SACU/MERCOSUR Preferential Trade Agreement leads to exponential increase of Sa Exports to Brazil

The South African Foreign Economic Representative in Brazil, Shanaaz Ebrahim says that the ratification of trade agreements between the Southern African Customs Union (SACU) and the Southern Common Market (Mercosur) trade blocs has led to a steady increase of South African exports to Brazil.

Ebrahim said this during the 12th Latin American Defence and Security Exhibition (LAAD) that is currently underway in Rio de Janeiro, Brazil. 

The Department of Trade and Industry (the dti) is hosting a pavilion at LAAD where 21 companies are showcasing South Africa’s industrial capabilities with the eventual intention of securing trade leads and business opportunities.  

Ebrahim said the purpose of the agreement is to integrate the economies of member countries through gradual and reciprocal liberalisation of trade and the strengthening of economic co-operation ties among member countries. She said that South African exports to Brazil for the year 2016/17 rose to USD43 million, and 2017/18 they further increased to USD183 million. 

“According to trade statistics our trade deficit with Brazil has shrunk considerably in 2018. The deficit is now at USD 700 million down from USD1,2 billion in 2017. This is thanks to the fact that we have increased our exports to Brazil by 37% from USD 483 million in 2017 to USD663 million in 2018. Part of this was due to the ratification of the SACU/MERCOSUR preferential trade agreement which was ratified in April 2016 where SACU had offered MERCOSUR tariff line items of about 1065 product lines across 16 sectors of which 469 products are zero percent import duty free. Mercosur reciprocated this agreement by offering SACU 1052 product lines of which 778 products were at zero percent import duty free. This offers us a window of opportunity to penetrate the Brazilian market through these zero percent import duty free products. Negotiations of this agreement started in 2000,” she said. 

In addition, Ebrahim said that both South Africa’s and Brazil’s membership to the BRICS multinational agreements was advantageous to both countries.
 
“This year Brazil will be chairing the 11th BRICS Summit which will be held in November, so there is going to be a series of working groups and meetings during the course of this year and we are looking forward to those agreements and substantive implementables. I would also urge our companies to interrogate and familiarise themselves with the list of zero percent import duty free products as that will orientate them on the viability of their products within the Brazilian market and it would also stand them in best position to draw instant benefits resulting from the SACU/MERCOSUR preferential trade agreement,” said Ebrahim

LAAD is a leading Latin America and Security event that gathers international and national companies that provides technologies, equipment and services for armed forces, special forces, police, homeland security and security managers from large companies, service concessionaires and critical infrastructure.