EPA Negotiations: Where do we stand? - SADC - last update : 15 December 2008

State of play

In SADC, an interim agreement was initialed by Botswana , Lesotho , Namibia (BLNS), Mozambique and Swaziland . South Africa , despite forming a customs union (SACU) with the BLNS countries, has not joined the agreement so far. Negotiations towards a comprehensive EPA are taking place and include South Africa .

Signature of the interim agreement was expected to take place by the end of 2008 but has been postponed, mainly due to the need for internal discussions in the region on how to move forward on outstanding market access offers. Improved offers are expected to be exchanged in December 2008. Further, there have been delays in translating the interim agreement into all EU languages. While Botswana , Lesotho and Swaziland seem to be prepared to sign the interim agreement, South Africa , Namibia and Angola demand changes to the agreement before signature. The European Commission has proposed early February 2009 as a date for signature.

In the negotiations towards a full EPA, outstanding issues remain on trade in services and investment provisions. The next joint meetings might be held in February 2009, possibly at the time of signature of the interim agreement.

-> For details on the current negotiations, please consult our monthly EPA negotiations update.

Background

Negotiations restarted in March 2007 after being stalled for one year while the EU considered the proposal by SADC to include South Africa into the EPA, which was accepted. Initially, the inclusion of South Africa was not foreseen, as trade between South Africa and the EC does not fall under the Cotonou preferential regime but is regulated separately by the Trade, Development and Cooperation Agreement (TDCA).

Taking account of the inclusion of South Africa into the SADC EPA negotiating group, protocol 3 on South Africa of the Cotonou Agreement was formally revised by a decision of the ACP-EC Council of Ministers of 20 December 2007 .

Progress in the negotiations between the EC and the SADC EPA region has been slowed down mainly by differences in view on trade related issues and services. The EC considers these to be essential parts of an EPA while SADC has been taking the position not to include any binding commitments on new generation issues (trade facilitation, competition policy, public procurement, intellectual property) due to lack of common policies and institutional capacities to implement policies. SADC, with South Africa being a key player in the region, preferred not to include comprehensive provisions on services at this stage. However, the parties to the interim agreement endorsed the commitment to negotiate trade in services. They further decided to negotiate on competition and government procurement only when adequate capacity has been built.

Trade regime from 1 January 2008

A first step agreement has been initialled between the EU on the one side and Botswana, Lesotho, Namibia , Swaziland and Mozambique on the other side.

Botswana, Mozambique, Swaziland and Lesotho initialled this interim agreement with the EU on 23 November 2007.

Namibia , which had voiced concern about several provisions on 5 December, initialled the agreement on 12 December 2007 . Namibia initialled the agreement on the understanding that its concerns would be addressed through the negotiations towards a comprehensive EPA. A statement in this regard is annexed to the agreement, outlining that Namibia will sign and ratify the full EPA only if agreement on outstanding issues is found.

Angola has expressed its " intention of acceding to the full EPA once this agreement is concluded", but has not initialled the interim agreement and exports under the EBA initiative since 1 January 2008.

South Africa has not initialled the interim agreement and currently continues exporting to the EC under the TDCA. The non-participation of South Africa might have implications on the implementation of the interim agreement, as it forms a customs union with Botswana , Namibia , Lesotho and Swaziland under SACU.

Interim agreement between the EU and Botswana, Lesotho, Namibia, Swaziland and Mozambique

Text of the agreement:
Interim Economic Partnership Agreement between the SADC EPA States, on the one part, and the European Community and its Member States, on the other part, published by the Council of the European Union, annex to the proposal for a Council decision concluding the agreement, 25 September 2008
-> see for the liberalisation schedules:
* Customs duties applicable on imports into the EU of products originating in Botswana, Lesotho, Namibia, Swaziland (BLNS) and Mozambique
(part 1) (part 2) (part 3) (part 4)
* Customs duties applicable on imports into Botswana, Lesotho, Namibia and Swaziland of products originating in the EC (part 1) (part 2) (part 3) (part 4) (part 5)
* Customs duties applicable on imports into Mozambique of products originating in the EC
-> see on rules of origin : Protocol 1 concerning the definition of the concept of "Originating products" and methods of administrative cooperation
-> Statement by Namibia

Summary of the agreement:
"On November 23 in Brussels senior negotiators from the European Commission and the Southern African Development Community initialled an interim Economic Partnership Agreement including a WTO-compatible market access schedule and provisions on development co-operation and other issues. This agreement will apply initially to the EU side and to Botswana , Lesotho , Swaziland and Mozambique on the SADC side. Angola made clear its wish to join as soon as possible. South Africa will determine its participation in the agreement in the coming weeks. This agreement was initialled by Namibia on December 11. EU and SADC negotiators confirmed that the agreement was open to other parties in the region to join when they wished. Both sides agreed to continue negotiations towards a full EPA in 2008 and a rendezvous clause is included in the agreement to this effect.

Goods Covered
The agreement allows for 100% liberalisation by value by the EU as of 1 January 2008 (with transition periods for rice and sugar) and 86% liberalisation by value by Botswana , Lesotho , Namibia and Swaziland . For 44 sensitive tariff lines liberalisation is envisaged by 2015. Three further lines will not be liberalised until 2018. The tariff offer from Mozambique covers 80.5% of trade, most of which is liberalised at entry into force. Some 100 additional tariff lines will be liberalised by 2018.

Goods Excluded
Exclusions focus on agricultural goods and some processed agricultural goods and are based chiefly on the need to protect infant industries or sensitive products in these countries.

Other features
A Development Cooperation Chapter has been included which covers cooperation on trade in goods, supply-side competitiveness, business enhancing infrastructure, trade in services, trade-related issues, Institutional capacity building, and fiscal adjustments. Parties agreed to negotiate on Competition and Government procurement only when adequate capacity has been built."
(Summary provided by the European Commission, 19 December 2007 )

Relevant documents and websites