Business Day (Johannesburg)
10 December 2007
Mathabo Le Roux
Johannesburg.
EUROPEAN leaders admitted yesterday that efforts to conclude new trade agreements between the European Union (EU) and Africa had foundered, as delegates from the two continents wound up a summit that was supposed to forge a new relationship.
Asked how the negotiations on the economic partnership agreements (EPAs) were going, Italian Prime Minister Romano Prodi said: "Not easy. The African countries are more and more afraid to be in some way pushed down by sudden competition, so they are asking for guarantees."
European Commission president Jose Manuel Barroso also said the EPA negotiations were "difficult", while acknowledging the concerns of African states.
The EU is seeking new trade deals with African, Caribbean and Pacific countries to replace the current preferential system that has been ruled illegal by the World Trade Organisation (WTO).
The EPAs would require the 78 African, Caribbean and Pacific countries to open their markets to European goods gradually.
In exchange, they would be granted open access to European markets from January 1 next year, except for rice and sugar.
Fifteen African, Caribbean and Pacific countries -- 13 of them in Africa -- have initialled interim trade accords with the EU, short of full EPAs, to satisfy WTO rules from next year.
Others fear that opening their markets, even partially and progressively, to cheap European goods could damage their economies.
A country that might be severely affected by not signing is Namibia. Observers are predicting severe economic fallout for Namibia after that country's refusal to initial an EPA with the EU. But there could be unintended consequences for SA as well.
Namibia's beef, grape and fish exports could virtually cease from next year as it loses preferential access to the European market .
Namibian exporters will have to divert products to alternative markets and it is widely expected that SA would become its export destination of choice.
AgriSA's director of economics and trade, Johan Pienaar, said South African beef producers were concerned about the situation, but consumers were likely to benefit with beef prices expected to drop sharply. Namibia exports beef worth R350m to the EU annually.
The EPA is intended to replace the Cotonou agreement, under which African countries now trade with the EU. In the absence of a deal, trade would revert to the stricter Generalised System of Preferences , but with meat not covered by the system, Namibian beef exports would be governed by most favoured nation terms under which tariffs are even steeper.
Jurgen Hoffmann, trade adviser to the Agricultural Forum of Namibia, said on Friday that beef products would attract import duties of between 63% and 120%, as opposed to the average 8% duty paid now.
As a result, beef prices in Namibia are estimated to fall 25% next year and 50% the following year, he said.
The Namibian government has undertaken to compensate beef producers from state coffers for half of their losses, but that would be cold comfort for small-scale producers in rural areas, who stand to lose most.
The situation could close down Namibia's beef industry.
But it is not only beef that is under threat. Namibia will also lose preferential market access for fish and grapes. Its grape exports, worth millions and growing annually, are likely to be displaced by main competitors SA and Chile. Fish, which entered the EU duty-free under Cotonou, will attract duties of up to 20%.
Trade commentators last week were shocked by Namibia's decision not to initial the deal.
The country, along with SA, opted out of the EPA because demands were too onerous.
"I am completely stunned that they never pre-empted this," trade lawyer Hilton Zunckel said.
But Namibia could still get relief from a clause in the Cotonou agreement, which stipulates that the EU's trading partners should not be worse off under a new trade regime. With Sapa-AP, Sapa AFP
No comments:
Post a Comment