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EU, South Africa Discuss SADC EPA Timing

by Lorys Charalambous, Tax-News.com, Cyprus

23 July 2013


In a joint communiqué issued after their 6th Summit, which ended on July 18, the South African and European Union (EU) leaders said that they were convinced that the pending issues currently holding up completion of Europe's economic partnership agreement (EPA) with the Southern African Development Community (SADC) could be resolved.

Overall, President Jacob Zuma said South Africa remains concerned about the present trade deficit that is in the EU's favor. Total trade with EU countries last year was ZAR383bn (USD38.8bn), with South African imports from the EU reaching ZAR239bn.

While South Africa "urged the EU to work harder on the removal of non-tariff barriers to trade," the leaders agreed to remain committed to "open and transparent" trade rules, and agreed to work on policies that promote bilateral trade and investment that is mutually beneficial.

Also with regard to trade, the leaders discussed the October 2014 deadline imposed by the EU for the conclusion of the economic partnership agreement (EPA) with the 15 SADC member countries. The EPA would give the SADC countries preferential tariffs and quotas for their agricultural and agro-processed products.

Before the Summit, South Africa's Trade and Industry Minister Rob Davies pointed out that, while the European Trade Commissioner Karel de Gucht had said that the withdrawal of the provisional market access would be October next year, the European Parliament wanted the deadline to be 2016. "We support this rather than 2014," said Davies, citing this as one of the issues that needed to be resolved between parties.

South Africa has warned that the threat of withdrawing preferential market access if the EPA is not concluded on time for products from South Africa and neighboring countries, such as Botswana, Namibia and Swaziland, this "would have devastating socio-economic consequences, as it would lead to significant job losses."

"It will not affect us but it will affect our neighbors," added Davies, "and we are concerned about the consequences of any unilateral withdrawal of market access to a bunch of countries, which are clearly developing countries, merely because we can't meet an artificially imposed deadline."

South Africa already has a bilateral trade treaty with the EU, the Trade, Development and Cooperation Agreement, whose architecture is premised on the EU granting South Africa increased access in terms of reduced tariffs in manufactured products. It has been said that one issue concerning the EU-SACU EPA remains whether the EU should provide greater tariff incentives for developing African countries to supply value-added manufactured and processed goods, rather than simply agricultural products and natural resources.

As a consequence, while the communiqué confirmed that the leaders "agreed that the (EPA) negotiations should conclude shortly," it also "reaffirmed the importance of reaching an agreement that is mutually beneficial, enhances growth and generates jobs, and supports development and integration in Southern Africa."

The leaders were convinced that common ground could be found on the pending issues, and urged the negotiators to expedite their work.

TAGS: South Africa | tax | Mauritius | Swaziland | Zimbabwe | law | tariffs | trade treaty | Angola | Lesotho | Malawi | Mozambique | food | agreements | manufacturing | Botswana | Congo, Democratic Republic of the | Namibia | Zambia | import duty | trade | European Union (EU) | Seychelles | Tanzania | Europe | Africa

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