The previously announced trade agreement signed between South Africa and the EU concerning automotive products has now come into effect, under which the majority of automotive consignments are now entitled to preferential tariff treatment, providing the consignments meet the product specific rules of origin contained in Protocol 1 of the Trade, Development and Cooperation Agreement between South Africa and the EU and that the consignments are accompanied by certificates of origin form EUR.1 issued by Customs.

The main features of the agreement include the removal of EU customs duties on automotive components, and an incremental decrease in the duties on fully built cars, from the current level of 10% to zero by January, 2008. This will substantially improve South Africa’s market access into the EU25 member states and should encourage further investment in the auto sector.

South Africa will reduce the duties on some components for the after-market—in some instances to zero and in others to a reduced level—whilst the duty on fully built cars and light commercial vehicles will be phased-down to 18% in 2012, compared with the current 25% duty.