EPA creates impetus to boost local industries
Isaac Pinielo | Tuesday June 14, 2016 18:00
Speaking in Kasane at the signing of the EPA between the European Union (EU) and SADC, commissioner for trade, Cecilia Malmström, said there are some challenges in getting the most out of the agreement that include making legal changes to open markets.
She said this involves lowering tariffs over time, and making changes that will allow people to take advantage of the opportunities that the EPA provides.
“Because the link between trade, growth and development is not a simple one, open markets create opportunities for growth by making it easier to trade and by attracting foreign direct investment,” Malmström said.
Current exports from Botswana to benefit from the EPA will mostly be beef, copper ands nickel while other commodities such as diamond do not normal attract import duties to the EU.
She however noted that without an attractive business environment, the countries in the SADC region will not be able to take up the opportunities the agreement provides.
She said it also means having the right policies to allow entrepreneurship to flourish, stating that it covers everything from industry policy, to streamlined customs, to policies to promote investment.
“Creating that supportive coherent environment is not easy. And that’s why the EU has committed, in this agreement to supporting your efforts through development cooperation,” said Malmström.
According to the commissioner, the EPA has enormous potential and that it can improve people’s lives all across the region by connecting people to the global economy.
But, she said, it can only do that if all the countries work together to turn opportunities into realities. She urged the signing parties to commit to doing everything in their power to put the partnership into practice.
The agreement, which is the first comprehensive EPA that the EU signs in Africa, was between the EU, Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland. Commissioner for international cooperation and development, Neven Mimica reiterated that fully utilising the economic potential of the private sector and further strengthening the trade is critical for the new global development agenda of the Sustainable Development Goals (SDGs).
The EPA takes account of the different levels of development of each partner. It guarantees Botswana, Lesotho, Mozambique, Namibia, and Swaziland duty-free, quota-free access to the European market.
South Africa will also benefit from enhanced market access, going beyond the existing bilateral arrangement.
Furthermore, the agreement signed increases the flexibility of southern African producers to put together products from components from various countries, without the risk of losing their free access to the EU market.
“It also provides for a number of protective measures, for instance for nascent, fragile industries or for food security reasons,” a press release from the EU stated.
The southern African markets will open gradually and partially to EU exports, in an asymmetric way. In the process of diversifying their economies and broadening production, imports of certain goods are important for southern African countries – certain industrial parts, seeds and machinery, for instance.
The EU is the largest trading partner of the SADC/EPA group. In 2015, the EU imported goods worth almost €32 billion (P394.8 billion) from the region, mostly minerals and metals.
The EU exported goods of the nearly same value, mostly engineering, automotive and chemical products.