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SADC scrambles to meet EU trade deadline

Mmegi | 21.5.2013

SADC scrambles to meet EU trade deadline


Trade ministers from SADC member states met in Gaborone yesterday as part of efforts to thrash out a new inclusive Economic Partnership Agreement (EPA) with the European Union ahead of next year’s deadline.

The economies of Botswana and Namibia will be the region’s biggest losers when the European Union (EU) revises a preferential trade scheme on January 1, 2014 as part of its overall efforts to push for full EPA with African, Caribbean and Pacific (ACP) states.

Besides this scheme, the EU, next October, will revoke a six-year old market access directive under which 36 ACP states, including Botswana and other SADC countries, will lose the duty and quota free access to the EU market they are currently enjoying. Yesterday, trade and Industry minister Dorcas Makgato-Malesu said senior officers would update the SADC ministers on the progress being made to meet a June 2013 deadline the region has set itself to conclude the inclusive EPA.

"We will hear progress made to date and we should be able to gauge as to whether it is feasible to conclude the negotiations by June 2013 as we had earlier directed," she said. "(There may perhaps be) a need to come up with another strategy to re-position ourselves towards concluding a deal which ensures that the interests of all member states are taken care of. "For this to be possible there may be need for us to also compromise within our group to ensure that no member is ’left out to dry/die in the cold’.

For Botswana, any loss of preferential access to the EU market would particularly deal a blow to the country’s beef sector, which is presently reliant on lower value exports to the South African market and other regional countries.

While not part of the EU, Norway generally follows the union’s policy moves and has already signalled its intention to remove the preferential access Botswana enjoys for an annual quota of 1,600 tonnes to the Scandinavian country.Historical records suggest that the Norway quota contributes about a tenth of the Botswana Meat CommissionÕs annual revenues, meaning it also underpins activities in the countryÕs beef sector.

Besides beef, the EU is a key market for other Botswana commodities, with non-diamond exports to the region amounting to P1.1 billion in 2011.Observers said the latest meeting is one of several that SADC members will soon hold in an effort to iron out issues standing between the region and a full EPA by June 2013.

Previously, various officials have said these outstanding issues include negotiations on rules of origin, infant industry protection and the contentious Most Favoured Nation (MFN) clause. SADC states are believed to be particularly eager to ensure that the benefits of the MFN, which the EU currently applies to South Africa, are spread across all members under the inclusive EPA to be signed.

The need to fast-track discussions towards the final EPA in June is believed to have anchored yesterday’s meeting. ’The ministers and everyone else involved have stressed the need for confidentiality of these meetings in order to preserve the good faith in which they are being conducted within the region and also with the EU,Ó an insider told Mmegi Business.

"However, the focus is on all states agreeing on the outstanding issues and getting to a point where we can initial the final EPA by June. While at this point it is unlikely that the June deadline will be met due to the complexity of issues involved and the need to gel as a group, all efforts are continuing.’

To comply with World Trade Organisation rules, Botswana and other ACP states have been negotiating reciprocal Economic Partnership Agreements (EPA) with the EU since 2007, a process delayed by numerous political and technical glitches over the years.

The negotiations have also been a complex affair as they extend beyond trade in goods and include trade in services and investment, as well as issues of government procurement, intellectual property rights, competition and sustainable development.It is understood, negotiations on trade in services and investment have been put on hold in order to finalise talks on trade in goods.

 source: Mmegi