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EU-Southern Africa Economic Partnership Agreement Takes Effect

A long-awaited Economic Partnership Agreement (EPA) between the EU and select southern African countries came provisionally into effect this week, officials confirmed on Monday 10 October.

The EPA was signed in June by the EU and six member states of the Southern African Development Community (SADC) – Botswana, Lesotho, Mozambique, Namibia, South Africa, and Swaziland. It was approved by the European Parliament in September. (See Bridges Africa, 14 June 2016 and 16 September 2016)

At press time, the agreement had been ratified domestically by five of the six countries, with Mozambique still in the process of doing so.

According to EU Trade Commissioner Cecilia Malmström, the deal aims to facilitate sustainable economic growth in southern Africa and reduce poverty in the region.

“The EU and SADC need to shape our trade relations so we give southern African businesses and entrepreneurs the best possible chance of succeeding,” she said in a blog post announcing the news.

Tariff elimination, rules of origin

The EPA will ensure immediate duty- and quota-free access to the EU market for 100 percent of exports – excluding arms and munitions – from all SADC EPA countries except South Africa.

South Africa will see 96.2 percent of tariffs lifted in full, and 2.5 percent in part. In turn, the SADC EPA countries will fully or partially lift tariffs on around 86 percent of imports from the EU, allowing for some more sensitive items to retain their existing tariffs. Mozambique, however, is due to lift duties on 74 percent of tariff lines.

The EU is the largest trading partner of the SADC EPA group. According to the EU, the decision of accepting this degree of asymmetry was made after taking into account the different levels of development of the trading partners.

EU Trade Commissioner Cecilia Malmström
EU Trade Commissioner Cecilia Malmström

According to the European Commission, the accord also allows for some “safeguards” to help temporarily stem the flow of EU imports into the SADC EPA countries should these increase at such a scale and pace that they put domestic industries in jeopardy.

Select newer industries in the southern African countries that require more time to develop will be initially excluded from liberalisation through a so-called “infant industry” clause. EU officials have also touted the “rules of origin” terms of the accord as being designed to be particularly flexible, as part of a larger effort to support the local development of value chains, in particular regarding textile products.

Sustainable development, regional integration

The EU EPA process – both for the SADC EPA group and various other African country groupings – follows on the 2000 Cotonou Agreement, which is due to expire at the end of the decade. For the accord with the SADC countries, the Cotonou Agreement’s sustainable development provisions will remain in place, and the new deal affirms that no trade or investment liberalisation measures will require lowering any social or environmental protections.

The agreement also aims to advance regional integration, such as by harmonising the Southern African Customs Union (SACU) tariffs levied on imports from the EU and requiring that each SADC EPA member accord to its fellow SADC EPA countries any improved terms that it grants to the EU.

The various other EPAs that the EU is negotiating with other African countries are at a range of different stages, with some being provisionally applied while others are in the signature, or negotiating process.

Source: ICTSD