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Namibia: Beef deadline looms

New Era (Windhoek)

February 15, 2007

Beef Deadline Looms

By Mbatjiua Ngavirue

The deadline is looming for the day when the preferential treatment that Namibia has enjoyed for its beef, lamb and table grape exports to the European Union ends on January 1 2008.

The preferential treatment Namibia has benefited from under the Lomé Convention since independence has meant the EU has in some cases granted the country up to 98% tariff rebates on export, Namibia paying as little as 2% in some cases.

These preferences however became illegal under World Trade Organisation (WTO) rules, which do not allow granting preferences to certain countries and not to others.

Since 2000, Namibia has continued to benefit from the preferences through a special waiver granted by the WTO to allow for an adjustment period to the new realities.

The EU and the African, Caribbean and Pacific (ACP) countries however agreed in 2000 to replace the non-reciprocal Lomé Convention with the Cotonou Agreement - a free trade agreement based on reciprocity.

A key provision of the trade chapter of the Cotonou agreement was that the parties would phase out all trade preferences by December 31, 2007.

The abrupt end to these concessions could have catastrophic consequences for the Namibian agricultural sector.

Unless the parties negotiate an alternative agreement, it could mean Namibia’s agricultural exports will become subject to prohibitive EU tariffs.

Under the Cotonou Agreement, the previous system of preferences is supposed to be replaced by reciprocal trade agreements, known as Economic Partnership Agreements (EPAs).

The major concern of stakeholders in agriculture is that these negotiations seem to be going nowhere at the moment.

Worse than that is the perception that as far as the negotiations go, Namibia is a rudderless ship without a captain blindly sailing into a treacherous, rocky reef.

The Friedrich Ebert Foundation, Meat Board of Namibia and the Agricultural Trade Forum yesterday held a seminar in an effort to raise awareness of the problem.

The invited speaker was Professor Gerhard Erasmus of the Trade Law Centre at Stellenbosch University who tried to shed some light on the legal intricacies of the negotiations.

The main message of Professor Erasmus is that Namibia and its SADC partners have few options but to enter into serious negotiations with the EU on an EPA, or the EU’s Generalised System of Preferences (GSP).

He dashed any lingering hopes that the WTO might extend its waiver for preferences given to the ACP by the EU, saying the outlook for a waiver was extremely bleak.

Any change to WTO rules require a 75% majority vote, and Latin American Asian countries that do not benefit from Cotonou, are unlikely to have much sympathy.

He repeated that if there is no agreement before January 01, 2008, a waiver was not the answer, but that Namibia and other SADC countries must start looking at the dynamics of other possibilities such as GSP agreements.

Erasmus was however hopeful that if there are focused and bona-fide negotiations from now until the end of the year, a positive outcome is still possible.

"Don’t give up on efforts to reach a negotiated agreement before the end of the year," he urged.

Even if not all the details of the agreement were ironed out in time, he felt the EU had scope for implementing a provisional agreement.

With regard to the negotiations, he reminded Namibians not to be naïve about what they could hope to receive from the EU.

"They are not there to be Father Christmas. They are there to extract benefits for their own economies," he warned.

Recently appointed EU ambassador to Namibia Elizabeth Pape announced that the EU Commission on Monday received a mandate from member states to negotiate a Southern Africa EPA that would include South Africa.

"The EU Commission has not been working on a Plan B. Renewal of the waiver is out of the question," Pape said, echoing Erasmus’s sentiments.

She however pointed out that since South Africa already has its own separate Free Trade Agreement with the EU, it does not face the same deadline pressure as Namibia and other countries.

"National interests are different and it is therefore important to define what the regional interests are," she advised.

Reflecting the concern of farmers, president of the Namibia Agricultural Union Raimer von Hase wanted to know who in Namibia has the legal basis and capacity to negotiate the necessary agreements.

Jurgen Hoffmann of the Agricultural Trade Forum replied that the legal capacity lay with the Ministry of Trade and Industry (MTI), while the Ministry of Agriculture and other stakeholders would also provide input.

Chief Trade Promotion Officer at MTI, Alfred Ndaveni, gave the assurance that the ministry has all the necessary structures in place to take the interests of all stakeholders forward.

Hoffmann announced that a crucial meeting would be held in Gaborone, Botswana, at the beginning of March to kick off the process.

"Although we are talking figures, we are also talking about people. There are 12 000 employed in the grape industry, 7 500 in fishing and many thousands more in the beef industry both as commercial and communal farmers," Hoffmann said, highlighting the human aspect of the problem.