Stumbling Blocks In Meeting EPA Deadline

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By Emma Kakololo

WINDHOEK

Trade specialists from 16 African countries and representatives of the European Union (EU) recently met in Madagascar amid fears they may not complete ongoing trade talks by December.

The two parties were expected to finalise Economic Partnership Agreements (EPAs) governing trade between the EU and countries from East and Southern Africa (ESA) as from January next year.

However, some believe the inclusion of the so-called new generation, or Singapore issues, in the EPAs will make the conclusion of a deal unlikely by the December 31 deadline.

A senior researcher with the South African Institute for International Affairs (SAIIA), Nkululeko Khumalo, said that the coercive approach adopted by the EU on service liberalisation poisoned the negotiating atmosphere.

According to him, it harmed prospects for a breakthrough in concluding the EPA with the Southern African Development Community (SADC) before the end of the year.

The possibility of not concluding the EPA negotiations by the end-of-year deadline is of significant concern to Namibia, Botswana and Swaziland – the states in the SADC EPA group not categorised as least developed countries (LDCs).

“The non-LDC categorisation excludes them from access to European markets as part of the “Everything but Arms” initiative. This means they are expected to enter into new contractual reciprocal free trade agreements in the form of EPAs to be compatible with WTO rules,” Inter Press Service reports.

According to the report, inconclusive negotiations would lead to the expiry of the WTO waiver, which allowed trade between the ACP and the EU to continue under the preferential terms of the Cotonou Agreement.

The EU will impose financially crippling export tariffs on ACP goods when the waiver expires from January 1 next year.

The Cotonou Agreement signed in June 2000, established the basis for a new trading regime between the EU and ACP countries as a response to adverse rulings in the GATT and WTO.

The preferred option is to replace the unilateral preference system applied to ACP countries for almost 35 years with reciprocal EPAs, negotiated under Article XXIV of the WTO.

The European Commission is being criticised for failing to come up with an “equivalent” alternative to Cotonou for non-LDCs.

Namibia stands to lose around N$675 million per year at the end of the current EU preferences. This amount is equivalent to more than four times the money Namibia receives annually under the Ninth European Development Fund, according to Mareike Meyn of the Overseas Development Institute (ODI).

Namibia’s agricultural exports focus on the EU market, and rely on EU preferences with 44 percent of exports in the meat industry, 70 percent of grape production and 60 percent of fish destined for the EU market.

In the medium term however, experts anticipate higher costs as meat exports are likely to face tariff increases of up to 130 percent – equivalent to 65 percent of total sales revenue.

SADC recently also convened a workshop to prepare for the launching of its own regional Free Trade Area (FTA) next year.

In March this year, SADC set 2008 as the deadline for the introduction of zero tariff rates in keeping with the minimum conditions of an FTA.

By that target date, SADC expects the conduct of more than 85 percent of regional trade at zero tariff rates. It expects the figure to rise to 99 percent in 2012, when it scraps tariffs for listed sensitive products.

At the Gaborone meeting, the community’s Executive Secretary, Dr Tomaz Augusto Salomao, said the need to create awareness in this process could not be over emphasised.

The process, he added, would require meaningful and effective involvement by all SADC’s stakeholders.

“The launch of the SADC FTA will be a new progressive development of significant importance to the private sector, and all other stakeholders in the SADC Region,” said Solomao.

Therefore, the purpose of the communications strategy and Action Plan was to help direct and guide the process of public information dissemination and education, in order for the stakeholders to take full advantage of the opportunities that the FTA will provide.

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