Following more than ten years of “tough” negotiation, the European Union (EU) and six Southern African countries, including South Africa, signed an Economic Partnership Agreement (EPA) in Botswana on June 10.

The deal seeks to build on an existing €60-billion-a-year trade relationship, with the six Southern African Development Community (SADC) countries exporting around €30-billion worth of goods yearly to the 28 countries of the EU, mostly in the form of metals and minerals.

The “milestone” agreement was signed in the picturesque Botswana town of Kasane, where the Chobe river teams with wildlife and where elephant and buffalo pay scant attention to the international border with Namibia, let alone trade agreements.

The EPA includes Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland and is known as the SADC EPA, despite including only a minority of the SADC’s 15 member States. All six signatories, barring Mozambique, are also members of the Southern African Customs Union (Sacu), which share a common external tariff.

Botswana Trade and Industry Minister Vincent Seretse described the signing as “historic”, but acknowledged that the journey had been long and, at times, “bumpy”.

“The signing of the EU-SADC EPA marks the beginning of a new relationship, a transformation from the old regime of preferences and systems,” Seretse said. The Minister also stressed the asymmetrical nature of the deal, which took account of the region’s relative underdevelopment, as well as its aspiration towards greater integration and industrialisation.

Talks began in 2004 and the EPA was finally initialled in July 2014. The text has since undergone nearly two years of technical “scrubbing”, and now requires ratification by lawmakers in the six African countries, as well as the European Parliament and the 28 EU member States before coming into force.

South Africa’s Trade and Industry Minister, Dr Rob Davies, said in an interview in Kasane that Cabinet had endorsed the EPA, which included some improved market access for South African agricultural products, and that it should be tabled for Parliament’s ratification in the coming week.

The EU-SADC EPA is the first EPA signed between the EU and an African region, with an East African agreement expected to follow in a few months, but with the West African agreement having met fresh resistance.

EU Trade Commissioner Cecilia Malmström stressed at the signing ceremony the developmental bias in the agreement, which extended duty- and quota-free access to all SADC EPA members, except South Africa. Africa’s most developed economy has an existing reciprocal trade framework known as the Trade and Development Cooperation Agreement, which came into force in 2000.

“This agreement is also much more than symbolism. It has the potential to boost growth and support prosperity all across this region. How? By helping economies integrate into the world economy through investment and trade,” she said.

The EPA, Malmström added, locked in access to the EU’s single market of 500-million consumers – access that did not depend on the prevailing “perverse incentive” of beneficiaries remaining least-developed countries (LDCs).

“It guarantees duty-free and quota-free access for all of your exports to our market in the future, no matter how successful you are! That paints a totally new panorama for any potential investor.”

In addition, the EPA included “flexible” rules of origin, enabling countries to use inputs from their neighbours and other LDCs without the risk of forfeiting access to the EU market benefits.

“Under the EPA, an exporter in Namibia, for example, can source inputs from any other country in this EPA, which is a good start. But they can also source inputs from any other EPA. That would include Zimbabwe, for example – not too far from Kasane.”

In an interview, Malmström indicated that the deal was also sensitive to the SADC’s economic integration and industrialisation ambitions. However, she stressed that the benefits and opportunities would not flow automatically and will only be realised through joint effort and cooperation.

“Signing it is only the beginning of the process. Getting the most out of the agreement is the real challenge. That involves making legal changes to open markets − like lowering tariffs over time.”

She saw particular potential in the areas of food processing and manufacturing, owing to the ‘rules of origin’ flexibility catered for in the EPA.

South Africa, meanwhile, had secured improved access to the EU market on a range of agricultural products, as well as greater policy space to introduce export taxes, Davies outlined.

EU statistics show that bilateral trade between South Africa and the EU stood at €44.8-billion in 2015, with the balance tilted in favour of European exports to South Africa, which stood at €25.4-billion.

This improved access had been facilitated in large part by South Africa’s concession on so-called geographical indications (GIs) – 252 European names used to identify agricultural products based on the region from which they originate and the specific process used in their production, such as Champagne and Feta cheese.

In return, the EU has agreed to recognise over 100 South African GIs, including Rooibos and Honeybush teas, Karoo lamb and various wines.

Davies also stressed that, while there had been no obligation on South Africa to participate in the EPA talks in light of its existing trade agreement with the EU, it had decided to participate in 2007, primarily owing to the risk of differential arrangements emerging within Sacu.

He said the outcome had ensured harmony in the customs union, while also securing some benefits for South African farmers, particularly in the areas of sugar, wine, canned fruit and ethanol. Once the EPA came into force, South African would be able to export 110-million litres of wine yearly and 150 000 t/y of sugar into the EU duty-free.

However, government’s main trade priority remained the Trilateral Free-Trade Agreement (FTA), targeting freer trade from Cape to Cairo, up the east of Africa.

Davies said progress was being made in talks with the East African Community (EAC) and that an offer had also been made to Egypt, but admitted that progress had been slower than first hoped. The SADC and the EAC indicated this month that they were hoping to conclude the FTA by year-end.