Red EPA lights flicker for Namibia

Business Day 04.03.10

Red EPA lights flicker for Namibia

NAMIBIA, South Africa and Angola could soon be left in the cold if they continue to resist signing the economic partnership agreement (EPA) with the European Union (EU) which is increasingly under pressure to streamline its trading policies under World Trade Organisation (WTO) regulations, the European Commission’s trade directorate has said.

Addressing an information seminar on the EPA negotiations between the EU and the Southern African Development Community (SADC), Jacques Wunenburger, head of the commission’s trade directorate, said countries that have signed the interim EPA are rightfully concerned that the EU is continuing to grant SA, Angola and Namibia the same privileges in terms of trade access even though they had not signed.

“The situation is untenable because it is unfair to countries that have signed and it is an illegal arrangement not permissible under the WTO,” Business Day quoted him as saying.

Wunenburger said it has been a challenge for his unit to negotiate with SADC since only seven of its 15 member countries negotiated an EPA with the EU as the SADC group. The remaining eight SADC member states (the Democratic Republic of Congo, Madagascar, Malawi, Mauritius, Seychelles, Tanzania, Zambia and Zimbabwe) are negotiating in other regional EPA configurations such as the East Africa Community (EAC).

South Africa had initially participated as an observer and in a supportive capacity for Angola, Botswana, Lesotho, Mozambique, Namibia and Swaziland, partly because it has a separate agreement with the EU – the Trade, Development and Cooperation Agreement (TDCA). It formally joined negotiations in 2007.

Botswana, Lesotho, Swaziland and Mozambique signed the interim EPA in June 2009. Although Namibia initialled the agreement more than two years ago, it decided not to sign. However, South Africa did not join the agreement due to a series of disagreements on some of the key provisions of the text.

Angola did not join the agreement either, because it has not yet tabled a tariff offer. In the meantime Angola, being one of the least developed countries (LDCs) in the continent, maintains duty-free market access to the EU under the ‘Everything But Arms initiative’ while EU-SA trade is covered by the TDCA. However, the interim EPA contains a clause allowing Angola or SA to join rapidly.

The three countries nevertheless still benefit from duty- and quota-free access to the EU that was granted temporarily to all ACP (African, Caribbean and Pacific) nations under the so-called Market Access EPA Regulation.

According to Wunenburger, negotiations for a full EPA, including services, investment and trade related rules, must continue and also involve Namibia, Angola and SA who “opted out” from this commitment on services.

South Africa was particularly reluctant to relent on this point because it would allow EU business to come to the region to challenge its dominance. He said he was hopeful that they could revise their position and that the matter could be concluded.

Ivano Casella, also from the Commission’s trade directorate, said the interim EPA was a vast improvement in that it has harmonised an estimated 3 000 various tariff barriers to many developing countries in the ACP region to a mere 53 tariff lines.

It was even better than the African Growth Opportunity Act (AGOA) of the US as it focused on helping a few countries while the EU’s agreement targets all developing states and provides market access for many products.

Casella denied that the EU was dividing the Southern African Customs Union (SACU), saying the agreement will instead strengthen it because it will broaden the region and ensure that trade has a bigger market by including more SADC countries. He said the move will facilitate economic growth for SADC as a whole.

source: The Namibian