Daily News  :: Southern Africa

Johannesburg � The South African department of trade and industry has released the details of a trade agreement on automotive products between South Africa and the European Union (EU).

The agreement, effective as from Friday, entitles most automotive consignments to preferential tariff treatment.

The EU has agreed to reduce to zero the duties on components, while the duties on fully built up cars would be phased-down from the current level of 10 percent to zero by January 2008.

"This is going to substantially improve South Africa's market access into the 25 member states of the EU and ought to encourage further investment into the auto sector," the DTI said.

In return, South Africa's duty on fully built up cars and light commercial vehicles would be phased-down from the current 25 percent to 18 percent by 2012. An additional three percentage points would be added to the existing five percentage point margin of preference on heavy commercial vehicles, which would bring the duty down to 12 percent from the current 20 percent.

According to the National Association of Automobile Manufactures of South Africa (Naamsa), the exported components collected R23bn ($3.3bn) last year with 68.7 percent of the cash coming from the EU - the largest export destination for SA components.

South Africa's vehicle makers raked in R5bn from the EU markets after 25 000 vehicles were exported to those countries last year.

The shipment accounts for nearly 18 percent of the 139 912 vehicles exported last year. I-Net Bridge