Bridges Weekly Trade News Digest • Volume 13 • Number 6 • 18th February 2009
EU Trade Commissioner Pushes for Economic Integration with African Nations
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EU Trade Commissioner Catherine Ashton visited several nations in Southern Africa last week, where she held talks with key governmental leaders. Although the general purpose of the trip was to promote bilateral and regional trade relations, Ashton also hoped to make progress on a potential Economic Partnership Agreement, or EPA, between members of the South African Development Community (SADC) and the European Union.
“I want to engage with Southern African countries so that we can all gain more from our economic relationship,” Ashton said.
Within the 15-member SADC, seven nations compose the ‘SADC EPA’ group that is in negotiations toward a partnership deal with the EU. This group, which comprises Angola, Botswana, Lesotho, Mozambique, Namibia, Swaziland and South Africa, hopes to ultimately create a free trade area between the two blocs.
Negotiations between Brussels and the SADC group have been ongoing since 2004, and an interim EPA was signed between Botswana, Lesotho, Mozambique, Namibia, Swaziland and the EU in 2007. However, that agreement left many issues unresolved, namely the reconciliation of various trade relationships between the EU and various African nations, some of which have signed their own agreements with Brussels.
Absent from the 2007 interim agreement was SADC member South Africa, which signed its own trade and cooperation agreement with Brussels ten years ago.
But the EU is still keen to expand trade relations with Africa’s largest economy.
“I am particularly committed to discussing South Africa’s concerns over our Economic Partnership Agreement,” said Ashton, who spent two days of her trip in Cape Town.
Further complicating negotiations is the status of Angola, which has been granted permission to join the 2007 interim agreement, but which already enjoys substantial EU market access as a Least Developed Country.
The Southern African Customs Union, a four-nation bloc within the SADC, was evenly split over whether to join the 2007 pact with the EU. Both South Africa and Namibia refused initially, but Namibia eventually signed in the closing hours of discussion in December 2007 on the condition that future negotiations would address its concerns regarding service liberalisation.
Namibia’s concern echoes the worries of some African countries, which are hesitant to agree to liberalisation of services. Brussels insists such easing of restrictions will create predictable and stable conditions for European investment.
During the visit, ministers and high-level officials from Namibia as well as other SADC nations got a chance to voice these concerns, planning to meet with Commissioner Ashton over the course of three days in Botswana and South Africa.
ICTSD Reporting; “Trading blocs to continue with EPA negotiations,” AFRICA BUSINESS DAILY, 12 February 2009; “Namibia Revives EPA Discussions,” NEW ERA (Namibia), 12 February 2009.
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Your article of 18 February 2009, “EU Trade Commissioner Pushes for Economic Integration with African Nations”, refers.
In the article it is stated that “The Southern African Customs Union, a four-nation bloc within the SADC, was evenly split over whether to join the 2007 pact with the EU. Both South Africa and Namibia refused initially [to initial the interim EPA], but Namibia eventually signed [replace with 'initialled']in the closing hours of discussion in December 2007 on the condition that future negotiations would address its concerns regarding service liberalisation. This statement is incomplete.
After the last round of EPA negotiations in 2007, Namibia decided not to initial an interim EPA with the EU because it encountered a list of unresolved issues that could have a detrimental effect on the long-term economic development of the country and limited its national policy space. During the EU-Africa Summit in Lisbon during December 2007, the President of the European Commission, Manuel Barroso, gave the assurance that during 2008 the contentious provisions in the interim EPAs would be re-opened for negotiation. Namibia then decided to initial the interim EPA on 12 December 2007 with an accompanying statement containing a prerequisite that the initialling is contingent on the assurance that the unresolved issues encountered during 2007 be re-opened for negotiation in an effort to find a mutual solution.
The unresolved issues pertaining to the interim EPA negotiations were listed in a media release from the Namibian Ministry of Trade and Industry on 13 December 2007. These included (but are not limited to) “the non-negotiable Most Favoured Nation treatment provision sought by the European Commission, the freezing of export taxes/levies/charges and thus Namibia’s ability to use such measures as incentives for value-addition and manufacturing, the abolition of quantitative restrictions on imports with respect of cereal production and thus food security in Namibia, inadequate provision made for Infant Industry Protection, the abolition of restrictions on local content in manufactured or processed goods, and the modalities of administering the free movement of goods within the SADC EPA States in a manner that may not be compatible with our Southern African Customs Union (SACU), or would predicate the modalities for a future SADC Customs Union.”
The interim EPA that Namibia initialled also contains the following declaration on the origin of fisheries products:
“Namibia reaffirm the point of view it expressed throughout the negotiations on the rules of origin in respect of fishery products and consequently maintain that following the exercise of their sovereign rights over fishery resources in the waters within their national jurisdiction, including the exclusive economic zone, as defined in the United Nations Convention on the Law of the Sea, all catches effected in those waters and obligatory landed in ports of Namibia for processing should enjoy originating status.
In so far as the European Free Trade Area (EFTA) States acknowledge Namibia’s EEZ for the purposes of Rules of Origin, as embodied in Annex IV to the Free Trade Agreement between SACU and EFTA relating to Fish and Marine Products, Namibia maintains that all catches effected in her waters as defined above and obligatorily landed in all ports of Namibia for processing, should enjoy originating status.”