EU-SADC EPA: Frustration between EU and SA boils to the surface as trade deadline looms
Engineering News (South Africa) | 29 August 2007
EU-SADC ECONOMIC PARTNERSHIP
Frustration between EU and SA boils to the surface as trade deadline looms
By Terence Creamer
Frustration is mounting in relations between the European Union (EU) and South Africa, in particular, in negotiations for an economic partnership agreement (EPA) between the EU and the so-called Southern African Development Community (SADC) group, comprising Angola, Botswana, Namibia, Lesotho, Tanzania and Mozambique.
The EPA negotiation in Southern Africa is one of six currently being pursued by the EU with African, Caribbean and Pacific (ACP) regions to replace the 2000 preferential market-access deal, known as the Cotonou Agreement. It was agreed earlier this year, after a long delay, that South Africa, which has its own free-trade agreement with the EU, should participate in the EPA talks in the interest of harmonisation.
The Cotonou deal was extended unilaterally by the EU on the basis of a waiver by World Trade Organisation (WTO) members from a prescribed WTO legal framework, which insists on reciprocity. However, that waiver expires at the end of 2007 and is unlikely to be extended.
For this reason, the finalisation of the EPA is seen as urgent before December 31, with delays having the potential to undermine the preferential market access enjoyed by developing countries, although those dubbed ‘least developed’ will continue to enjoy ‘Everything But Arms’ trade preferences.
In the Southern African context, Namibia, Botswana and Swaziland are, therefore, most at risk, given that the other members of the SADC EPA are considered least developed.
In an engagement with the media on Wednesday, the head of political, economic, trade, information and communication sectors of the European Commission’s delegation to South Africa, Jorge Peydro-Aznar, express frustration with South Africa’s unwillingness to even entertain an engagement on the so-called ‘new generation’ trade issues in the current talks.
He said that Namibia, Botswana and Swaziland were showing less intransigence on the matter, but indicated that South Africa’s stance might place strain on the timeframes for concluding a deal.
Peydro-Aznar indicated that the EU was convinced that there was both the capacity and willingness in the region to engage on matters such as trade in services, government procurement and competition in this round and that, while progress on such issues would be positive from an EU perspective, it could be important for further stimulating the regional integration of Southern Africa.
He also expressed dismay that, in the area of ‘trade in goods’, which was specifically threatened by the expiration of the WTO waiver, South Africa was seeking 100% liberalisation from the EU, while looking to reduce is liberalisation commitments.
“We had hoped that through including South Africa into the process their role would be a constructive one and believe they should be meeting us half way. Instead, they appear to be using it as an opportunity to increase their benefits disproportionately,” Peydro-Aznar argues, adding that “if they pull too hard” there is a real risk that it will not be able to meet the looming deadline.
But a trade official at South Africa’s Department of Trade and Industry, who spoke on conditions of anonymity, told Engineering News that it was the EU, rather than South Africa, that had the power to ensure that the deadline was met.
He asserted that the EPA talks should be confined to the urgent matter of ‘trade in goods’ rather than seeking to introduce “second-generation” issues that have not even been fully canvassed and understood at a multilateral level.
He said South Africa was unwilling to make binding legal commitments in areas where the economic ramifications have not been studied and where it felt its still lacked the capacity to engage meaningfully.
“That is not to say that we don’t see the so-called second-generation trade issues as important, but we feel this is not the correct forum to make commitments,” the official said.
He also indicated that South Africa’s and the Southern African Customs Union’s stated trade policy was to enter into deals as a union, as it had done recently with the European Free Trade Area, or Efta, and Mercosur. Further the talks with the US had been progressed as a bloc.
This strategy diverged from the multilevel trade arrangement with the EU - a misalignment that South Africa contends arose when the country was denied access to Lome and Cotonou.
In seeking this convergence, the official argued, the EU should be treating all members of Sacu uniformly, similar to the way Sacu deals with the 27 members of the EU, regardless of size.
The official said that there would be no problem in meeting the December deadline if the EU agreed to confine the process to the issues at hand: take in goods and the tariffs governing that.
Both sides, however, expressed hope that a deal could be forged in time.
At technical meeting was currently under way in Brussels, with senior trade officials set to meet again in mid-September. It is hoped that this round and possible a few others should enable a Ministerial meeting in the coming months to iron out the final areas of difference.
Peydro-Aznar stressed, too, that the EPA process was not, as had been suggested, an attempt to remove preference from ACP countries, but rather a solution that would be compatible with its WTO commitments.
