By IPS Correspondents
PORT ELIZABETH, South Africa, Oct 13 2007 (IPS)

The European Union (EU) needs to downscale its ambition to include the so-called ‘‘new generation’’ or Singapore issues in the economic partnership agreement (EPA) with southern African countries before the end of the year, says South Africa’s deputy minister of trade and industry, Dr Rob Davies.

While these issues can be postponed as they are not essential to the EPA negotiations, the negotiations on trade in goods can be completed before the December 31, 2007 deadline, Davies told IPS in an interview this week.

Even if the EU decides to push these issues further, South Africa is not prepared to ‘‘roll over’’ and accept an agreement that will not meet the development targets of SADC, Davies insists.

His remarks come after EU trade commissioner Peter Mandelson accused South Africa last month of having played a ‘‘deeply negative’’ role in the EPA negotiations. South Africa ‘‘was preventing others much less well off than them in the region from moving forward,’’ he said.

Botswana, Namibia and Swaziland showed more of a willingness to engage with the EU on the Singapore issues, Jorge Peydro-Aznar, the head of the political, economic, trade, information and communications sectors of the European Commission’s delegation to South Africa, reportedly said.

Trade in goods had to be addressed in the EPA negotiations because that was the issue that led to the World Trade Organisation (WTO) rejecting the preferential trade arrangements between the EU and the African, Caribbean and Pacific (APC) countries. The EU and the ACP were given until the end of the year to negotiate new agreements on trade in goods.

The Singapore issues are ‘‘services, government procurement and investment’’. The EU argues that economic development requires more than the liberalisation of trade in goods. The competitiveness of exported goods depends on the availability of competitive services in the financial, transport and telecommunications sector, according to an EU fact sheet released last month (September).

Regarding ‘‘government procurement’’, the EU wants African governments to give the same treatment to European companies as what they afford local African companies. Similarly, investment is about exempting foreign companies from special requirements when they invest in African countries.

These proposals first appeared in multilateral trade negotiations in the run-up to the WTO ministerial meeting in Singapore in 1996, hence the name.

In contrast to Peydro-Aznar, Davies says that the SADC EPA grouping has adopted a common negotiating position on the Singapore issues. SADC wants capacity development in the services sectors of their countries to enable companies to compete with highly resourced European companies. More time is needed to negotiate this, Davies says.

He points out that South Africa has not set out to be obstructive. Rather, South Africa’s position is based on the importance of capacity development in the services sector for SADC countries’ development goals.

Davies expressed concern that the EU’s position could have political ramifications-both inside the ACP grouping and outside with other EU trading partners.

It is essential that the EPA in terms of trade in goods is concluded before the end of the year. Failure to do so would have serious implications for those countries in SADC that are not categorised as least developed countries (LDCs). The LDCs (Mozambique, Angola and Tanzania) will fall under the preferential ‘Everything-But-Arms’ trade scheme if the EPA is not in place yet.

But non-LDCs such as Botswana, Namibia and Swaziland will see their trade preferences dwindle down to the level of the generalised system of preferences applicable to all developing countries if the EPA is not in place.

Another obstacle to the conclusion of the talks is the issue of a contractual assurance of development support from the EU. The EU’s current position on ‘‘Trade for Aid’’ needs to be changed to have a meaningful impact in terms of training, infrastructure development and other capacities, Davies says.

He adds that, irrespective of the EPAs and access to the EU market, a lot more needs to be done for development in these countries. Additional resources are needed to support some of the critical development initiatives in all the ACP regions.

Excerpt: