5. MARKET ACCESS
5.1 Tariffs, quotas and the price entry system
Tariffs are either designed to earn government revenue from products being imported or to raise the price of imports so as to render local produce more competitive and protect domestic industries.
from that particular region will attract higher tariffs, or will not be allowed at all. This phenomenon is referred to as tariff-rate quotas (TRQs).
The entry price system, which is used in many northern hemisphere markets, makes use of multiple tariff rates during different periods when domestic producers are trying to sell their produce, and lower the tariffs during their off-season. Alternatively, the tariff rate can be a function of a market price – if the produce enters at a price which is too low (and therefore likely to be too competitive), it qualifies for a higher tariff schedule.
Whilst tariff regulations can be prohibitive and result in inferior market access, it is often the non-tariff barriers that restrict countries like South from successfully entering the large developed markets. Many of these barriers revolve around different types of standards, including sanitary and phytosanitary standards (SPS), food health and safety issues, food labelling and packaging, organic produce certification, quality assurance and other standards and grades. Table 16 presents tariffs applied by the top export markets to fresh grapes originating from South Africa during 2018. The European Union member states that featured in the top-ten list of export destinations for South African fresh grapes include the Netherlands, United Kingdom and Germany. Tariffs for these countries are reported collectively as EU tariffs.
Table 16: Tariffs applied by various export markets to fresh grapes originating from South Africa
COUNTRY HS CODE PRODUCT
DESCRIPTION TRADE
REGIME APPLIED
TARIFFS
TOTAL AD VALOREM EQUIVALENT TARIFF
European Union
0806101005
Fresh table grapes : Of the variety Emperor (Vitis vinifera c.v.), from 1 January to 31 January and from 1 December to 31 December
MFN duties
(Applied) 0.00% 0.00%
0806101091 Fresh table
grapes : Other : Seedless
Preferential tariff
for South Africa 0.00% 0.00%
0806101099 Fresh table
grapes : Other Preferential tariff
for South Africa 0.00% 0.00%
0806109000 Fresh grapes
(excl. table grapes)
Preferential tariff
for South Africa 0.00% 0.00%
Hong Kong 08061000 Grapes, fresh or
dried: Fresh MFN duties
(Applied) 0.00% 0.00%
Malaysia 08061000 Fresh grapes MFN duties
(Applied) 5.00% 5.00%
Russia
0806101000 Fresh grapes:
table grapes
Preferential tariff for GSP
countries 3.75% 3.75%
0806109000 Fresh grapes: Preferential tariff
for GSP 3.75% 3.75%
COUNTRY HS CODE PRODUCT DESCRIPTION
TRADE REGIME
APPLIED TARIFFS
TOTAL AD VALOREM EQUIVALENT TARIFF United Arab
Emirates 08061000 Grapes, fresh or
dried: Fresh MFN duties
(Applied) 0.00% 0.00%
Singapore 08061000 Grapes fresh MFN duties
(Applied) 0.00% 0.00%
Saudi Arabia 08061000 Grapes, fresh or
dried: Fresh General tariff 0.00% 0.00%
Indonesia 0806100000 Grapes, fresh or
dried: Fresh MFN duties
(Applied) 5.00% 5.00%
Norway
08061011
Grapes, fresh or dried: Fresh From 1 August to 28/29 February Table grapes
MFN duties
(Applied) 0.00% 0.00%
08061019
Grapes, fresh or dried: Fresh From 1 August to 28/29 February Other
MFN duties
(Applied) 0.00% 0.00%
08061091
Grapes, fresh or dried: Fresh From 1 March to 31 July Table grapes
MFN duties
(Applied) 0.00% 0.00%
08061099
Grapes, fresh or dried: Fresh From 1 March to 31 July Other
MFN duties
(Applied) 0.00% 0.00%
Taipei,
Chinese 08061000 Fresh grapes General tariff 20.00% 20.00%
Source: Market Access Map, ITC
South Africa had a preferential trading agreement (PTA) with the European Union (EU) known at the Trade, Development and Cooperation Agreement (TDCA). The TDCA provided for the progressive introduction of a Free Trade Area (FTA). The EU is South Africa’s main trading and investment partner. The FTA aimed to ensure better access to the Community market for South Africa and access to the South African market for the EU. The agreement covered around 90% of bilateral trade between the two parties and provided for the liberalisation of 95% of the EU’s imports from South Africa within ten years and 86% of South Africa’s imports from the EU in twelve years. In order to protect the vulnerable sectors of both parties, certain products were excluded from the FTA and others have been partially liberalised. For the EU, these are mainly agricultural products, while for South Africa, they are industrial products. The TDCA has however lapsed and the parties are now negotiating an Economic Partnership Agreement (EPA). In the meantime, tariffs that existed before the lapsing of the agreement are still applicable.
the EFTA market through tariffs as per the agreement between SACU and EFTA. As can be seen in Table 16 South African fresh grapes enter Norway duty-free through MFN duties. It appears that fresh grapes do not form part of the free trade agreement. South African exports of fresh grapes however face of 5% in Indonesia and Malaysia and 20% in the Chinese Taipei.
Table 17 presents tariffs applied by the top export markets to dried grapes originating from South Africa during 2018. The European Union member states that featured in the top-ten list of export destinations for South African fresh grapes include France, Netherlands, United Kingdom, Germany, and Belgium.
Table 17: Tariffs applied by various export markets to dried grapes originating from South Africa
COUNTRY HS CODE PRODUCT
DESCRIPTION TRADE
REGIME APPLIED
TARIFFS
TOTAL AD VALOREM EQUIVALEN T TARIFF
European Union
0806201000 Currants Preferential tariff
for South Africa 0.00% 0.00%
0806203010
Sultanas : In
immediate containers of a net capacity not exceeding|2|kg
Preferential tariff
for South Africa 0.00% 0.00%
0806203090 Sultanas : Other Preferential tariff
for South Africa 0.00% 0.00%
0806209000 Dried grapes (excl.
currants and sultanas) Preferential tariff
for South Africa 0.00% 0.00%
Canada 08062000 Dried grapes MFN duties
(Applied) 10.49$/ton 0.56%
Australia 08062000 Dried grapes MFN duties
(Applied) 5.00% 5.00%
Algeria 08062000 Raisins, secs General tariff 30.00% 30.00%
Switzerland 08062000 Raisins, frais ou secs:
secs MFN duties
(Applied) 0.00% 0.00%
United States of America
08062010 Raisins, made from dried seedless grapes
Preferential tariff for AGOA
countries 0.00% 0.00%
08062020 Raisins, made from other than seedless grapes
Preferential tariff for AGOA
countries 0.00% 0.00%
08062090 Grapes, dried, other than raisins
Preferential tariff for AGOA
countries 0.00% 0.00%
New Zealand 08062000 Dried grapes MFN duties
(Applied) 0.00% 0.00%
Japan 080620000 Grapes, dried Preferential tariff for GSP
countries 0.00% 0.00%
Brazil 08062000 Uvas frescas ou secas
(passas): Secas MFN duties
(Applied) 10.00% 10.00%
COUNTRY HS CODE PRODUCT DESCRIPTION
TRADE REGIME
APPLIED TARIFFS
TOTAL AD VALOREM EQUIVALEN T TARIFF
Malaysia 08062000 Dried grapes MFN duties
(Applied) 0.00% 0.00%
Source: Market Access Map, ITC
Different countries apply different tariffs for fresh and dried table grapes (see Tables 16 and 17). However, South Africa has preferential trading agreements (PTAs) with the EU and EFTA. Furthermore, South Africa has access to the US market under the AGOA which significantly lowers the tariff barriers for South African dried grapes. South African exports of dried grapes face a higher tariff in Algeria (30%) and Brazil (10%).
Australia impose a 5% tariff on dried grapes originating from South Africa.
In reality, the tariffs are likely to be far lower for South Africa when considering the preferential agreements, but at the same time, most tariff structures are particularly complex, with quotas, seasonal tariffs and specific tariffs (an amount per unit rather than a percentage of value) all contributing to many different tariff lines and often higher duties payable than one might have anticipated initially. One must also bear in mind that most tariffs are designated to protect domestic industries, and as such are likely to discriminate against those attempting to compete with the domestic producers of that country.