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Monday, 28 January, 2002, 16:25 GMT
South Africa agrees wine pact
Bottles of wine
A committee will settle disputes over regional wine names
Officials from South Africa and the European Union have signed a trade deal on wine and spirits, after seven years of sometimes difficult negotiations.

The pact, signed at a vineyard near Cape Town, permits South Africa to export an annual quota of 42 million litres of wine to the EU duty free.

What we are looking for is visible black ownership and visible black participation in the production process

Bongiwe Njobe

The duty-free exports will bring in an extra 35m rand (2m; $3m) to South Africa's economy, said Alistair Ruiters, South Africa's director-general of trade and industry.

The deal also creates a framework for the two sides to settle disputes over historic brand names for wines and spirits.

The question of how to settle such disagreements has been a major sticking point for the pact, which was agreed in broad outline two years ago.

Aid for black business

The EU has also pledged a grant of 15m euros (9m; $13m) to encourage more black South Africans into an industry that has traditionally been dominated by whites.

Vineyard in South Africa
The Cape is South Africa's main wine region
"What we are looking for is visible black ownership and visible black participation in the production process," said Bongiwe Njobe, South Africa's director-general of agriculture.

The EU is South Africa's most important overseas wine market, taking 78% of its exports.

Names row

Talks on the trade agreement first got under way in 1994 in acknowledgement of South Africa's first all-race election.

An agreement to create a free-trade area was reached in 1999, but it excluded wines and spirits.

In 1999, South Africa agreed to phase out the use of European traditional names - such as port, sherry, grappa and ouzo - over five years for exports and 12 years in its home market.

But European producers continued to demand a way to settle disputed geographic names, for example Steenberg, which is found in both South Africa and Germany.


The EU can expect a slight increase in its exports of sparkling and high quality wines to South Africa, said Alexandre Tilgenkamp, the European Commission's director of international affairs.

Last year, South Africa exported 114 million litres of wine to the EU.

The final deal permitted South Africa a higher duty-free quota than the 32 million litres a year originally envisaged and set up a joint committee to monitor the accord.

Dr Willem Barnard, chief executive KWV
"We always accepted that Brussels would be negotiating on behalf of European producers"
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