Entry into force of the Mercosur-SACU Preferential Trade Agreement

The Preferential Trade Agreement between MERCOSUR and the Southern African Customs Union (SACU) entered into force on April 1, 2016.

The MERCOSUR-SACU Agreement was signed on December 15, 2008 by the MERCOSUR States Parties and on April 3, 2009 by the members of SACU (South Africa, Botswana, Lesotho, Namibia and Swaziland). The Agreement sets out preference margins of 10%, 25%, 50% and 100% on 1,050 tariff lines on both sides.

The productive sectors of MERCOSUR which will benefit from tariff preferences include chemical, textile, steel, plastic, automotive, electronics and capital goods, in addition to agricultural products.

Brazil exports to the South African bloc totaled US$ 1.36 billion in 2015, with a Brazilian trade surplus of about US$ 720 million. The beneficial impact of the Agreement may be felt mainly in the industrial sector, since two thirds of the Brazilian exports to SACU countries (US$ 908 million in 2015) consist of manufactured products.

The entry into force of the Preferential Trade Agreement will contribute to the promotion of trade exchange in the South Atlantic. The MERCOSUR countries are expected to have easier access to a potential market consisting of about 65 million consumers.