Namibia in EU grape deadlock

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Namibia in EU grape deadlock

12 September 2009

The Namibian government has refused to sign its Economic Partnership Agreement (EPA) with the EU, leaving grape exporters facing a serious loss of trade preferences or a considerable increase in costs.

The bulk of Namibian crops are exported to the EU. However, growers will need to divert most of their exports elsewhere, as uncertainty is spreading serious concern throughout the table grape industry, from Namibian producers along the supply chain to receivers in Europe.

Despite the offer of an Interim Partnership Agreement (IEPA) by the European Commission to suspend temporarily the existing regime, under which exports are free from quotas or market duty, Namibia refuses to sign the agreement.

Negotiations on the IEPA are continuing between the European Commission and Angola, South Africa and Namibia, which are all citing concerns that they say have not been properly addressed. Botswana, Lesotho and Swaziland have already signed an interim agreement.

Juergen Hoffmann, trade adviser to the Agricultural Trade Forum of Namibia, believes that if Namibia does not sign the interim agreement, the possibility exists that the commission will take away the country’s preferential market access and trade will revert to the stricter Generalised System of Preferences (GSP).

The tariff facing Namibian grape exporters when entering the EU market under GSP is 11.3 per cent – representing a substantial increase in marketing costs to Namibian grape exporters.

Namibia could then lose its preferential market access for grape exports, worth €2 million (£1.75m) annually. Grape exporters are looking at options in channelling fruit to markets other than the EU and considerable volumes of grapes have been approved for export to the US.

South Africa has signed a separate trade deal, the Trade and Development Co-operation Agreement, with the EU. This could have a negative impact on Namibia and also influence an existing agreement among members of the Southern African Customs Union, which counts Botswana, Lesotho, Namibia, South Africa and Swaziland as members.

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