Abstract
M.Comm. (Economics)
The objective of this dissertation was to examine the effects of the European Union on the external trade relations of South Africa during the period of the lifting of sanctions, 1988 current. The rules for trade with third countries like South Africa, are formulated by the Council of Ministers. The Commission of the European Communities is primarily responsible for implementing the rules and regulations approved by the Council. Recent developments in the Union, such as the completion of the single market programme, had a profound effect on the Union's trade with third countries. South Africa is no longer in a position to negotiate with the individual member states of the Union, but must deal with the institutions of the European Union like the Commission, the Council and the European Court. In 1994 the member states of the European Union and the five member states of the European Free Trade Area formed the European Economic Area with a population of more than 385 million. The European Union has several preferential trade arrangements with developed and developing countries. It provides different degrees of preferences to various groups of developing countries. The depth and breadth of these preferences are not necessarily
related to the level of development of the recipient country. A hierarchy of preferences can be distinguished, the so-called pyramid of preferences. The most important of these arrangements, and at the top of the hierarchy, is the agreement with the 70 African, Caribbean and Pacific countries (ACP countries), the Lome Convention. The Union abides by the most favoured nation rule of the newly formed World Trade
Organisation. Its preferential trade arrangements are within the rules of the World Trade Organisation. South Africa's future arrangements with the Union will have to be formulated within the rules and regulations of the World Trade Organisation. South
Africa, as a developed country, was included in the Union's generalised system of preferences (GSP) since September 1994. There are several possibilities for South Africa to negotiate a preferential trade agreement with the Union. It is possible for
South Africa to obtain qualified membership of the Lome Convention. The ACP countries have agreed to South Africa's qualified membership of the Convention at the Joint Assembly between the ACP countries and the Union in Gabon in 1994. At this stage it is not clear what South Africa's qualified membership of the Convention will entail. It is expected that South Africa will be excluded from the trade preferences under
the Lome Convention. If this is the case, South Africa can negotiate a bilateral agreement to include those aspects that are excluded from its qualified membership of Lome. Almost 77 per cent of South Africa's exports in 1992 entered the Union duty
free. In 1993 nearly 80 per cent of South Africa's imports came from
the northern member states of the Union, Germany, the United
Kingdom, Belgium, Denmark, the Netherlands, Ireland and
Luxembourg, while only 20 ver cent came from the southern member
states, France, Italy, Spain, Portugal and Greece.