Last week the EU provided its first official response to the South African/SADC proposal, put forward in June 2006, that South Africa become part of the Economic Partnership Agreement (EPA) negotiations presently ongoing within the SADC EPA configuration.
It seems that the EU is positive that South Africa be included in the SADC EPA with certain seemingly small, but serious reservations. Effectively the SADC EPA will be co-mingled with and thus replace the current trade, development and cooperation agreement (TDCA) between the EU and South Africa. This is a major shift in both the EPA configuration as well as EU-SA relations.
In market access the TDCA will form the baseline for market access commitments in the SADC EPA. This will of course scare the SADC EPA countries who have wanted a special dispensation within this rearrangement. The EU has indicated that tariff adjustments to the TDCA can be negotiated. The EU would thus differentiate between its market access arrangements with SA and new offers to the BNLS countries, Angola, Tanzania and Mozambique. The old EU paradigm of seeing SA as competitive to the point of being a fully fledged developed country remains. The EU will of course then not grant SA preferential market access beyond what the TDCA provides for. The BNLS countries will likely be able to negotiate improvements beyond the TDCA provisions, but this is not definite. The TDCA remains the baseline position and anything more favourable needs to be negotiated. This negotiation will be crucial to the other SACU countries as only a limited number of products currently traded by the BNLS are excluded from duty free access into the EU. These exceptions are sugar, fruits, meat and fish, all of which are traditionally sensitive to the EU. In defense of these sensitivities, the EU has indicated that additional concessions in these and other tariff areas will depend on African concessions in new generation areas of services, investment, government procurement, trade facilitation, intellectual property, the environment, labour, fisheries and competition. Needless to say the SADC contingent is not amused at this prospect.
The Financial Times reported this week that South Africa’s response to this idea was firm stating that it found the EU position to be ‘untenable’ and a ‘far-fetched suggestion’. This was confirmed by comments by South Africa’s chief trade negotiator, Carim, quoted on 12 December 2006 as saying that ‘The EU has established a division in the region. Our approach is a move to consolidate the region’s trade relations with the EU.’ Hilton Zunckel commented in the same article that splitting the SACU, intended to be a cohesive tariff area, in their trade relations with the EU would indeed be a cumbersome arrangement.
The full commentary by Business Day quoting South Africa’s chief trade negotiator, Xavier Carim and trade advisor Hilton Zunckel can be accessed the article entitled “SA fends off EU deals for SACU partners”.
