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Country is in a Quandary Over EPAs

Mmegi/The Reporter, Gaborone

Country is in a Quandary Over EPAs

By Kabo Mokgoabone, Palapye

19 November 2007

A Senior Research Fellow at the Botswana Institution of Development Policy Analysis (BIDPA) Dr Joel Sentsho says he hopes current negotiations on the Economic Partnership Agreements (EPAs) will yield something positive for Botswana.

"For the past two weeks, the negotiations have been in Brussels," Sentsho said. "I hope there will be something that will not affect our trade (negatively)."

Botswana and other countries in the African, Caribbean and Pacific (ACP) region are currently locked in intense negotiations with the European Union (EU) over reciprocal trade agreements in line with the World Trade Organisation (WTO) rules.

Under the current negotiations, the EU wants to be able to export to the ACP region under a tariff-free arrangement, while returning the favour to the ACP countries.

According to Sentsho, there are divergent views at the negotiations. For example, while the Southern African Development Community (SADC) region wants to use access to the EU market for sustainable development, poverty eradication and diversification of its economies, the EU has other ideas.

The expert from Botswana’s economic think-tank regards the EU’s insistence on the EPAs as a ploy to reinforce the presence of the European Commission in a strategic market like Africa, thus creating market access for EU firms and giving them a competitive advantage.

However, Sentsho has mixed views on the impact of the EPAs. On one hand, he thinks loss of government revenues through the removal of tariffs is a legitimate concern for SADC countries like Lesotho and Swaziland where over 50 percent of government revenues are made up of tariffs.

On the other hand, he thinks Botswana will be better off with the EPAs because the country’s economy is dependent on diamonds, which are non-tariff charged.

Sentsho says concern over loss of domestic industrialisation also holds water because when EU firms come to the SADC region, local firms will have to "either compete or go under." If they collapse, there will be unemployment and poverty.

But he is concerned that Botswana will lose preferences if the EPAs are not signed by the looming deadline of end of 2007. Unlike South Africa, Botswana, which exports beef to EU, does not have a fallback position by means of a bilateral free trade agreement (TDCA) with the EU. Certain SADC states, among them Angola, Mozambique and Tanzania will rely on an instrument called Everything But Arms (EBA), which accords countries belonging to it least-developed-country (LDC) status.

Sentsho says as things stand, Botswana and Namibia are among ACP countries that will suffer the most from conclusion of the current EPA negotiations.

"Botswana will be forced to compete with (other meat-exporting) countries like Brazil," he said.

The workshop was meant to enable leaders to appreciate the current global economic landscape and to equip trade union leaders with the capacity to debate trade issues proficiently.