EU dismiss concerns of Southern African customs union

EU Trade Commissioner, Karel De Gucht, was not exactly diplomatic in his response to a letter from the member countries of the Southern African Customs Union (SACU is the world’s oldest customs union comprising Botswana, Lesotho, Namibia, South Africa and Swaziland) on March 31, 2010 – a letter that the author of this blog has obtained.
SACU had sent a polite letter to De Gucht to inform him that several SACU countries, particularly Namibia and South Africa, had concerns in regard to the current negotiations of the Economic Partnership Agreements (EPA’s), and to request that the EU would not demand the ratification and implementation of the EPA’s at the next round of negotiations without these concerns being addressed.

SACU countries face massive tariff revenue losses by signing the EPA’s, which in their current form would eliminate all tariff barriers on goods from EU – Swaziland could lose 30% of its revenue, Namibia up to 50%, something which would paralyze their already fragile economies.

South Africa in particular is trying to save SACU from falling apart. The customs union is one of the few vehicles for regional cooperation in the region, and helps promote regional trade as well as allowing its member countries to partake in negotiations with a strong and unified voice. South Africa has experienced a marked increase in its trade deficit with the EU after having introduced similar free trade agreements (the so-called Trade and Development Cooperation Agreement from 1999), whereas the EU has maintained import duties and quotas on “sensitive goods” where South Africa has a comparative advantage. The attempt to rescue SACU must also be seen in light of the trade complexities between South Africa and Swaziland, in particular, in recent years due to Swaziland – allegedly under pressure from the European Union – signing an EPA with the EU in violation of the rules of SACU; rules that explicitly prohibit individual members signing bilateral trade agreements.
De Gucht, however, dismissed all the concerns of the SACU countries offhand, and in an almost paternalistic tone, invited “the SADC EPA countries concerned to swiftly complete signature, notification and implementation of the interim EPA”, as well as somewhat hypocritical declaring that “in the meantime, the EU is more than willing to address all pending issues and concerns”. In other words, “Please sign the dotted line and implement the agreement – we will deal with any worries you might have over the document you have just signed when you have done so” – a rather chocking announcement from a party to an agreement and working relationship that is supposedly a relationship of equals. And especially since it is also contains an implicit recommendation to the members of SACU to break their own statutes.

The EPA’s:

The  Economic Partnership Agreements (EPA’s) are trade agreements between the EU and the ACP countries (78 countries in Africa, the Caribbean and the Pacific). The EPA-negotiations have been ongoing since September of 2002 and are still far from complete, even though they were originally meant to have been concluded ultimo 2007.

The EPA’s are supposedly meant to ensure that trade between the EU and the ACP countries is brought into accordance with present WTO regulations, as well as to support the development, poverty reduction, and integration into the world economy of the ACP countries. The negotiations have until now mainly focused on the former, however, as the EPA’s are more akin to bilateral trade agreements with no developmental focus, according to critics of the agreements. That the ACP countries have had to vigorously campaign to try and make sure that the liberalisation of the service area – not a requirement of WTO regulations – is not included in the final EPA’s, as demanded by the EU, would seem to confirm the lopsided nature of the EPA negotiations.

Links:

The article in Danish in Danish newspaper, Arbejderen 29 May 2010

The article in Danish in the 92-group‘s news letter, May 2010

Letter from De Gucht to SACU

Letter from SACU to De Gucht

“SACU to speak on EPA in one tone”, New Era, 30 March 2010

“EPA threatens to tear apart oldest customs union”, AllAfrica.com, 17 May 2008

“Efort afoot to save rickety customs union”, IPSnews, 2 October 2009

SACU website

Karel De Gucht”s website

Karel De Gucht at Wikipedia

About the EPA’s

EPA’s at Wikipedia

Trade, Development and Cooperation Agreement (TDCA)