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March 29, 2017 — Leave a comment

The South African Revenue Service (SARS) has seized a Ferrari that was smuggled into the country. The luxury vehicle worth an estimated R13.8m was stored at a warehouse in South Africa since 2014.

In February 2015, however, the vehicle’s owner submitted an export declaration to take the car to the Democratic Republic of Congo through Beitbridge border post. A day later, there was an attempt to have the vehicle returned to South Africa through the same border post.

The vehicle has been detained and a letter of intent has been issued to the owner in terms of the Promotion of Administrative Justice Act No 3 of 2000 to enable them to make representation to SARS.

SA WineWhile commodity prices tanked and unemployment rose during South Africa’s worst ever drought over the last few months, wine making increased.

What’s more, South African wine exports were up a further five percent in 2015 and the industry is expecting even more growth in 2016 as South African wine continues to find new markets around the world.

While almost every farming industry is struggling in South Africa, the wine industry is going through “one of its most exciting phases in history” according to Roland Peens, director of wine retailer Winecellar.co.za.

 

The country is the seventh largest producer of wine in the world and for the 12 months preceding June 2015, wine production was at 959 million liters, with 423 million liters sold for export and 395 million liters sold domestically.

Not only is South Africa producing some fantastic wines, but the struggling rand is actually helping wineries as it offers a lucrative export market. The UK is by far the biggest receiver of South African wines with 109 million liters exported here. Germany is second with 79 million while Sweden, France, Netherlands and Denmark all take between 20 to 25 million litres of South African wine.

Canada (18 million litres), USA (11 million liters), Belgium and China (9 million litres each) and Japan and Switzerland (6 million litres each) make up the other big export markets.
Source: www.thesouthafrican.com

Kenya Cut Flower ExportsKenya’s cut flower exports rose by 11.7 per cent during the first quarter of this year to 136,601 tonnes. This was a remarkable growth for the sector at nine per cent in volumes and 18 per cent in value compared with the same period last year.

“This was a remarkable growth for the industry that has endured many challenges in the recent past. This calls for the government to continue creating a conducive environment for doing business,” said Kenya Flower Council chief executive officer Jane Ngige.

Vegetable exports, however, declined by 3.3 per cent from 16,600 tonnes to 16,1000 tonnes during the period under review. The agriculture, forestry and fishing sector on the other hand, expanded by 4.4 per cent compared with 2.2 per cent last year. This growth was reflected in the increased use of agricultural inputs during the quarter.

According to Kenya National Bureau of Statistics (Knbs), the country’s horticultural sector earned Sh100.8 billion last year, a six per cent growth in comparison with Sh94.7 billion earned in 2013.

This came despite the challenges that the flower industry faced in the last quarter of the year when Kenya started exporting under the European Union’s Generalised Scheme of Preferences (GSP) from October 1 to December 25 last year, following failure in the finalisation of the East African Community-European Union Economic Partnership Agreement (EPA).

Kenya remains one of the top three exporters of cut flowers in the world. The major markets are the EU, America, Australia, Russia, and Japan. Ngige said increased demand for fertilizer, a key input for agriculture sector, was notable as reflected by its import which grew by 18.4 per cent from 224,000 metric tonnes in first quarter 2014 to 265,9000 metric tonnes in the first quarter of this year.

Tea production and coffee sales declined by 27.2 per cent and 8.6 per cent, respectively. The fall in tea production was attributed to inadequate rains and frost that was reported in some tea zones. Source: Customs Today

made_in_south_africa___barcode_and_flag_by_netsrotj-d5cmbq9Export taxes are increasingly becoming a focus of attention in South African trade policy, and the objective of this paper is to review the trade and economic issues associated with these taxes. While they are similar to import tariffs in their effects, export taxes remain very much the ‘poor cousins’ of import tariffs in trade policy circles. While attention is paid to them in many bilateral and regional agreements, the multilateral World Trade Organisation (WTO) has little to say about them other than an awakening to their importance when it comes to negotiating a new member’s accession to the world body.

South Africa currently levies an export tax on unpolished diamonds in an attempt to develop local skills and promote the domestic industry, and it is considering a recent department of trade and industry report that recommends that consideration be given to an export tax on iron ore and steel. South Africa has some of the prerequisite market power in the global iron ore trade but not enough to ensure an outcome entirely beneficial to its export trade. The salutary example of South Africa’s competitor India is discussed, as India recently increased its export tax in this sector to 30% and has seen its global market shares plummet. The more interesting sector for South Africa is the ferrochrome and ferrochrome ore trade, as here South Africa does have significant market shares. South Africa has had about a 45% market share over the last three years in global exports, while China has imported around 70% to 85% of this global trade in recent years. Advocates argue that a tax on chromite ore exports will shift the relative economics back to empower South African producers of processed ferrochrome. This sets the stage for an interesting battle between South Africa and China, and one set against the background of South Africa’s recent admission to the BRICS club. If such an export tax is invoked, South Africa needs to be conscious that it at best provides a window of opportunity for the domestic sector to improve its technological efficiency and that it is not a long or even medium-term solution.

For an in-depth appraisal on export tax in South Africa, please read Ron Sandrey’s report “Export tax in the South African context

Source: Tralac & Author -Ron Sandrey

Zimbabwe-emblem11To curb rampant corruption and smuggling through Zimbabwe’s borders the government is introducing new import and export licences with special security features.

Mike Bimha, Zimbabwean Industry and Commerce Minister says the local industry was being negatively affected by cheap imports into the country, some of which were being smuggled through the country’s borders.

“There are a number of fake import and export permits in the country, which is affecting our industry.As a consequence, my ministry has given a directive that all import and export licenses have to be renewed so that new ones can be issued that have special security features.”

“We are also working on a number of interventions to protect local industry.”

“We are looking at removing duty on raw materials as well as reviewing tariffs and duties with a view to restricting some imports coming into the country.”

“The reviewing of duties is not a once-off exercise but will continue in consultation with local industry.”

“We meet with industry on a regular basis where we discuss tariffs and we make the policy recommendations based on these meetings.

Zimbabwe’s trade deficit is expected to widen this year with statistics showing that the import bill so far this year is now $8,3 billion against exports of $5 billion while imports for last year were $7,6 billion against exports of $4,43 billion. Source: TransportWorldAfrica

WB-South Africa-Export CompetitivenessThe report, South Africa Economic Update 5: Focus on Export Competitiveness, examines the performance of South Africa’s export firms against that of peers in other emerging markets— and analyzes the challenges. It assesses South Africa’s economic prospects in the context of the global economic environment and prospects.

With this Economic Update, we hope to enrich the on-going debate on growing a sector critical for South Africa’s economic growth. As with previous editions, this report is intended not to be prescriptive but to offer evidence-based analysis that will help bring South Africa’s policymakers, researchers, and export stakeholders closer to finding innovative and sustainable ways to grow the sector. The report highlights opportunities for growth, particularly with Sub-Saharan Africa being the largest market for non-mineral exports. It also explores strategic directions that can ignite export growth and help South Africa realize its goals of creating jobs and reducing poverty and inequality.

The report identifies three areas that present opportunities to promote the competitiveness and spur the growth in South Africa’s export sector:

  • Boosting domestic competition would increase efficiency and productivity. By opening local markets to domestic and foreign entry, South Africa would enable new, more productive firms to enter and place downward pressure on high markups. This would lower input costs and tip incentives in favor of exporting by reducing excess returns in domestic markets. Competition would also stimulate investment in innovation and, over time, condition the market to ensure that firms entering competitive global markets have reached the productivity threshold to support their survival and growth.
  • Alleviating infrastructure bottlenecks, especially in power, and removing distortions in access to and pricing of trade logistics in rail, port, and information and communication technologies would reduce overall domestic prices and further enhance competitiveness. It would be especially beneficial for small and medium-size exporters and non-traditional export sectors, which these costs tend to hit harder.
  • Promoting deeper regional integration in goods and services within Africa would generate the right conditions for the emergence of Factory Southern Africa, a regional value chain that could feed into global production networks. South Africa could play a central role in such a chain, leveraging the scale of the regional market, exploiting sources of comparative advantage across Africa to reduce production costs, and providing other countries in the region a  platform for reaching global markets. Progress on all three fronts would help catapult South Africa toward faster-growing exports, allowing it to realize the higher, more inclusive, job-intensive growth articulated in the National Development Plan.

Source: World Bank

yuanZimbabwe’s central bank on Wednesday said it would allow the Chinese yuan, Indian rupee, Japanese yen, and Australian dollar to be added into the basket of multiple currencies to be circulated inside the country.

The decision was unveiled by the monetary statement issued by acting governor of the Reserved Bank of Zimbabwe Charity Dhliwayo.

“We wish to advise exporters and the general transacting public that individuals and corporates can also open accounts denominated in the Australian Dollar (AUD), Chinese Yuan (CYN), Indian Rupee (INR) and Japanese Yen (JPY),” Dhliwayo said.

She said the decision to include the three foreign currencies is made upon the consideration that trade and investment ties between Zimbabwe, China, India, Japan and Australia have grown appreciably in recent years.

Zimbabwe has adopted a multiple currency system since the collapse of its local currency, the Zimbabwean dollar in 2009. The most used currency in the southern African country since then has been the US dollar and South African rand. The Botswana pula and British pound are also among the foreign currencies allowed to circulate.

Zimbabwe’s Finance Minister Patrick Chinamasa said last December during his annual budget statement that the multiple currency system is to stay for foreseeable future.

China is Zimbabwe’s major trading partner. Bilateral trade exceeded 1 billion US dollars for two consecutive years since 2012. While Zimbabwean officials have expressed the intention to add Chinese yuan into the currency basket, no formal agreement has been signed between the central banks of the two countries yet. Source: zimdev.wordpress.com

Ngodwana Mill, situated in the province of Mpumalanga (South Africa). It is a fully integrated kraft mill producing pulp for own consumption as well as newsprint and containerboard. (Sappi)

Ngodwana Mill, situated in the province of Mpumalanga (South Africa) is a fully integrated kraft mill producing pulp for own consumption as well as newsprint and containerboard. (Sappi)

The Sappi group, one of the world’s largest manufacturer of gloss paper, plans to use the port of Maputo, in Mozambique to export to Asian markets a group official told financial news agency Bloomberg. Alex Thiel, who is responsible for the group’s business in Southern Africa, said that in October an agreement was reached with Dubai-based port operator DP World, which together with South African logistics group Grindrod and state company Portos e Caminhos de Ferro de Moçambique, is a partner in Maputo port company Empresa de Desenvolvimento do Porto de Maputo.

The Sappi group, which is also one of the world’s largest producers of dissolving wood pulp, plans to ship 10,000 containers per year via the port of Maputo as it is just 250 kilometres from the group’s factory in the South African province of Mpumalanga.

“We have decided to export via the port of Maputo in order to save money as the second-closet port, in Durban, is 650 kilometres from the factory,” said Thiel.

The Mpumalanga factory, which starting producing dissolving wood pulp at the end of July, has already reached 75 percent of its installed capacity of 210,000 tons per year, and is expected to achieve maximum production in February 2014. The wood pulp will be exported via the port of Maputo to China, India and Indonesia, where it will be used to make thread for the textile industry. Source: http://www.macauhub.com

Inefficiency of road freight transport is one of the primary factors that hamper the economy of sub-Saharan Africa. Long delays experienced at border posts are the single biggest contributor towards the slow average movement of freight. Cross-border operations are complicated by the conflicting security objectives of customs and border authorities versus efficiency objectives of transport operators. It furthermore suffers from illegal practices involving truck drivers and border officials. In theory the efficiency of cross-border operations can be improved based on the availability of more accurate and complete information – the latter will be possible if different stakeholders can exchange data between currently isolated systems.

Cross-border trade basically comprises 3 distinct but interlinked layers –

An information layer – in which various trade documentation (purchase order, invoice), cargo and conveyance information (packing list, manifest), customs and government regulatory data (declaration, permits) are exchanged between various supply chain entities and the customs authority. These primarily attest to the legal ownership, contract of carriage, reporting and compliance with customs and other regulatory authority formalities (export and import), and delivery at destination.

A logistics layer – for the collection, consolidation, sealing and conveyance of physical cargo from point of despatch via at least two customs control points (export and import), to deconsolidation and delivery at point of destination.

A financial layer – which refers to the monetary exchange flow from buyer (importer) to seller (exporter) according to the terms and conditions of the sale (INCOTERMS). Hmm… no, this does not include ‘bribe’ money.

All three layers are inter-linked and prone to risk at any point of a given transaction. There is also no silver bullet solution to secure supply chains. Moreover, it is a fallacy that Customs and Border Agencies will ever conquer cross-border crime – simply because there are too many angles to monitor. Furthermore, in order to set up cross—border information exchange and joint enforcement operations it is both legally and politically time-consuming. Criminal elements are not hampered by these ‘institutions’, they simply spot the gaps and forge ahead.

One of the areas requiring customs attention is that of chain of custody. In short this implies the formal adoption of the World Customs Organisation’s SAFE Framework principles. Each party with data that needs to be filed with the government for Customs and security screening purposes has responsibilities. Those responsibilities include –

  • Protecting the physical goods from tampering, theft, and damage.
  • Providing appropriate information to government authorities in a timely and accurate manner for security screening purposes.
  • Protecting the information related to the goods from tampering and unauthorized access. This responsibility applies equally to times before, during and after having custody of the goods.

Tenacent RFID Tag

Tenacent RFID Tag

Security seals are an integral part of the chain of custody. The proper grade and application of the security seal is addressed below. Security seals should be inspected by the receiving party at each change of custody for a cargo-laden container. Inspecting a seal requires visual check for signs of tampering, comparison of the seal’s identification number with the cargo documentation, and noting the inspection in the appropriate documentation. More recently the emergence of certain e-seals and container security devices (CSDs) contribute even further to minimizing the amount of ‘physical’ verification required, as they are able to electronically notify the owner of the goods or government authority in the event of an incidence of tampering.

White Paper - GPS-RFID systems for cross-border management of freight consignments

White Paper – GPS-RFID systems for cross-border management of freight consignments

A group of South African specialist engineers have been working closely with transport authorities, logistics specialists, defense experts and customs authorities across the globe. Their e-seal is patented in no less than 16 high volume countries. It is produced in Singapore, China and Indonesia depending on politics, free-trade agreements and demand. May move some to Brazil and US in time. Proof of concept (POC) initiatives are currently underway in Brazil for rail cargo, US Marine Corps for their p-RFID program and other Department of Defense divisions in the USA, and will shortly be included in one of the GSA agreements making it available to any government department in the US. Further adrift, the e-seal is also currently enjoying interest in Guatemala, Mexico, Canada, Panama, Jordan, Italy, Spain, and Malaysia. Here, in South Africa, a POC was conducted at the 1st autogate at Durban Container Terminal, funded by the North West University, and overseen with successfully achieved objectives by Transnet Port Terminals. For technical details of the RFID seal, click here!

With much anticipated success abroad, how much support will this product attain in the local and sub-Saharan African scene? Government authorities, as well as logistics and supply chain operators are therefore encouraged to study the enclosed ‘white paper’ – Click Here!. It firstly quantifies the size of the problem and estimates the potential economic benefits that will be created by improved cross-border operations. It then proposes a combined GPS/RFID system that can provide the required level of visibility to support improved operational management, resulting in a simultaneous increase in the security and efficiency of cross-border freight operations. A brief cost-benefits analysis is performed to show that the expected benefits from such a system will by far exceed the costs of implementation. Source: Tenacent & iPico

services_import_SnapseedActually, this is a view from the Ukraine. In modern practice, the organisation of the transport process often necessitates direct international multimodal transportation, in which case the freight forwarder carries out the contract of carriage as a multimodal transport operator, even if it does not directly own any vehicles. However, a trend has arisen in which the functions of the carrier and forwarder are combined. Under this model, traditional carriers diversify their activities by creating a forwarding unit within their companies, or forwarding agents acquire vehicles or create dependent carriers. Furthermore, forwarders often hire subcontractors to undertake the shipment; as a result, cases of loss or shortage of goods and claims against forwarding agents can become quite complicated. 

General provisions

Ukrainian legislation does not provide detailed rules governing freight-forwarding activities. The Law on Freight-Forwarding Activities, the Civil Code and the Economic Code stipulate only the general regulations of freight forwarding.

In accordance with Clause 1 of the Law on Freight Forwarding Activities, the contract of freight forwarding is a contract in which the freight forwarder agrees, at the client’s behest, to perform or arrange for the performance of certain contract work related to the transportation of goods. The forwarding agent is entitled to engage other parties for the execution of certain work under the contract (eg, transportation, storage, loading and unloading).

The law includes only general provisions under which the freight forwarder may be held liable to the customer (unless provided otherwise in the contract) for:

  • the number of packages;
  • the weight of the packages (if the weighing was conducted in the presence of the carrier and confirmed with its signature); and
  • packaging requirements under the related shipping documents (signed by a representative of the carrier).

Issues regarding the forwarder’s liability are also governed by the general provisions of the Civil Code, which provides for liability for breach of obligations under the contract. Thus, Article 623 of the code provides that a debtor in breach of its obligations must compensate the creditor for losses caused.

Where the freight forwarder engages third parties to fulfil its obligations under the contract of freight forwarding, the forwarding agent will be held fully responsible for the actions and omissions of the third parties.

Ukrainian law lacks specific rules that directly limit the freight forwarder’s liability to the client. Detailed rules governing the forwarding agent’s liability to the customer, as well as grounds and limitations of such liability, are fixed by the parties in the contract of freight forwarding.

At the same time, Ukrainian legislation contains general rules that allow for the release of the freight forwarder from liability. In accordance with Clause 614 of the Civil Code, a party that has violated its obligations will be held responsible only if found guilty (intently or negligently), unless otherwise agreed in the contract. Disputes in connection with claims against freight forwarders for loss of cargo in transit are common in Ukraine, so there is ample case law in the area. However, since Ukrainian legislation provides only general provisions on the freight forwarder’s liability, court practice for such disputes is often ambiguous and contradictory. In particular, there have been separate cases with similar circumstances in which the court variously found the freight forwarder both liable and not liable for cargo loss in transit. Continue Reading…

WTO-SPS-Measures-Presentation-Transcript-23698Cabinet approved South Africa’s ratification of the Sanitary and Phytosanitary (SPS) Annex to the Southern African Development Community‘s (SADC) Protocol on Trade and for this to be submitted to Parliament.

Agriculture is one of the key sectors in the SADC region due to the sector having the highest potential for growth in terms of export. SADC realises, however, that the sector can only grow significantly if producers are able to access markets for agricultural products. To facilitate market access and promote intra Africa trade it is critical that border trade policies, including SPS measures be harmonised in line with international standards and guidelines in the interest of improving the movement of goods and services in the region. (Read in more red tape)

The SADC Protocol on Trade to which SA has acceded, serves to promote regional cooperation and integration amongst member states for trade in goods and services within the region, including agricultural products.

Article 16 of the Protocol encourages member states to base their Sanitary and Phytosanitary (SPS) measures on international standards, guidelines and recommendations so as to harmonise SPS measures for plant health, animal health and food safety.

To give effect to the provisions of Article 16 of the Protocol, an SPS annex to the SADC Protocol on Trade was drafted and consequently adopted by the SADC Committee of Ministers of Trade (CMT), in July 2008.  Annex VIII to the SADC Protocol on Trade concerning SPS measures represents an enabling regional strategy to promote cooperation in SADC with regards to issues of food safety, plant health and animal health.

In addition, most SADC member states are also signatory members to the World Trade Organisation‘s Agreement on Sanitary and Phytosanitary measures (WTO-SPS) which places obligations on member states to ensure that the SPS measures they implement are least restrictive to trade, while being scientifically justifiable for the protection of human, animal or plant life and health.

The ratification and implementation of the SPS Annex will therefore facilitate improved mechanisms and institutional arrangements in conformity with obligations under the WTO-SPS agreement so as to minimise SPS related issues that impact the trade of agricultural and services trade within the region. Source: SA Government

Want to understand more on the WTO Agreement on Sanitary and Phytosanitary MeasuresClick here!

 

Headquarters of the Rwanda Revenue Authority

Headquarters of the Rwanda Revenue Authority

Thirteen companies, three of them Rwandan, last week signed a Memorandum of understanding with Rwanda Revenue Authority to be accorded preferential treatment when clearing their goods at customs. The Authorized Economic Operator (AEO) is a regional trade facilitation program recommended by the world customs organization to ease trade and customs clearance for tax compliant and prominent importers and exporters.

Delay in clearing goods at customs is one of the major impediments to smooth trading within the East African Community (EAC). It also contributes to making the EAC region one of the most expensive places to do business despite being the second most growing economy in the world. The AEO creates some kind of obstacle-free zone where traders in the import or export business, known to be complaint with customs requirements, are accorded special treatment to ease the process of clearing their goods while in transit.

The pilot project will see how the system works in reality and the beneficiaries have all been informed of their rights and which ports or borders to claim them from. Rwanda customs officials issue special identifiers to the beneficiaries to help them identify the benefiting traders once their goods appear at any of the designated custom points. These identifiers will be recognizable everywhere in the five partner states of the EAC where the beneficiaries will pass and claim their privileges as AEO.

The growth of global trade and increasing security threats to the international movement of goods have forced customs administrations to shift their focus more and more to securing the international trade flow and away from the traditional task of collecting customs duties.

Recognizing these developments, the World Customs Organization (WCO) drafted the WCO Framework of Standards to Secure and Facilitate global trade (SAFE). In the framework, several standards are included that can assist customs administrations in meeting these new challenges and developing an Authorized Economic Operator programme is a core part of SAFE. Source: AllAfrica.com

Trade policy - a balancing actThe Federal Government of Nigeria is set to change its trade policy from the present Free on Board (FOB) to Cost, Insurance and Freight (CIF) which most countries across the world use because of its economic benefits, before the end of the year. FOB makes it mandatory for the buyer to determine who ships and insures the goods to his port of destination while the CIF ensures that the seller determines who ships and who insures the goods brought from him. Presently, goods bought from Nigeria are on FOB basis while Nigerian trade with other nations is on a CIF basis.

Disclosing the position of the federal government to Vanguard in Houston, Texas at the ongoing Offshore Technology Conference (OTC), Leke Oyewole, Special Adviser to President Goodluck Jonathan, said work has been completed on the document for a change in policy so as to help indigenous operators. (?)

The Economic Management Team (EMT) is to take a final look at the policy before returning it to the President for it to be signed into law.

Asked whether the policy would be reversed before the end of the year, the Special Adviser to the President said, ” I am hopeful, am very hopeful, but you also know that if today the President signs the policy into law, Nigerians would not begin by tomorrow. We need to give time sufficient enough for Nigerians to acquire vessels to begin to carry.”

He noted that the country presently “operates on FOB, in which case, as soon as we put cargo onboard the ship, foreign funds are released to Nigeria. When we go on CIF, it will mean waiting until delivery of cargo, before the money will come into Nigeria. There will be a gap, that gap most not be too wide otherwise it will hamper the national funding because we get most of our revenue from these products (petroleum products). Source: Vanguard, Lagos.

EACThe EAC business community has been asked to take advantage of the Authorized Economic Operator (AEO) scheme that seeks to cut down costs of doing business in the East African member states.

The AEO programme, launched in Dar es Salaam on Wednesday, is an entity involving importers, clearing agents, transport companies authorized to import and move cargo within the EAC region with minimal inspections and other customs interventions at checkpoints.

The Permanent Secretary in the Ministry of East African Cooperation Dr Stergomena Tax, launching the World Customs Organisation (WCO)-AEO pilot programme said, “The AEO status can provide companies with significant competitive advantages in terms of supply chain certainty and reduced import costs and finally to the final consumer.”

Apart from reduced transport costs, Dr Tax said the programme would also pull down storage charges because of minimal customs border inspections as well as few checkpoints or road blocks for transit goods.

The Swedish Ambassador to Tanzania Mr Lennarth Hjelmåker said the AEO scheme is a broader compliance strategy to reward compliant traders with simplification benefits which are concrete and predictable.

“Regional integration and cooperation are factors which are important for development, including creation of favourable conditions under which private sector can operate and provide for economic growth with focus on sustainability,” he said.

Sweden, through the Swedish International Development Cooperation (SIDA), has been supporting the work carried out by the WCO-EAC-AEO programme since 2008. Speaking on behalf of the Tanzania Revenue Authority (TRA) Commissioner General Mr Saleh Mshoro, the revenues body’s Finance Director said efficiency and effectiveness of customs procedures can significantly boost the nation’s economic competitiveness.

The launching of AEO programme marks the beginning of a journey between the region’s revenues authorities and the business communities in facilitating smooth and win win trading activities. Source: Tanzania Daily News

South African rooibos (Afrikaans for red bush) is caffeine-free, high in anti-oxidants and minerals, and traditionally grown in the Cederberg region, 250 kilometres to the north of Cape Town. Credit: John Fraser/IPS

South African rooibos (Afrikaans for red bush) is caffeine-free, high in anti-oxidants and minerals, and traditionally grown in the Cederberg region, 250 kilometres to the north of Cape Town. Credit: John Fraser/IPS

A trademark system which is used to protect Europe’s finest wines, cheeses and hams could soon brew up benefits for a humble tea from a remote region of South Africa.

The trade protection system called Geographic Indications (GIs), which is highly favoured by the eurocrats of Brussels, could be used to protect a South African red tea, locally known as rooibos (Afrikaans for red bush) as French firm Compagnie de Trucy is trying to secure the exclusive rights to market it in France.

GIs are increasingly important in the global trade arena, although it is wrong to think they offer enormous bulk trade opportunities. This form of food copyright already applies widely to specialty products, which can be linked to a specific region – such as French champagne, Parma ham and many types of cheese.

They (GIs) open-up niche markets for increased value add products, which taken together can total something significant. In addition, they involve cutting-edge frontiers in trade that largely rely on intellectual property rights for value, and are also linked to trade issues regarding brands and logos.

South African rooibos is caffeine-free, high in anti-oxidants and minerals, and traditionally grown in the Cederberg region, 250 kilometres to the north of Cape Town. It is growing in popularity worldwide due to its healthy properties, which helps to explain Compagnie de Trucy’s move to obtain marketing rights.

The issue has been elevated to diplomatic level between the European Union and South Africa at a time when both parties hope to finally conclude negotiations on updating their wide-ranging trade framework, after more than a decade of discussion. The GI system has enabled EU countries to clinch niche markets for brands such as champagne, which have enormous growth potential on a global basis.

While China as a country is South Africa’s biggest trading partner, the EU as a bloc is more important in value terms, and there are powerful arguments that both sides should expand GIs in their future relations. Soekie Snyman, the spokeswoman for the South African Rooibos Council, which represents rooibos producers, told IPS that the red tea needed to receive official trademark status in South Africa itself before it could qualify as a GI.

Rooibos, Aspalathus linearis (N.L.Burm.) R.Dah...

Rooibos, Aspalathus linearis (N.L.Burm.) R.Dahlgr., Clanwilliam, Western Cape, South Africa (Photo credit: Wikipedia)

The EU supports the protection of indigenous crops, with one of the main requirements being that the product must be protected in its country of origin, and we are nearly ready to file for trademark protection in South Africa. Rooibos is a unique plant, coming from the Cederberg mountain area. It is a caffeine-free beverage.

The EU ambassador in Pretoria, Roeland van de Geer, confirmed in a news release in March that he received a request from South Africa’s Minister of Trade and Industry Rob Davies “for the protection of South African food product names as Geographic Indications in the EU.

As well as rooibos, there have been requests for Honeybush, which is another type of tea, and for lamb from the Karoo desert region. The development of a GI system for South African farmers will reinforce the uniqueness and quality of South African products. South African wine makers have used the GI system for many years and have found it an effective way to protect famous names like Paarl and Stellenbosch.

There is a range of other South African products that might also be eligible for GI protection, such as ostrich and springbok meat, and the marula fruit from which the Amarula liquor is made. Meanwhile, the same criteria could apply to produce from other countries of the Southern African region – such as Mozambican prawns, Botswana beef and Namibian oysters. Source: AllAfrica.com