Peter Fabricius Foreign Editor
The EU made the bigger concessions to South Africa and other southern African countries in the just-concluded trade negotiations because it badly wanted the economic partnership agreement (EPA) that was agreed, for strategic reasons, it said.
After 10 years of hard negotiations the EU finally concluded a deal with South Africa, Botswana, Lesotho, Namibia, Swaziland and Mozambique for a Southern African Development Community (SADC) EPA on July 15. It is expected to come into force in about eight months. Angola may join later.
Trade and Industry Minister Rob Davies hailed the deal as a marked improvement on South Africa’s bilateral trade, development and co-operation agreement with the EU, which has been operating for about 15 years.
South Africa’s major victories were in negotiating greater access to the EU market for 32 agricultural products, especially wine – with an increase in the quota from 40 million litres to 110 million litres a year; sugar, with a new quota of 150 000 tons a year and ethanol, with a new quota of 80 000 tons a year, all duty free.
South Africa previously had no duty-free quota for sugar and ethanol exports to the EU.
Davies’s department also said improved rules of origin in the EPA would facilitate trade and industralisation in the region. And though the EU had initially opposed export taxes, it eventually compromised by allowing such taxes on eight products for 12 years, with some exception for exports to the EU. The department also said the EU had agreed to eliminate export subsidies on agricultural goods destined to the Southern African Customs Union, as well as more effective safeguards to address damaging surges of imports.
South African sugar, ethanol and wine producers have enthused about the agreement.
Axel Pougin de la Maisonneuve, the EU’s deputy ambassador in South Africa, said the South African government was right to hail all the concessions it had won in the EPA.
“We compromised a lot to get an accord,” he said, because it was economically, politically and strategically important for the EU to tie down a trade agreement with Southern Africa as a whole.
This was mainly because the current non-reciprocal Cotonou trade deal which the EU has with Botswana, Namibia, Lesotho, Swaziland and Mozambique was facing mounting legal challenges as it fell foul of the World Trade Organisation’s rules that require reciprocal agreements.
If the EPA deal had not been done by October 1, Botswana, Namibia and Swaziland, as middle-income countries, would have lost substantial market share for their agricultural exports because they would have lost their duty-free, quota-free access to the EU market.
And the broader strategic significance of the deal was that the EU had now moved from a non-reciprocal trade relationship with the other southern African countries in the deal – apart from South Africa – to a normal, reciprocal trading relationship.
The EU had initiated an EPA with west Africa a week before doing so on the SADC EPA and was still busy negotiating EPAs with the East African Community and with central Africa.
Pougin de la Maisonneuve said the major concession won by the EU, in turn, was that the Southern Africans had agreed to recognise 251 of its “geographic indicators”. These give producers of agricultural products the exclusive rights to a traditional product name associated with their region or to a traditional fabrication process.
The products recognised include wines, spirits, sausages, hams and cheeses – for example “Camembert de Normandie”.
He said that the EU regarded geographic indicators as increasingly important in keeping its agriculture products competitive internationally and so it was seeking protection for them in all its free trade agreements.
Current South African producers of those products would be able to continue marketing them with those names but new producers would not be able to.
Conversely, for the first time, South Africa negotiated the exclusive rights to some of its own – 105 in all, comprising wines, plus rooibos, honeybush, and Karoo lamb. This would give South African producers protection for their product names in the EU’s market of 500 million consumers and in the southern African market.
Pougin de la Maisonneuve said it had been difficult for the EU to win any other market concessions for its products in southern Africa in the present economic climate. He warned that South African agricultural producers would have to work hard to market their produce in the EU to take full advantage of the concessions which their government had negotiated.