The European Union is too focused on commercial interests, undermining efforts to forge a new, fairer trade pact with South Africa, Trade and Industry Minister Rob Davies said on Tuesday.
The 27-nation EU has concluded economic partnership agreements (EPAs) with several Southern African countries, including top diamond producer Botswana, but South Africa, Namibia and Angola have not yet signed because of concerns over the text.
”What’s clear to us is that although the stated intentions in the EPA process is to provide some legal basis to enhance access into the European Union market … it’s also overlaid with a series of trade-related obligations,” Davies told Reuters in an interview.
”And we do see those trade-related obligations as deriving from commercial ambitions of the European Union, partly in relation to the competition with China and India,” he said.
Davies cited an EU document which referred to addressing regulatory matters so that tariff concessions to European companies could become a reality.
”It’s those kind of clauses which have proved to be the most difficult ones [to overcome],” he said.
Emerging economies China and India have not been as severely affected by a global economic downturn as the EU and United States and have made inroads into Africa; in many countries overtaking Western countries as the main investors.
China has overtaken the US as Africa’s top trading partner, investing $107-billion last year; a tenfold increase in the past decade.
South Africa, which counts the EU as its largest trading partner, has been critical of an EPA process it feels may undermine trade integration in Southern Africa, especially if each country in the region has different trade deals with the European bloc.
Davies said while progress was seen on export taxes and protection for new industries, negotiations between South Africa, Angola, Namibia and the EU would continue to iron out some fundamental concerns.
”We want to conclude negotiations on some of the outstanding concerns that include the more favoured nation clause and … the way in which parties are defined,” Davies said.
This definition, said Davies, referred to the ability of the EU to act against all should one country default on something, while Southern African Development Community states would need a consensus if there was any dispute with the EU.
Davies, noting a change of approach between the EU’s former trade commissioner Peter Mandelson and incumbent Baroness Ashton, said EPAs would likely be on the agenda at next month’s SA-EU summit in South Africa.
”There has been more of a willingness to give and take,” he said.
But Davies said Africa’s strongest economy, in its first recession in 17 years as lower global and domestic demand hurt manufacturing and exports, would not sign an unfavourable deal to help prop up the economy.
”South Africa will not sign just anything … we will have to look at what evolves from the negotiating process and then make our decision on that,” he said. — Reuters