Brasília – Five countries in South Africa signed on Friday (03) a preferential trade agreement with the Mercosur. The measure should allow South Africa, Botswana, Lesotho, Namibia and Swaziland, which established the Southern African Customs Union (Sacu), to expand their trade relations with the South American bloc.
The document was signed in Maseru, the capita of Lesotho. The countries of the Mercosur had already adhered to the agreement during the summit of the bloc; in Costa do Sauípe, in December. To be enacted, the agreement must be ratified by the parliaments all the countries in both blocs.
Prior to the formation of a free trade area, a trade preference agreement allows each bloc to elaborate a list of products to have preference and to pay lower Import Tax. The reduction ranges from 10% to 100%, depending on the item.
The Mercosur offered trade preference to 1,052 Sacu products. The countries of Southern Africa offered reduced tariffs to 1,064 types of goods purchased from the Mercosur. The tariff lines benefited South American products in the following areas: agriculture, plastic, chemicals, textile products, tools, ironworks, automotive, electric and electronic and capital goods.
Apart from the tariff preference, the agreement also covers the unification of trade legislation like safeguards, sanitary measures and customs cooperation between both blocs. According to the Brazilian Foreign Office (Itamaraty), the good negotiated represent 17% of exports from Brazil to South Africa and 22% of Brazilian imports from that country.
During the talks, it was agreed that Paraguay and Uruguay would be granted more advantageous market access conditions than the remaining countries in the Mercosur. The objective, according to the Itamaraty, is to benefit the smaller economies of the bloc.
The Gross Domestic Product of the Sacu is US$ 300 billion, of which over 90% (US$ 277 billion) correspond to the economy of South Africa. In 2008, trade exchange between Brazil and the bloc totalled US$ 2.5 billion. Brazilian exports alone totalled US$ 1.78 billion.
This is the third extra-regional trade agreement signed by the Mercosur. The South American bloc had already signed a trade preference agreement with India, in 2004, and a free trade area agreement with Israel in 2007.
*Translated by Mark Ament
