EU trade agreement ‘not beneficial’ for SA

A senior African National Congress MP, Ben Turok, says the existing trade agreement between South Africa and the European Union has not benefited his country.

The trade, development and cooperation agreement (TDCA) “is not a good agreement. It has not brought benefit to South Africa. Europe has been the beneficiary,” Turok said in an interview. He is a member of Parliament’s portfolio committee on trade and industry.

The TDCA, concluded in 1999, has led to conflict over the use of brand names such as the South African wine label Nederburg because of its similarity to geographical names in Europe.

Last month, South Africa was included in the negotiations for economic partnership agreements (EPAs) currently under way between the EU and the African, Caribbean and Pacific countries (ACP). Before then, South Africa only had observer status.

Despite the TDCA between South Africa and the EU, the Southern African Development Community (SADC) EPA grouping requested that its most powerful member be included in the EPA talks. The EU’s approval of the request came nearly a year after it was made.

It has been speculated that South Africa insisted on joining the talks to try to reap benefits in the form of access to EU markets while gaining protection for its domestic products.

Trade scrutiny

South Africa’s inclusion in the EPA talks has put its trade policy under renewed scrutiny. South African trade negotiators were positive about the so-called Singapore issues when these issues were proposed by the developed states in the World Trade Organisation (WTO) in the 1990s.

The Singapore issues include investment and government procurement, which are about governments ensuring the same level of support and access for foreign as for local companies.

The inclusion of the issues was opposed by most other developing states in Africa and successfully blocked from the WTO talks. But the Singapore issues have resurfaced in the EPA negotiations, leading African trade ministers to express their objections.

Turok said South Africa is “not a charity. The trade relations with other countries in the region must be reciprocal. We are not going to subsidise the region. We must have complimentary relations.

“Every country has to defend its interests. There are few countries that do not do that. When it comes to trade, it is self-interest that comes first. It is sad, but we are not doing it in a selfish manner.”

Turok ruled out any suggestion that South Africa’s trade policy may be harming its neighbours. “South Africa has shown very clearly that its short-term and long-term interests do not affect its neighbours detrimentally. It would be very foolish for us not to identify with the region,” he said.

South Africa is both defending its interests and helping its neighbours, he added.

EPA grouping

The EU has also agreed to a Southern African Customs Union (SACU) EPA grouping being formed, which comprises Botswana, Namibia, Lesotho and Swaziland. South Africa is also part of the SACU EPA grouping, while Mozambique, Angola and Tanzania remain in the SADC grouping.

Despite South Africa’s admittance to the EPA talks, “the separate EU-South Africa deal is still valid”, said Richard Kamidza, senior researcher at the African Centre for Constructive Resolution of Disputes — a non-governmental research organisation based in Durban.

At the beginning of this month, the EU offered to lift quota and tariff restrictions on all ACP products to encourage the ACP states to conclude the EPAs by the December 31 deadline. South Africa was expressly excluded from this offer despite now being part of the SACU EPA grouping.

The EU cited as reason that South Africa produces globally competitive goods. Turok said “South Africa is a semi-industrial country. It produces a lot of goods. This is in contrast with most of the ACP countries who are producers of raw materials and commodities.”

South Africa, the economic giant of the continent, stands to benefit by working with the rest of the region, said Margaret Legum, an economist at the South African New Economics network, a pressure group based in Cape Town.

“It is difficult for SADC to go it alone against the EU,” she said. This is especially true for Botswana, Namibia, Swaziland and Lesotho whose economies are tied to that of South Africa through SACU.

Regional blocs

Campaigners have been unhappy with how the EU divided the regional blocs for the EPA talks. Especially the inclusion of a “southern and eastern Africa” EPA bloc has provoked criticism because it does not take into account existing configurations. “This is a divide and rule tactic by the EU,” Kamidza said.

Legum concurred that the developed states’ approach to Africa “has always been ‘divide and rule’. If you are stronger, you have an edge in negotiations. In trade negotiations, the preference is always for a weaker negotiating opponent.”

South Africa had no choice but to enter the bilateral TDCA with the EU, said Nkululeko Khumalo, trade researcher at the South African Institute of International Affairs, a research organisation attached to the University of the Witwatersrand in Johannesburg.

“The EU was unwilling to give South Africa the same preferential treatment it awarded to others in the ACP group. So it concluded a separate deal with South Africa,” Khumalo pointed out.

Matters are further complicated by overlapping membership among existing regional entities. “We are still far away from regional harmonisation,” said Kamidza.

He is also concerned about the lack of active participation by citizens affected by what is decided in the EPA talks. “We are not organised. Farmers, traders and fishermen, for example, are left out of discussions.”

The EU has proposed the EPAs as replacement for the preferential trade arrangement between Europe and the ACP states, which had existed for three decades. The EU is renegotiating the terms of trade with the ACP to bring trade relations with the bloc in line with WTO rules.

Other developing states have complained about being excluded from the preferential trade benefits in the EU’s 2000 Cotonou agreement with ACP states. The new trade regime has to be in place at the end of this year. — IPS

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Moyiga Nduru
Guest Author

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