EPA: A window for Botswana to boost exports
Isaac Pinielo | Friday June 17, 2016 14:26
The EPA has been under negotiations since 2004, focusing on trade in goods and services. The discussions for the goods chapter between the EU and the SADC EPA countries were concluded in July 2014.
The trade agreement includes Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland, known as the SADC EPA group, which represents six out of 15 members of SADC.
Botswana Meat Commission (BMC) communications and public relations manager, Brian Dioka noted that Botswana has been benefiting from the EPA before it was signed, especially on beef exports.
He stated that the signing gives Botswana the chance to diversify its economy from non-mining and to increase exports to the EU.
“This guarantees continuity of our business undeterred and it is an assurance that the country will continue exporting to the EU,” he said.
He said the EU remains Botswana’s lucrative market noting that with the EPA, Botswana and Namibia can be the biggest exporters in the region.
Dioka further dispelled beliefs that the envisaged exit of Britain from the EU would affect the country’s beef exports, stating that the exit will not change demand, but the channels of export.
“We have a good product to sell and we have historic ties with Britain, so their exit from the EU will not have much impact on our beef exports,” he said.
According to the Ministry of Investment, Trade and Industry, the agreement would eliminate tariffs and barriers to participating nations in an effort to promote “more seamless and efficient” trade.
Chief trade officer at the ministry, Gemma Mbegabolawe said 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.
The EPA is a development-oriented free trade agreement. It takes account of the different levels of development of each partner and guarantees the participating countries duty-free, quota-free access to the European market.
The ministry reiterated that the agreement will create a stable and reciprocal, but nevertheless asymmetrical trading relationship between SADC EPA group and the EU.
“Botswana exports will be able to access the EU market duty-free (and) quota-free. Botswana can export as much of its products to the EU market as it can, both industrial and agricultural goods,” said the ministry.
It further stated that Botswana can apply export taxes to selected strategic products, adding that the EU will eliminate export subsidies on agricultural goods destined for the SACU market, restored safeguard, safety-net for Botswana, Lesotho, Namibia, and Swaziland (BLNS) sensitive products, which had previously been liberalised and reduced to zero tariffs under the Trade, Development, and Cooperation Agreement between South Africa and the EU, which the BLNS de facto implements in SACU.
In this way, Botswana will be able to respond to damaging surges in EU exports into its market by taking these safeguard measures.
Botswana is bordered by Namibia, South Africa and Zimbabwe and most merchandise trade is shipped via rail or truck through South Africa.
In March 2016, total exports were valued at P6.39 billion, with 85.4% (P5.46 billion) attributed to exports of diamonds.
Copper nickel contributed 4.5 percent (P290.4 million), machinery and electrical equipment contributed 3.4 percent (P214.6 million), and meat and meat products contributed 2.1 percent (P136.1 million) to total exports during the month under review.