The European Union (EU) is optimistic that some SADC countries that are in the negotiating group for Economic Partnership Agreements (EPAs) will come fourth and sign an interim agreement.
This week, Mozambique, one of the members of the SADC-EPA group that had declined to put its signature on the EU-SADC Interim EPA document, finally signed the agreement.
The country was not represented in Brussels during the signing of the document.
“The EPA ensures continued preferential access to the EU market for exports from Mozambique,” the European Union office in Botswana announced this week.
The decision by Maputo follows signatures by Lesotho, Swaziland and Botswana on June 4 in Brussels.
Other SADC-EPA members that have not yet signed the interim agreement are South Africa, Namibia and Angola.
“The EU hopes that Namibia will sign in the near future and will continue to work with Angola and South Africa on certain outstanding issues. Both Angola and South Africa have existing trade regimes with the EU in place,” stated the EU.
Two of the remaining economies have fall back positions. Angola as a Least Developed Country (LDC) continues to benefit from duty-free, quota-free access to the EU market through the Everything but Arms (EBA) initiative. This is a sub-scheme of the Generalised System of Preferences or GSP.
South Africa-EU trade is governed by the Trade and Development Cooperation Agreement (TDCA) signed in 1999. Namibia, on the other hand, while it has initialled the EPAs in 2007, remains vulnerable because it will have to compete with giants like Brazil for exports such as beef.
“The signatories have agreed to work towards a comprehensive EPA, which will address all outstanding issues in terms of trade in goods, and also include chapters on services and trade-related aspects, such as investment. All seven SADC countries are fully involved in this process,” said the EU.
Last week, the Chairman of SADC-EPA group, Neo Moroka, said it took a longer time to initial because of concerns from members.
The major issues of contention from members included the protection of infant industries and external tariffs that have led to concerns the disagreements might break up SACU, the regional customs union.
He said the agreement was that those who were willing to sign should do so and those who did not were doing it out of their risk.
The EU-SADC EPA aims to boost existing regional integration processes such as the Southern Africa Customs Union (SACU) by providing the opportunity to create a single EU-SACU trade regime.
The EU-SADC EPA actually removes differences between the trade regime offered to South Africa (TDCA) and the other SACU members that have existed for many years thus bringing the region closer to a single trade regime with the EU than ever before.
Out of several thousand product lines, only 53 will be covered by different tariffs. Therefore, the EU-SADC EPA is conducive to regional integration and economic development.
The EU represents SADC group’s largest trading partner: in 2008 total trade flows with the EU for the four countries which have now signed the interim EPA was almost Ôé¼2.1 billion.
All four countries enjoyed individual trade surpluses with the EU ÔÇô the combined surplus standing at around Ôé¼1 billion.
In 2008, the main exports to the EU for the four countries were aluminium, diamonds, sugar, beef and fish. Their main imports from the EU were mechanical machinery, electrical machinery, fertilisers and vehicles.
The SADC region as a whole has been a net beneficiary of trade with the EU up to now and the EPA will allow the region to boost competitiveness, diversify its exports, and build strong regional cooperation networks.
All of this goes hand in hand with EU financial support through the European Development Fund (EDF) and Aid for Trade facilities.