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TRADE-SOUTHERN AFRICA: EPA Talks Will Miss Latest Deadline

Servaas van den Bosch

WINDHOEK, Nov 5 2010 (IPS) - While a trade deal between the European Union and Southern African countries is close it will not be concluded before the end of this year. In the meantime, South Africa remains in pursuit of an ambitious regional integration agenda.

Namibian trade minister Hage Geingob has confirmed that the Dec 2010 deadline for a economic partnership agreement (EPA) with the EU that Southern African states had set themselves in Gaborone, Botswana, earlier this year will not be met.

“Even for the EU, time is not so much the issue anymore,” added South African trade minister Dr Rob Davies. “They are more interested in investing in a strong relationship.”

The ministers spoke after a bilateral meeting between South Africa and Namibia’s heads of state on Nov 4 in Windhoek. At the meeting, South Africa’s President Jacob Zuma voiced confidence in “a speedy resolution” of all outstanding issues in the cumbersome negotiations.

“Following our recent interaction with the European Union, we are convinced like never before that disagreements with the EU have been narrowed and we are on the verge of finalising an agreement that recognises our developmental challenges while at the same time creating opportunities for mutual benefit,” said Zuma.

Despite pressure from Brussels Namibia refused to sign an interim trade deal, arguing that the forced opening of the Namibian market to more competitive EU companies would severely curtail its future economic growth.

Although Botswana, Lesotho and Swaziland signed an interim EPA, South Africa backed Namibia in holding out for a better deal.

“South Africa stood by Namibia in the EPA negotiations,” Geingob pointed out. “As a result we have turned the negotiations for this interim EPA around and can instead look forward to negotiating a full EPA with the European Union.”

Davies added: “We decided to participate in the EPA process even though South Africa already has the TDCA (Trade, Development and Cooperation Agreement) with the EU. We feel the EPA is very important.

“In our estimation the EPA, as it was originally tabled, would have done enormous damage to the development of the region. The final EPA will include more than the interim agreement but it is important not to overload the agenda now by adding a new set of obligations. It is time to move ahead with this agreement,” said Davies.

Meanwhile South Africa is pursuing the economic integration of African states as “an organic process evolving from regional economic communities that will logically fuse into a single gigantic economy in line with the dictates of the Abuja Treaty”, in Zuma’s words.

The 1991 Abuja Treaty is a “roadmap” to an African economic community.

This is the third time this year that Zuma visited neighbouring Namibia, which holds the chairpersonship of the Southern African Development Community (SADC) and is home to the Southern African Customs Union (SACU) Secretariat.

The visits are aimed at speeding up the process of regional integration. South Africa wants to use SACU as a building block for the mooted tripartite free trade area spanning 26 countries and 578 million people.

“We should spare no effort in increasing the momentum of integration between SADC, COMESA (Common Market for Eastern and Southern Africa) and EAC (East African Community),” Zuma declared.

“This tripartite economic project holds real prospects for contributing to continental efforts aimed at increasing intra-African trade.”

Davies added that, “amidst continued depressed economic conditions, Africa is emerging as the next economic success story. Individually African countries do not have the size to compete in the global arena but as a group we can. This is why we have to promote regional integration,” he added.

A June 2010 report by the McKinsey Global Institute (MGI), “Lions on the move”, stated that Africa’s collective gross domestic product of 1.6 trillion dollars equals that of Brazil and Russia. MGI is the research arm of McKinsey and Company, a management consultancy firm that advises companies.

Increased macro-economic stability and political reforms, combined with the commodities boom and the emergence of a middle class, convinced the report’s writers that the economic momentum is here to stay.

The South Africans see reform of SACU as instrumental to regional integration. Tshwane (formerly Pretoria) wants to change the customs union from a pool of revenue for the BLNS countries (Botswana, Lesotho, Namibia and Swaziland) to a development fund.

Davies reiterated this stance in Windhoek: “We must turn SACU into a tool of development promotion. SACU could be instrumental in creating infrastructural projects and adding beneficiation to the mineral and agricultural sectors.

“We have to ask the question how the smaller economies can benefit from the large South African economy on their borders and vice versa. We need to create a value chain between the countries.

“When the duties were dropped in SACU it did not make a difference to the balance of trade between South Africa and the rest. So, what we really need in SACU is to produce more goods and services,” concluded Davies.

At the bilateral meeting, South Africa announced its intention to be part of the trans-Kalahari railway line that will connect the Mmamabula coalfield in Botswana and South Africa’s Waterberg coalfield with the port of Walvis Bay.

Davies explained: “Transport routes are becoming more significant all over the continent. It is important to progress with the development of a transport corridor programme.”

Namibia and South Africa also strengthened their cooperation on transfrontier conservation areas, industrial standards, air services, green energy projects and development of the Kudu gas field in Namibia.

The countries will also work together on adding value to minerals. Davies singled out titanium: “A ton of titanium dioxide sand, mined in South Africa, will maybe fetch a couple of thousand dollars, but if we can turns this into titanium alloy the revenue jumps to over 100,000 dollars per ton.”