EPA means Swaziland’s key export – sugar has a new lease of life.

EU – Southern Africa trade pact signed finally

10 JUNE 2016: The European Union and six Southern Africa countries have finally signed the Economic Partnership Agreement (EPA).

For Swaziland especially, EPA means assurance of the future in the European market for sugar – the Kingdom’s most important export. Without this agreement, Swazi sugar entering the EU market would immediately attract customs duties and become more expensive. Similarly, exports to the EU, such as fish from Namibia or meat from Botswana would attract customs duties of between 15 and 100% when these products cross the border into Eu

“That would be bad news for both African producers and European consumers, and it’s cert
ainly not the relationship that the EU wants to have with Southern Africa,” EU Commissioner for Trade Cecilia Malmström.

EPA, in Brussels on Friday, 10 June 2016, brings together Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland in a trade relationship 28 EU countries. For several years now, EPA has been a source of trade tensions between the interests of South Africa – the largest regional trading country and those of its much smaller neighbours.

“Today’s signature is a sign of the joint willingness of the EU and these Southern African countries to strengthen the ties between us, while basing our trade relations on a predictable business environment. Commonly agreed rules include areas such as customs procedures, sanitary measures, and technical barriers to trade. That, in turn, prepares the ground for economic growth and sustainable development,” Malmström said.

She said getting rid of customs duties for African exporters, big and small, is one reason why it is so important to get this agreement in place – the free, long-term and stable access for Southern African products to the EU market. Much of the existing procedures for trade between the EU and several countries in the region are about to expire.

A high priority of many countries in Southern Africa is also to diversify their economies – to broaden production to include a wider range of products and services. In this process, imports of certain goods become vital – industrial parts, seeds and machinery, for instance. Now import duties of many so-called intermediary goods will be significantly reduced, becoming more easily accessible to Southern African entrepreneurs.
“Today’s Economic Partnership Agreement is of an entirely new species – it is the first trade deal that directly supports the economic integration of a specific region. As we in Europe have experienced through trial and error over many years – the regional integration of markets is one of the most powerful drivers of prosperity, stability and growth that mankind has devised. So together, we have shaped this economic partnership in a way that favours closer links within the six Southern African nations involved.

“We have also agreed on flexible so-called ‘rules of origin’ for the Southern African producers. It will make it easier to put together products from components from other countries without risking losing one’s free access to the EU market. When producing and exporting canned fruit, for instance, the fruit can be now harvested in one country, then preserved and canned in another. Products in these value chains can also come from other so-called least developed countries, such as Zambia and Tanzania.”

“At the same time, while negotiating this deal we took full account of the economic and societal differences between the countries involved. This led us, from the EU side, to commit to eliminating much more of our customs duties than our Southern African partners. In short – the EU opens up its markets far more, and far faster, providing free market access to the African countries involved. The markets of the six Southern African nations, meanwhile, are going to be only partially and very gradually opened to European products. The Southern African countries also retain their right to invoke protective measures – for instance to protect nascent, fragile industries or for food security reasons – safeguarding the region’s right to pursue policies as it sees fit.”

“The overarching goal of our agreement is to spur sustainable development. In doing this, we build on principles of rule of law, respect for human rights, and democracy enshrined in the Cotonou Agreement of 2000. A specific chapter upholds workers’ rights and covers environmental protection, for instance by supporting best practices in forest management and sustainable fishing. Civil society will have a special role in monitoring the impact of the agreement.

“After today’s signature, we must make sure that the agreement actually delivers. The European Union is ready to assist its African partners to overcome challenges in putting this agreement in place. Going forward, our new, joint institutions will ensure the smooth handling of all trade issues and support a deepened dialogue between us. Today’s signature marks the end of a long process, but it is rather a beginning – we are creating a partnership in the true sense of the word,” Malmström said.