SA claims market-access improvements as deal with EU is finally ‘initialled’

18th July 2014

By: Terence Creamer

Creamer Media Editor

  

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The long-running and highly contested Economic Partnership Agreement (EPA) negotiations between seven Southern African countries and the European Union (EU) have been concluded, with South Africa insisting that the new deal preserves coherence within the Southern African Customs Union (Sacu) and improves the country’s access to the EU market.

The countries making up the so-called Southern African Development Community EPA group comprise Angola, Botswana, Lesotho, Mozambique, Namibia, Swaziland and South Africa.

South Africa’s Department of Trade and Industry reported this week that, following ten years of talks, chief negotiators initialled the EPA at a meeting in Pretoria on July 15 – ahead of the October 1, 2014, deadline imposed by the EU for the conclusion of the reciprocal trade arrangement.

The EU has either concluded EPAs, or is in EPA talks, with seven African, Caribbean and Pacific regions, which previously enjoyed nonreciprocal preferential market access to the EU. The lack of reciprocity in the arrangement was said to be incompatible with World Trade Organisaiton rules.

A failure to conclude a deal by October 1 would have resulted in Botswana, Namibia and Swaziland losing their preferential access to the EU for exports of beef, fish and sugar. The EU reportedly gave an assurance that the act of initialling was sufficient to sustain current market access until the EPA entered into force. South Africa faced no such threat, as its relations with the EU are governed by the reciprocal Trade, Development and Cooperation Agreement (TDCA), which came into force in 2004.

The EPA would be subjected to a two-month vetting process and the agreement would be presented to South Africa’s Cabinet for approval before being submitted to Parliament for ratification. “Once ratified, the agreement may be signed and it will enter into force once all parties have concluded their own respective national approval processes. The timeframe for this process is likely to be around eight months,” the department said.

The EPA outcome, it added, preserved Sacu’s functional coherence, particularly in regard to maintaining the common external tariff, “although the EU continues to provide the other members of the SADC EPA Group better access to its market than it offers South Africa”.

However, the department stressed that the EPA terms represented an improvement on the TDCA, with South Africa securing superior market access for 32 agricultural products, with a significant improvement in its access for wine (110-million litre duty free), sugar (150 000 t duty free) and ethanol (80 000 t duty free). There was also some improved access for South African flower, dairy and fruit exports.

The EPA rules of origin also represented an improvement over the TDCA, while an agreement was also secured that the EU would eliminate export subsidies on agricultural goods destined to Sacu, as well as more effective safeguards to address damaging surges of imports.

In return, South Africa agreed to negotiate a protocol on geographic indications (GIs), which are place names used to identify products, such as Champagne, Tequila, or Roquefort. For its part, South African would seek to protect the names of specialised South African agricultural products, such as Rooibos and Honeybush.

Speaking ahead for the deal, Trade and Industry Minister Dr Rob Davies said the GIs concession was significant, “because they have many more GIs than we do”.

But Davies also stressed that South Africa was keen to improve its trade performance with the EU, which remained the country’s largest trading partner as a bloc.

South Africa’s exports to the EU had not recovered from the economic crisis, with exports to the EU having been €22-billion in 2008 and only €20-billion in 2012. By contrast, EU imports to South Africa increased to €25-billion in 2012, from €22-billion in 2008.

Edited by Creamer Media Reporter

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