Thursday, May 5, 2011

EPA negotiations on backburner

by Njini Felix (The Southern Times, Windhoek, 2011-04-19)

Negotiations for a new economic partnership agreement (EPA) between SADC members and the European Union appear to have been shelved with no fixed date for resumption of the protracted trade negotiations.

The Southern Times understands that talks between SADC countries and the EU for a new trade deal are on the backburner, with both parties shifting focus to pressing domestic economic and trade issues.

The SADC and EU negotiating teams last met in November 2010 in Mozambique.

Instead, the Southern Africa bloc seems more concerned with talks on coalescing SADC, the East African Community and the Common Market for Eastern and Southern Africa into what has become known as the trilateral free trade area (T-FTA).

The T-FTA brings together 26 countries with a combined gross domestic product of US$624 billion and a population of approximately 700 million.

The T-FTA is in line with continental ambitions to deepen and widen integration and trade opportunities from Cape to Cairo.

The EU is grappling with its sovereign debt crisis, which analysts say could spiral out of control. The European bloc also has to contend with a market squeeze induced by the emerging economies of Brazil, Russia, India, China and South Africa (BRICS).

Namibia's Finance Minister Saara Kuugongelwa-Amadhila last month hinted that negotiations for a new trade deal with the EU could be concluded in July, something trade analysts say looks increasingly unrealistic.

“The timeframe for concluding the negotiations will largely depend on the extent to which the parties accommodate each other on issues of interest and the challenges that such issues would present on negotiations.

“A new deadline for the negotiations has been set for July 2011,” Kuugongelwa-Amadhila told Parliament.

The negotiations have been clouded by a series of disagreements and confrontations since the initial trade regime expired in 2007.

The EU is accused of employing bully tactics.

Annascy Mwanyangapo, director of international trade in Namibia’s Ministry of Trade and Industry, told The Southern Times that the absence of an operating timeframe scuttled hopes of a deal being reached any time soon.

“These deadlines have been there since 2007. This has always been the case. We hope negotiations will continue but there is no clarity on dates,” Mwanyangapo said.

The Cotonou Agreement for Preferential Trade between the ACP and EU expired in December 2007. The regime, which was heavily tilted in the EU’s favour, was declared incompatible with World Trade Organisation rules.

Since then, Africa and the EU have struggled to find common ground on key issues such as the most favoured nation clause, which Europe insists is non-negotiable.

The MFN refers to the EU’s insistence that future trade preferences agreed with third parties such as China, India and Brazil are automatically extended to the EU, despite WTO rules allowing developing countries to extend preferential arrangements to each other.

Other thorny issues have emerged around new generation issues of trade in services, investment, competition, and government procurement.

Analysts say the EU’s position will leave poor African countries as net exporters of cheap, unprocessed materials.

South Africa-based Trade Law Centre for Southern Africa executive director, Trudi Hartzenberg, told this paper that while the EU remained an important market for regional economies, it was crucial to consolidate intra-African trade.

“There are other agendas in Europe that are particularly important. They are focusing on their domestic challenges, broader economic development issues. They are taking a look at the emerging markets (BRICS).

“SADC, COMESA and EAC have been pretty busy with the tripartite FTA and SACU has also been pre-occupied with its internal issues.

“The sense of urgency has receded on both sides. The EPA is not as urgent as it was maybe three to four years ago,” Hartzenberg said.

South Africa, the region’s economic powerhouse, has also shifted attention.

“South Africa has for some time articulated a particular relationship with BRICS. Such relationships are quite important to South Africa. The relationship has an impact on SACU as the countries negotiate as a single group,” Hartzenberg added.

Southern African economies still require EU market access for agricultural products like beef, fish and fresh produce.

“There could be benefits to both parties concluding negotiations,” Hartzenberg said.

Writing in South Africa’s Sowetan newspaper recently, Professor Mwesiga Baregu blamed the EU for its divisive position on African countries.

“The irony is that while Europe is creating greater unity through an expanded EU, Africa – under EU pressure – is disintegrating into regional EPAs linked to the EU with the effect of weakening existing regional economic communities and eventually scuttling the dream of a politically unified Africa.

“Ironically, the socio-economic marginalisation of Africa in its share of international production, consumption and trade, as well as its impoverishment, is the same process intensifying the exploitation of Africa’s resources,” Baregu opined.