The European Union, in particular the United Kingdom has for a long time been the number one export destination for most fruit exported from South Africa. The ongoing financial crisis has seen demand in that market decline sharply, forcing South African fruit exporters to put more focus on alternative markets such as the Middle East, Far East and Africa.

Exporters are also facing increasingly complex regulatory environments with sanitary and phytosanitary measures in traditional markets becoming more strict. In particular, European chemical residues regulations are becoming so strict that even their own producers would struggle to meet their own standards.

In an interview with the Financial Mail last week, Charles Hughes, the managing director of Tru-Cape Fruit Marketing hit out at government for its inaction in assisting the South African fruit industry gain access to vital overseas markets. Tru-Cape is one of the biggest exporters of deciduous fruit from South Africa.

Thailand has been blocking South African exports of table grapes and apples since 2008, as the South African government failed to timeously provide the Thai authorities with the required phytosanitary information. This has caused the industry to lose exports worth more than R400 million, which has had a negative impact on employment in the industry. Efforts to resolve the Thai ban is still ongoing. Trade Law Chambers advised the industry in this matter.

South African fruit exporters are at risk of losing other important markets due to bureaucratic ineptitude in the South African department of agriculture, forestry &, fisheries (DAFF). Currently they still do not have access to the Chinese market for apples, despite the fact that China has approved the South African production and certification processes. All South Africa's main competitors in the fruit market are already exporting apples to China. According to DAFF, talks with the Chinese government are at an advanced stage but the issue has not yet been resolved. In Indonesia, South African exporters do not have access to the main port of Jakarta, causing them to be less competitive than their competitors that do have such access. India is also requiring exporters to chemically treat their fruit with methyl bromide, which exporters argue violates the World Trade Organization (WTO) Agreement on Sanitary and Phytosanitary measures (SPS Agreement).

While the international trade rules of the WTO recognizes the right of trading nations to protect their citizens' health against unsafe imported products, in reality sanitary and phyto-sanitary measures and technical standards are often abused as protectionist measures to shield local producers from competition from imported products. The SPS Agreement and the Agreement on Technical Barriers to Trade (TBT Agreement) sets out the rules for how countries can make use of SPS measures and technical standards. The main principles found in both these agreements are that any measure applied should not be a disguised restriction on trade and should be the least trade restrictive measure available to obtain the desired objective.

Exporters have to comply with various SPS measures to gain access to a specific market, which can often be a huge cost factor for producers. While the fruit industry spends a lot of time and money to ensure that they can comply with these requirements, cooperation is often also required between the governments of the importing and the exporting countries. This is for instance necessary to ensure that the required protocols are put in place for the recognition of the exporting country's phytosanitary testing and certification processes by the importing country. It seems that the DAFF is currently failing South African exporters in this regard. This is an issue that needs to be urgently addressed by the DAFF, otherwise the industry will have no other choice but to explore the options it has available to force the DAFF to comply with its mandate.

Niel Joubert
© Trade Law Chambers 2012