Namibia: EU Backs Off on EPA

According to Marc Maes, trade policy officer at 11.11.11, the move signals an "EPA-fatigue" in Europe. 11.11.11, the Flemish North-South Movement working against poverty, protested about the European Commission's treatment of Namibia.

"The EU has no intention to put undue pressure on Namibia to sign and implement the interim EPA," de Gucht wrote in a response to a 18 June letter by 30 influential European civil society organisations (CSOs).

Negotiations for an EPA have dragged on since 2002 when the Cotonou agreement redefined trade relations between the EU and African, Caribbean and Pacific (ACP) countries according to World Trade Organisation (WTO) directives.

In their letter the CSOs argued that Namibia is put under severe pressure by the Europeans to move forward with the negotiations, to the detriment of their development goals.

"The signing of the interim EPA would have serious impacts on agricultural and industrial development in Namibia. Among other consequences the country would have to forfeit the policy option of using export taxes on raw materials and an important incentive for value addition of raw materials and as a potentially important new source of income," noted the CSOs.

In his reply de Gucht tried to allay their concerns, stating: "The EU will continue to engage with Namibia, as well as with the whole SADC EPA group in a constructive spirit as in the past. The objective is to negotiate an agreement that serves the region's best interest." SADC stands for the Southern African Development Community.

The commissioner also emphasised the benefits of duty-and-tariff free access for the countries of the region.

But, according to Maes, the realisation has dawned in Europe that the negotiations need to be concluded before the Third Africa-EU summit in November 2010 in Libya.

"There is an EPA-fatigue manifesting itself in Europe after eight years of intense negotiations. The European Commission has taken on extra responsibilities, such as developing a comprehensive investment policy. It is eager to close this chapter and will be keen to make the Libya summit a show of harmony not marred by tense negotiations on trade," Maes told IPS from Brussels.

He predicts the EU will bow to the realities on the ground in Southern Africa, putting some of the more contentious demands on the backburner until the region is ready to negotiate clauses on liberalisation of services and investment.

"From the outset the obstacles in the talks were caused by the EU's assumption that the EPAs are the best option for development of the ACP countries," says Maes. "But these negotiations are not at all about what is best for the countries and rather about to what extent they are willing to sign up to the European recipe."

According to Maes, the negotiating mandate the EU uses is far beyond what the Cotonou agreement requires. "These very poor countries simply don't have the infrastructure, institutions and regional economic integration to support such a far-reaching trade agreement."

Some of the provisions, like the contentious most favoured nation (MFN) clause - that requires SADC EPA countries to extend the same preferences to the EU it grants to third parties under future trade agreements - have little to do with sustainable development, argues Maes.

"It's a purely offensive strategy to protect European interests and to prevent that, for instance, Africa turns around and offers the US a better deal."

The decision by the SADC EPA configuration's trade ministers gathered in Gaborone in June 2010 to postpone the liberalisation of services till 2014 will certainly be revisited by the EC, expects Maes. "This is not a done deal, the EC will try to move the services issue forward."

Still he expects the EC is eager to quietly find a way out of the predicament before November, with talks set to resume in August. "I hope this means that after eight years of negotiations the EU finally accepts it has to make a deal based on what is politically, economically and institutionally possible in the countries."

Namibian trade analyst Wallie Roux also expects that the region will use the Libya summit to increase pressure on the EC to close a deal. "The negotiating strategy of Namibia and the other countries will be to try to corner the EU in the short term and to engage the commission as soon as possible," he predicts.

As for the contentious issues, Roux foresees a problem with the definition of parties, which practically requires the insertion of Mozambique and Angola into the Southern African Customs Union (SACU), as well as with the MFN clause.

"Currently the clause applies to all countries that constitute 1.5 percent of world trade. If the EU is willing to move this up to five percent, at least South-South trade will be somewhat excluded."

Similarly, the EC-backed tripartite agreement among the East Africa Community (EAC), SADC and the Common Market for Eastern and Southern Africa (COMESA), which comprises three different EPA negotiating blocs, is still a long way off, says Roux.

"The EU will have to resign to the fact that such a free trade area can only be discussed when the regions are ready."

Article published courtesy of IPS Africa