Dáil Éireann debate -
Tuesday, 27 Feb 1996

Vol. 462 No. 2

Written Answers. - EU/South Africa Free Trade Area.

Martin Cullen

Question:

51 Mr. Cullen asked the Minister for Tourism and Trade the Government's view of the possible creation of a free trade area between the EU and South Africa; the implications, if any, of such an agreement for Ireland; and if he will make a statement on the matter. [3514/96]

Minister for Tourism and Trade (Mr. E. Kenny)

In June 1995, the General Affairs Council adopted directives for the negotiation of a comprehensive long-term agreement between the European Union and South Africa. With regard to the trade part of the agreement, the directives provided inter alia, for South Africa to be invited to initiate a process leading to progressive and reciprocal liberalisation of trade with a view to establishing a free trade area. If the South African Government was ready to negotiate such an agreement, the EU was to respond favourably on the principle of a free trade area corresponding to the EU's economic and commercial interests.

The General Affairs Council also decided as a general principle that before any steps are taken towards establishing a free trade area, the Commission should assess the compatibility of the planned agreement with WTO rules and the implications of such an agreement for the Union's common policies and for its relations with its main trading partners.

In line with this request, the Commission indicated in a recent assessment of a free trade agreement with South Africa that it was confident that such an agreement would survive any challenge contesting its WTO compatibility, provided the range of excluded products was limited. In reviewing the Union's common policies and particularly the CAP, the Commission recalled that the draft negotiating directives envisage that at the end of the general transitional period of about ten years, 55 per cent of EU agricultural imports from South Africa would be liberalised in the free trade agreement and that certain sensitive products, mainly fruit and vegetables, would be excluded entirely. In relation to the impact of a free trade agreement on third countries, the assessment by the Commission states that the agreement is expected to generate increased demand both in the EU and South Africa and will thereby create net additional export opportunities for such countries. The Commission has also confirmed that more detailed studies would be carried out, as necessary, during the course of negotiations with South Africa, and member states would be kept closely involved in the negotiating process.

As a small country dependent on trade, our strategic interest is in an open trading system where our companies can operate on an even playing field, on the basis of rules which have been agreed multilaterally, but which also caters for the special needs of sensitive sectors like agriculture. Our approach in individual cases is determined following an assessment of the balance of Ireland's trading interests. In the case of South Africa, Ireland has enjoyed a healthy trade surplus for many years. In value terms, few, if any, South African imported commodities into Ireland could be regarded as competing with domestic produce. In agriculture for instance, the principal South African imports to the EU are grapes, oranges, pears, apples, plums and peaches, in which Ireland has negligible production. On the other hand, meat and meat preparations were the second most important export commodity for Ireland in the South African market in 1994. As Ireland's exports to South Africa are generally subject to high access barriers, which inhibit our current export performance, a free trade agreement would see many of these reduced over a transitional period, thereby improving Ireland's future export prospects.

Ireland is therefore supporting the efforts of the current Italian Presidency to achieve a satisfactory EU negotiating mandate which would enable formal negotiations on a liberal trade agreement with South Africa to get under way in the near future. This is regarded as an important EU political priority in support of South Africa's renewal programme.