Historic EU trade deal to be signed in Botswana
Isaac Pinielo | Thursday May 26, 2016 18:00
This was said by Gemma Mbegabolawe, a chief trade officer at the Ministry of Investment, Trade and Industry, at the EU-SADC EPA workshop held in Gaborone on Tuesday.
“The signing ceremony for the EU-SADC EPA is scheduled for June 10, 2016, in Kasane,” she said.
Mbegabolawe stated that this will be a historical event that would mark a great achievement and a milestone, not only for the SADC EPA states, but for the whole SADC region. The agreement is expected to be implemented ahead of October 2016, when the market access regulation expires. Four of the seven SADC EPA states, Botswana, Lesotho, Swaziland and Mozambique, are negotiating for liberalisation of the services sectors with the EU.
Angola, Namibia and South Africa are free to join the negotiations or later accede to the future agreement on their own terms.
The EU-SADC EPA negotiations, which started in 2004, were aimed at being; reciprocal, World Trade Organisation (WTO) compliant, development oriented, and to build upon regional integration initiatives.
Of the 15 SADC member states, only seven countries negotiate under the SADC EPA configuration. They are Botswana, Lesotho, Swaziland, South Africa, Namibia, Angola and Mozambique.
Mbegabolawe said the EPA is premised on objectives to contribute to poverty reduction, promote regional integration, economic cooperation and good governance.
“The agreement also aims to promote gradual integration of SADC EPA states into the world economy, improving SADC EPA states’ capacity in trade policy and trade related issues, as well as strengthening relations between the parties,” she said.
The EPA also creates a predictable and reciprocal, although asymmetrical, trading relationship between SADC EPA states and the EU.
In addition, she said, it is expected to enhance regional integration, especially the preservation of the Southern African Customs Union (SACU) common external tariff (CET) by the inclusion of South Africa.
Mbegabolawe pointed out that Botswana industries have a chance to increase and diversify their production by exporting to the EU, adding that they also have an opportunity to benefit from technical assistance to support growth of production in their industries. “Duty-free, quota-free is attractive and non-limiting, therefore it is up to countries to take advantage of it,” Mbegabolawe said.
She added that the negotiations have resulted in achievements such as on market access, duty-free, quota-free access on all products, both agricultural and industrial products from Botswana into the EU market.
In turn, she explained that SADC EPA states accord preferential access for EU products at more relaxed terms for ‘substantially all trade’ – meaning that some products are excluded from liberalisation and for those being liberalised some of them are phased down over a number of years.
“SACU only offered EU 23 agricultural lines out of 67 agriculture lines that EU had initially requested for market access,” she said.
She went on to say there is no automatic extension of the ‘most favoured nation’ treatment to the EU regarding any better treatment that Botswana may in future negotiate with another major economy, thereby keeping options open for future South-South trading arrangements.
For the EU, she said, if they offer any other country any treatment better than what they offered Botswana, they will automatically and unconditionally extend the same preference to Botswana.
“For SACU, if we offer a better preference to a major economy, trade exceeding one percent of world trade, the EU has to negotiate that. We extend the same treatment to them,” Mbegabolawe said.
She said Botswana, Lesotho, Mozambique, Namibia and Swaziland secured the ‘infant industry protection’ provision, which is in line with the 2002 SACU agreement provisions.
According to Mbegabolawe, the provision allows Botswana to protect ‘new industries’ from more advanced industries. She stated that an industry is protected for eight years, but the provision is permanent.
The trade officer also said protection has been accordingly accorded to sensitive products produced in Botswana, along with Lesotho, Namibia and Swaziland.
These products, she said, were fully liberalised under the trade and development cooperation agreement (TDCA) between the EU and South Africa.
“The provision will be in place for 12 years for a limited list of 60 product lines, compared to the 54 products under the interim EPA,” she said.
Botswana, together with the SADC EPA group, secured a specific agricultural safeguard in addition to the bilateral safeguard given the sensitivities of the agricultural sector.
The provision will be in place for 12 years and it will cover 23 products that will be liberalised in this agreement. Mbegabolawe said the agricultural safeguard will be easier to implement as it will be triggered by increases in import levels, that is, the SADC EPA group does not have the burden to prove that they are being affected by EU products.