South Africa must be treated as a developing country by the EU if the free trade agreement is to succeed, says ANC MP Rob Davies. Lynda Loxton reports
The European Union was sharply criticised this week for trying to treat South Africa as a developed nation rather than one with special development needs.
African National Congress MP Rob Davies, fresh back from a trip to Europe to attend a meeting of the EU and African-Caribbean-Pacific (ACP) joint assembly, said during the debate on the Budget in parliament that South Africa would be “naive to ignore all the clear signals that demands for reciprocity have replaced expressions of solidarity as the central feature of North-South trade agreements”.
He said the long-delayed decision by the general affairs council of the EU to approve a detailed negotiating mandate for a free trade agreement (FTA) between the EU and South Africa marked the end of one battle, but also the start of a much more difficult one.
The mandate of the EU sought a fully reciprocal trade agreement, on which South Africa would have to make concessions as well as receive benefits and it might have to give more than it took.
This was a far cry from the days when, at the height of Europe’s “solidarity” with the newly democratic South Africa, South Africa was hoping to be included in the Lome Convention, which provides special concessions such as duty-free access to the developing countries in the ACP. This was ruled out by the EU last year; it said a free trade agreement was the route to go.
Davies said the EU initially proposed that there should be a fully reciprocal FTA covering 90% of each party’s trade.
“Calculations made on the basis of figures in the draft mandate indicated that this would have required the EU to remove duties on only 7% of its imports from us (mainly agricultural products), but would have required us to remove duties on 46% of our imports from the EU,” Davies said.
But intense pressure from groups within the EU had resulted in a “sizeable list” of mainly agricultural products making up nearly 39% of our current exports to the EU that would be excluded from the FTA.
“So it now appears that we are no longer talking about opening up 46% of our market to gain 7% additional duty-free access to the EU, but something considerably less than 7%,” Davies said.
As a result, parliament should be sending a very clear signal to the negotiators that it would not feel comfortable ratifying something that did not take the specific needs and realities of South Africa into account.
“It is sometimes difficult to remember, when we see what is currently on offer, that all this arose because the EU said it wanted to help us,” Davies said.
South Africa accounted for only 1,9% of EU imports, while the EU supplied nearly 40% of South Africa’s imports. At the same time, South Africa’s gross domestic product was half that of Belgium, which was one of the smaller EU members with a quarter of South Africa’s population.
“Yet the EU, one of the most powerful trading blocs in the world, appears to be treating us in this negotiation as though we were just another competitor without the special development needs it claims to support,” Davies said.
“Indeed, up to now, it has been much more sensitive to the claims of special interest groups in Europe than it has to its professed commitment to promoting development in Southern Africa.”
Davies said that although South Africa was aware of Europe’s sensitivities and concerns about the effect of an FTA on its own production and jobs, these applied even more so to South Africa with its 40%-plus unemployment.
“We accept that creating competitive industries is integral to this process, but this necessitates restructuring, which will require time and resources. We are certainly not there yet.”
Tariff reductions already implemented under the Uruguay Round of trade agreements were affecting some South African industries badly and further reductions of the kind being envisaged could lead to further job losses.
Davies said that the EU-ACP joint assembly had passed a resolution criticising the delays in trade negotiations with South Africa and the EU’s increasingly protectionist stand. It also urged that the non-trade Lome-type benefits promised South Africa should be “fast-tracked” because of the delays in trade negotiations.