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Namibia happy with EPA deal — for now

Namibia held out longer than the majority of its counterparts in Southern Africa before signing the interim economic partnership agreement (EPA) with the European Union, managing in the process to squeeze some concessions from Brussels after intense diplomatic efforts.

Namibia and South Africa initially refused to sign in early December, which sent shock waves through the agricultural sector. Both countries belong to the Southern African Development Community (SADC) and are members of the five-nation Southern African Customs Union (Sacu).

Only 34 African, Caribbean and Pacific (ACP) countries initialled the provisional EPA, among them about 14 African countries, including Botswana, Swaziland, Lesotho, Zimbabwe, Mozambique, Ghana and Côte d’Ivoire. Namibia finally signed on the dotted line on December 12, 19 days before the deadline.

The government signed on condition that its concerns be addressed during the extended EPA negotiations in 2008. If agreement is not reached because the EPA does not add value to its relations with the EU, Namibia will not go along with it.

Namibian beef producers and grape growers experienced two dramatic weeks during December, worrying if they could still export their products to the EU after January 1 2008 when the interim EPAs came into force.

The existing Cotonou agreement for preferential trade between the ACP countries and the EU ended on December 31 after seven years, as it was “incompatible” with World Trade Organisation (WTO) rules.

Namibia yearly exports products worth about €30-million to EU countries. These include 9 600 tonnes of deboned prime beef cuts and 600 tonnes of mutton. About 18 000 tonnes of its annual production of 22 500 tonnes of table grapes and about 500 000 tonnes of fish a year go to the EU.

“The decision of our government to eventually sign the interim EPA follows further liaison and discussions with the European Commission during the EU-Africa summit in Lisbon, Portugal, on December 8 and 9,” Deputy Trade and Industry Minister Bernhard Esau said last month — a day after Namibia’s ambassador to Brussels Hanno Rumpf put his signature to the deal.

“We obtained confirmation from the European Commission that the interim EPA would be revisited during the next stage of negotiations in 2008 towards the comprehensive EPA to address concerns of Namibia and other SADC states,” Esau added. These concerns are about the EPA’s long-term detrimental policy implications for Namibia.

“These include the non-negotiable most-favoured nation [MFN] treatment that the EU seeks and the freezing of export taxes and levies, which [affects] our ability to use incentives for local value addition and manufacturing,” he added.

The MFN treatment is about extending to the EU all the benefits of any future trade agreements that Namibia may enter into with other countries.

Namibia’s other concerns were the abolition of restrictions on cereal imports from the EU and inadequate infant-industry protection.

The EU also demanded the abolition of restrictions on local content in manufactured and processed goods; and free movement of EU goods within the SADC EPA states “in a manner that may not be compatible with Sacu or would have implications for the modalities [conditions] for a future customs union for all SADC member states”.

New conditions

What severely irritated the SADC negotiators was that the European Commission inserted new conditions into the negotiation text during talks on November 22 in Brussels. “These new requirements had not been anticipated by the Namibian side, who had to consult with the government in Windhoek,” a SADC diplomat said.

Namibia grows its own wheat, maize and pearl millet. While insufficient quantities are produced, it restricts imports in these categories.

According to Malan Lindeque, permanent secretary in the Trade and Industry Ministry, Namibia “first consumes local cereals before we open the borders for imports. If wheat or maize would come from the EU, which wants us to abolish these restrictions, this spells disaster for our local producers and millers. The EU assured us that our concerns will be negotiated in 2008.”

So far, the deal states that Namibia must provide reciprocal market access to the EU by July 1 2008; slash 86% of cumulative tariff lines by 2010; and slash 44 tariffs by 2015 and another three by 2018. Further details were not disclosed.

The Namibian government managed to protect the country’s lucrative local beer production from EU imports for now. Namibian beer is brewed according to the German purity law, a remnant from the former colonial master. Namibia was a German colony between 1884 and 1915.

Locally produced pasta and long-life milk are also “safe” — for the time being — and producers need not fear cheaper EU products.

“The EU has underestimated and misjudged SADC and probably thought it could steamroller its way through the EPA negotiations,” said local trade expert Wallie Roux. Due to Namibia’s hard-nosed stance, it and SADC are “in a better position now to negotiate”.

The thorny “new generation” issues of trade in services, investment, competition and government procurement will be looked at when negotiations for the full EPA start. SADC countries first want to streamline these policies within the region before allowing EU competition.

According to Lindeque, the European Commission and its counterpart, the African Commission, will meet early this year “to first work out the modalities for the EPA negotiations”.

“We are such a small country, with just two million inhabitants, but the compromise reached for now is very good. It was David against Goliath,” said Raimar von Hase, president of the Namibia Agricultural Union.

“Without the signing of the interim EPA, our beef and grapes would have faced increased import tariffs in the EU of over 90%. This would have been detrimental for agriculture, with such consequences like a drop in income and job cuts in the sector.”

The Namibian government announced earlier it would compensate producers to a certain level for incurred losses, were the interim EPA not signed.

The Namibia Development Trust and the Namibian NGO Forum had earlier called on the EU to “protect SADC producers and regional markets” and to allow SADC to pursue its development strategies. — IPS

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