Donna Block
The breakthrough that led to the long-awaited trade agreement between the European Union and South Africa is being attributed to a final determination by European negotiators to give President Nelson Mandela a farewell present before he steps down.
”We tried to do the right thing. We wanted to see this concluded. We wanted to make sure it was done before Mandela left office,” said one EU official, speaking on condition of anonymity.
The determination stems from a promise made almost five years ago by the leaders of the EU to a newly inaugurated Mandela of generous economic assistance in the form of a landmark bilateral trade agreement.
That is what European leaders are now claiming to have done. However, the final details of the agreement won’t be released until Friday.
On Thursday both South African and European negotiators were very tight-lipped about how the stumbling blocks, such as Spain’s objections to South Africa’s use of the names ”sherry” and ”port” for fortified wines, were overcome.
According to Michael Laidler, head of delegation to the European Commission in South Africa, there was a ”hectic atmosphere” surrounding the final talks, as negotiators haggled over ”minor adjustments” to a draft agreement reached by European development commissioner Joao de Deus Pinheiro and South African Minister of Trade and Industry Alec Erwin in January. By yesterday morning, Laidler said everyone was ”very excited about the deal”.
German Chancellor Gerhard Schroeder and European Commission President Jacques Santer sent news of the agreement to Mandela in a letter.
The leaders of Europe’s two most powerful economies called the deal a ”historic agreement”, marking the first time the EU and a developing country have concluded such a broad sweeping trade pact, covering all sectors of the economy including agriculture.
The letter said: ”The EU regards this agreement as a further step towards consolidating the strong partnership between the EU and South Africa in the political, economic and commercial fields.”
The agreement, which took four years to negotiate, would ease the bloc’s talks on future trade and aid relations with the African, Caribbean and Pacific group of countries of which South Africa is a member, said Phillip Lowe, the EU’s chief negotiator.
EU officials said European and South African negotiators pulled out all the stops this week in order to meet the March 25 deadline set by the EU last December.
Spain, one of the staunchest opponents of the draft accord, softened its stance and retracted its threat to block the deal over the degree of access it accords to a range of South African agricultural products.
They had expressed concern about exactly how much access the draft deal would give to South African agricultural products since they claim that Spanish producers would carry too much of the burden of concessions made by the EU.
But EU negotiators have said Spain was very willing to compromise, emphasising that the approach of the Spanish in the last few days of talks has been ”very constructive”.
Some sources have attributed the talks’ progress to a commitment by South Africa to phase out the use of the terms ”port” and ”sherry”, which Spain and Portugal have insisted should be reserved exclusively for wines produced in Oporto, Portugal and Jerez, Spain. But what exactly this commitment entails was unclear at the time of going to press.
Some sources say the conditions remain the same as under the Davos agreement, which specified that South Africa had to phase out the words ”port” and ”sherry” for exports to most parts of the world within five years and within eight years for exports to neighbouring countries, such as Mozambique and Angola.
For the domestic market, the deal calls for both sides to agree acceptable terms within 12 years. After that, any denomination used by the South African producers has to be agreed by the EU.
However, according to one EU representative who wished to remain anonymous, ”member states are happy with the agreement for now, but when the 12 years are up they will seriously take up any reappraisals with the World Trade Organisation”.
In addition, under this accord, EU markets will be opened to about 95% of South African exports over a 10-year period. South Africa is to remove barriers to 86% of EU exports over 12 years.
However, liberalisation is considerably less in the agricultural sector.
Only 63% of South Africa’s farm products will have unrestricted access to EU markets with a further 12%, including table wine, allowed to come in duty free under special quotas.
Despite the problems, Lowe said EU governments had finally realised that ”while the deal was good for South Africa, it also offers major potential for EU exports”. Lowe said: ”This is one of the toughest negotiations ever seen.”
The deal is expected to boost Europe’s annual $19-billion trade with South Africa and reinforce political relations.
Until the EU summit, Spain, Portugal, France, Italy and Greece balked at granting concessions on some sensitive farm products to South Africa, fearing this could hurt their own agriculture interests.
But, Lowe said, all five nations had made compromises in the last stages of the discussions.
Now the aim is, as Mandela once said, ”to put ink in their pens” and their pens to paper before Madiba retires.