By Wezi Tjaronda
Namibia has opposed attempts by the European Commission to have South Africa expand its markets access for EU products beyond the Trade and Development Cooperation Agreement (TDCA).
An arrangement of this nature has the potential to displace Namibia’s exports to South Africa, which is the country’s most important trading partner in terms of both imports and exports.
SACU and Angola, Tanzania and Mozambique (ATM) countries are negotiating their Economic Partnership Agreement (EPA) under the SADC configuration but, to have South Africa, which is party to the SACU agreement, included in the SADC configuration, the southern African country will not only have to open up its market access beyond TDCA levels but also negotiate services with the EU.
Minister of Trade and Industry, Immanuel Ngatjizeko, said in a speech that was read on his behalf by Namibia Investment Centre’s executive director, Bernadette Artivor, that in addition to the South Africa/EU TDCA impacting on Namibia negatively, the free trade agreement was a violation of the SACU agreement.
It was projected in 1999 that economies of South Africa’s SACU neighbours would feel the harshest effects of the trade deal. Since trade between SACU economies is tariff-free, a South African free trade agreement with the EU would therefore in effect be extended to the smaller BLNS economies.
“And because the five Southern African countries share common external tariffs, the erosion of these tariffs over the next 12 years under the terms of the South Africa-EU trade pact is expected to impose considerable adjustment costs. BLNS governments rely heavily on revenue from customs duties, which provide around half of total government revenue for Lesotho and Namibia, about one-third of Swaziland’s fiscal revenue and 14 percent of Botswana’s fiscal revenue,” according to an April 1998 working paper of the European Centre for Development Policy Management posted on the Internet.
Ngatjizeko said Namibia never granted the requisite permission to South Africa to implement the TDCA and that there was also need to harmonize SACU’s trade relations with the EU under one trading regime.
“As such, Namibia cannot afford to further open up its markets beyond TDCA levels under such a regime as it can be considered to have made autonomus liberalization under the TDCA,” he said, adding that Namibia aims to retain and further expand her share of the South African market, taking into account its industrial development and national export strategies.
This was said during the SADC EPA information seminar organized by the Director-General of Trade of the European Commission yesterday. The seminar brought together representatives of the government, private sector and civil society organizations from countries that form the SADC Configuration.
With the end of the World Trade Organization (WTO) preferences waiver for Cotonou trade preferences at the end of this year, the affected countries, which include Namibia, can agree to negotiate Economic Partnership agreements to qualify for EU’s offer to eliminate tariffs and import quotas for ACP countries.
This offer gives all these countries the same full market access to the 27 EU countries that all least-developed countries (LDCs) in this group and elsewhere already have under the EU’s Everything But Arms (EBA) regime.
The negotiations were launched in Windhoek three years ago. The partners have now exchanged their offers, and it is expected that they will move towards a conclusion on important parts of the agenda during the negotiations to take place later this week in Walvis Bay.
SADC proposed a framework on the scope and principles for the negotiations on the EU in March 2006 with main elements being harmonizing SADC countries trade relations with the EU into a single trade regime, asymmetrical reciprocation of market access between SADC EPA and the EU, negotiating new-generation issues on a cooperative basis, considering special treatment for Lesotho and consideration of the special sensitivities of the BLNS countries.
The EU, in its response in February, advocates a differentiated offer to the SADC EPA, under which South Africa would be capped at TDCA levels.
A website of the EC’s Development and Relations of the ACP said that in view of the link with the SADC/EPA negotiations and South Africa’s participation in them, it is highly probable that the TDCA trade talks will be suspended, pending the outcome of the EPA negotiations.
Namibia’s position on the negotiations remains the same in line with the March 2006 Framework.
Ngatjizeko said Namibia wants the EU to maintain its duty-free and quota-free access offer to the SADC EPA, which would improve current market access to their market under the Cotonou Agreement.
If no agreement is reached by the end of this year, Namibia stands to lose 45 million euros in taxes to the EU.
But, such market access will have to be accompanied by liberal Rules of Origin and support structures to address supply side and constraints and also to enable the SADC EPA countries to meet the EU SPS measures and standards.