EU’s ’divisive’ trade deal comes under fire at SADC conference

Business Day | 25 June 2010

EU’s ’divisive’ trade deal comes under fire at SADC conference

Loyiso Langeni

Johannesburg — SOUTHERN African Development Community (Sadc) executive secretary Tomáz Salomão yesterday criticised the European Union (EU) for trying to "impose" a preferential free-trade agreement on countries in the region.

Last year the EU signed an interim economic partnership agreement with Botswana, Lesotho and Swaziland to facilitate the free movement of goods between the two regions.

These countries, together with SA and Namibia, are members of the century-old Southern African Customs Union (Sacu).

No Sacu member is allowed to negotiate a free-trade agreement with other regions without the consent of all the members of the union.

The decision by Botswana, Lesotho and Swaziland resulted in SA threatening to pull out of the customs union, which would have adverse economic consequences for the three countries.

They rely heavily on the Sacu revenue- sharing mechanism, which is heavily subsidised by SA as the most powerful economy in the region.

Mr Salomão said economic partnership agreements with the EU "should be relevant to the needs of the region, if not, this process should not be allowed to exist". He said most Sadc members opposed the agreement as it had the potential to divide the region.

"We are also partly to blame because we failed to negotiate as a bloc with the EU," Mr Salomão said. He was speaking at a conference to discuss ways to improve co-operation and socioeconomic development in the region.

Peter Draper, head of the development through trade programme at the South African Institute of International Affairs, said there were various reasons that the other countries had broken ranks with SA and Namibia in signing the agreement with the EU.

He said the countries feared losing market access to export their goods to Europe, and they wanted to retain trade links with one of the wealthiest regions in the world.

Mr Draper said it would not be in SA’s interest to disband Sacu as this would lead to the "economic collapse" of those countries, leading to more refugees streaming into SA.

"We buy social peace in our neighbours, especially in Lesotho and Swaziland, as they would not be able to survive without the revenue they were receiving through the customs union."

Next week Sacu celebrates its centenary. It is the oldest customs union in the world.

source: Business Day