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EU Threatens Africa On Bilateral Trade

13 Sep 2007

THE European Union (EU) this week issued a stern warning to African countries negotiating economic partnership agreements (EPAs) with the union, saying that if negotiations were not completed by the end of the year, bilateral trade conditions between those countries and the EU would revert to the General System of Preferences (GSP), a more onerous trading regime.

This would result in countries now enjoying favourable terms under the Cotonou agreement to lose those preferences. A waiver on the agreement expires at the end of the year.

The implications of the EU's warnings for Southern African Customs Union countries are mixed. However, trading under GSP would not affect SA, as the country's trade relationship with the EU is governed by a separate agreement - the trade, development and co-operation agreement.

Lesotho, as a least-developed country, is also shielded, as its trade with the EU would switch to an EBA. However, Botswana, Namibia and Swaziland are vulnerable. Disconcertingly, the EU cited SA's "deeply negative" stance as holding up the crucial trade talks.

"Botswana and Namibia's situation is most precarious and Swaziland is also vulnerable. Their trade with the EU will have to revert to GSP terms, which has slightly more onerous rules of origin terms, but more importantly also does not cover all products as favourably, for example beef and table grapes," said Eckart Naumann, an economist and associate of the Trade Law Centre for Southern Africa.

Briefing the European parliament's international trade committee this week, EU trade commissioner Peter Mandelson said there will be no legal basis for the extension of existing preferential trade terms if the EPAs are not finalised.

"This deadline is not a bluff or some negotiating tactic invented in Brussels. It is an external reality created in the WTO in Geneva."

While talks with the Caribbean and Pacific regions are well advanced, prospects for concluding a deal before year-end with some of the African blocks are dim.

Mandelson singled out the negotiations with southern Africa as being of concern and in particular SA's role. He said the ability to deliver an EPA with southern Africa largely depended on the region's powerhouse.

Released on: 13 September 2007
Resource: www.allafrica.com