, which is South Africa`s main trading and investment partner. Respect for democratic principles, fundamental human rights and the rule of law is defined as a key element of the agreement. Good governance is another important principle. Any violation of these principles would lead the other party to take appropriate action, including the revocation of certain concessions. It insisted on the formulation of these provisions, so that the objectivity of the violation of the essential element of the agreement exists, without the risk of unilateral measures or as a determining factor in the balance of economic or political interests. The adopted text contains a better definition of good governance and the circumstances in which the non-enforcement provision can be invoked.