JOHANNESBURG. Pressurised by industry interests and not exactly a natural ally to neighbour South Africa the Namibian government did what was expected, it followed the money and signed an interim Economic Partnership Agreement (EPA) with EU ahead of the 31 December deadline.
If it hadn’t Namibia would have lost out on € 52 million in export of mainly beer, beef and table grapes to EU, already from next week. That would have sent a shockwave across Namibia’s economy.
Namibia’s signing, means that South Africa is out on a limb, it’s on its own among its fellow Southern African Custom Union members. The others have all signed.
There are voices that say EU, through the way it has pursued these negotiations, have caused a serious rift among SADC and Sacu countries in Southern Africa – that they effectively can drift apart.
According to South Africa those who signed were bullied by EU to sign on the dotted line, as they otherwise, just as Namibia, would have too much to loose and nothing to gain – at least not short-term.
According to EU’s trade officials South Africa basically tries to protect its own interests in Africa, without giving anything back.
Certainly, South Africa doesn’t want to give EU free access to Africa’s budding services industry – in particular it doesn’t want to see competitors to the likes of MTN and Vodacom have free and open access to the continents most successful sector over the past ten years, the mobile telecom industry.
South Africa isn’t all alone. There are SADC countries and countries belonging to other trade blocks in Africa that all are unhappy about EU’s demands for free access to Africa’s services sector, as well as the implementation of free trade of products in both directions, albeit with a 15-25 year phase-in period.
What EU tries to dress up as a major conceccionary deal, on the other hand, is essentially an extension of the old Lome/Cotonou trade agreement with Africa, Pacific, Caribbean (ACP). What’s new is that EU has to find a format that fits with World Trade Organisation regulations.
Whats on offer is (continued) free access to EU, except for sugar and rice, where there is a lead in period, in exchange for the gradual introduction of free trade also in the opposite direction – as well as a $ 1.5 billion per year aid-trade adjustment package.
The EPA negotiations with ACP countries have been going on for five years. With the deadline looming fast and furiously, with a habitual impasse and no realistic chance to finalise them, EU instead dangled an interim EPA in front of increasingly desperate counterparts.
And those with an awful lot to loose, like Namibia, swallowed the bait. Those that had less to loose are still hanging out for something better.
As for South Africa it already has an agreement with EU and can afford to rebel rouse and try and conspire with other African countries. It does not stand to loose anything.
Europe is as usual divided. In particular non-governmental activist organizations, like Oxfam, are critical to EU. They want EU to accept non-committal asymmetry. Free trade with products and services in one direction, as high tariffs as development countries want in the other direction, for as long as they like.
A top level EU/ACP meeting in February may find a way forward. But don’t bet on it. The EPA’s are pawns and part of a larger, much trickier WTO picture where e.g. agricultural subsidies is but one of many seemingly impossible hard nuts to crack.
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A lot of posturing and many hard words have been said about the EPA’s. Negotiators on all sides are exhausted and disappointed that they failed to deliver something substantial ahead of the 31 December deadline – or at least something coherent ahead of the EU-Africa Lisbon summit.
As with all trade negotiations there are very real, tough and hard realities behind every word, comma and period.
Everyone is asking for too much too soon, giving too little, too late.
EU wants to sneak in more free trade in the opposite direction and immediate free access to Africa’s services sector – the latter is a new addition that wasn’t there before and as such a reflexion that something is going in the right direction. EU asks for too much. It should give the ACP countries a lead in period – for services and strategic industries.
South Africa wants to muzzle in on an ACP deal and get the same opportunities as they, despite that it already has a deal with EU (that isn’t bad at all). South Africa believes that it should have a bit of an Africa security and piece dividend – as the country is the driving economy in Sub-Sahara Africa and the only country that actually invests serious money across the continent. Not a bad idea, but that kind of subsidy should not come through EPA.
African countries that have not yet signed EPA’s are asking for protection that in the end will only make their own industries uncompetitive. A protective period, yes, but not for too long and only if their business- and industrial environment is appropriately reformed. No protectionism just for the sake of it.
An awful amount of posturing. And yes though stuff. But not impossible to overcome. The long-term view must be to trade aid for a more open trading environment. Africa has everything to gain from that, but rightly need assistance to get there.
As for SADC and Sacu, no they won’t fall apart, but will become less relevant. If South Africa wants that it should stick to its guns, if it wants to dominate from within, it should find an excuse to get back in – sign an EPA it probably wont do.
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