South African exports to the European Union (EU) are set to become more expensive when proposals to introduce a shipping tax next year are adopted, according to a report by Business Day quoting trade policy analyst Peter Draper.
The 27-member EU is South Africa's biggest trading partner, with annual two-way trade between the regions generating some R400bn (€35.9bn).
The country's free-trade deal with the EU has resulted in tariffs being removed on 98 per cent of South Africa's goods exported to the EU, while, in return, In return, South Africa is expected to do away with tariffs on 86 per cent of EU imports by next year.
According to the Pretoria-based state agency, the South African Maritime Safety Authority, merchandise trade accounts for half of the country's gross domestic product, with 98 per cent of that trade is conducted by sea, Business Day reported.
South Africa is one of 21 countries that are already at loggerheads with the EU on an aviation tax, which becomes effective on 1 January 2012. The tax on all airlines flying through the EU's airspace has been introduced as part of bold measures to reduce carbon emissions.
A 'road map' will be unveiled by the EU at the United Nations (UN) conference on climate change in Durban, with an action plan including the lobbying of UN members to sign a commitment to have a legal agreement on climate change signed by 2015.
'The tax will raise the cost of imports into the EU for all trading partners, but the incidence will depend on how the tax is designed,' Draper explained.
Roeland van de Geer, the EU's envoy to South Africa, said on Friday that shipping and aviation contributed 'significantly' to carbon emissions, which the bloc wanted to limit.
'That is why we are quite persistent that a shipping and aviation tax must be included in any deal that hopes to limit carbon emissions,' he said.
The EU believes a second commitment period on the Kyoto Protocol without a legal clause will be 'useless' and will not assist with measures to limit the damage caused by carbon emissions. South Africa, as the conference host, is pushing for a second commitment period on the protocol.
Water and Environmental Affairs Minister Edna Molewa, the leader of South Africa's delegation, is optimistic that a compromise will be reached to institute plans to curb carbon emissions by the end of the negotiations on 9 December.
The country will also have to address the concerns of BRICS members China and India on measures to mitigate climate change, with both countries reluctant at this stage to adopt ambitious plans on carbon emissions that will limit the undertaking of large-scale industrial projects.
A report released on Friday by the UN Environment Programme said that fast action on short-lived climate forces would not be able to keep global temperatures from rising by less than 2°C by the end of the century, unless governments acted decisively on the principal greenhouse gas, carbon dioxide.
'A package of 16 measures could, if fully implemented across the globe, save close to 2.5m lives a year, avoid crop losses amounting to 32m tonnes annually, and deliver near-term climate protection of about half a degree celsius by 2040,' the report said.
Analysts predict that Africa will be the continent most at risk from climate change in the absence of a global agreement that will force nations to implement policies to keep temperature change at less than 2°C.
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