Namibia's fate on EPAs to be decided soon

19 Sep 2013 09:10
By Maggy Thomas
WINDHOEK, 19 SEP (NAMPA) – Namibia's fate in the Economic Partnership Agreement (EPA) with the European Union (EU) will be decided when the last EPA negotiations resume at the end of September in South Africa.
EPAs between the EU and African, Caribbean and Pacific (ACP) regions are aimed at promoting trade between the two groupings, and through trade development, sustainable growth and poverty reduction.
These agreements are set out to help ACP countries integrate into the world economy, and share in the opportunities offered by globalisation.
For well over 30 years, exports from the ACP countries were given generous access to the European market.
Yet, preferential access failed to boost local economies and stimulate growth in ACP countries, and the proportion of EU imports from ACP countries dropped from 7 per cent to 3 per cent of EU imports.
Minister of Trade and Industry Calle Schlettwein told Nampa in an exclusive interview on Thursday that he is optimistic that the outcome of the EPA negotiations will give each partner benefits, instead of the winner-takes-all approach.
During the negotiations, the Southern African Development Community (SADC)-EPA group, led by Botswana, will meet with the European Commission representatives on behalf of the European Union.
The Namibian team will be led by Trade and Industry Permanent Secretary Malan Lindeque.
The negotiations are critical, and Namibia needs to find an appropriate balance in making and getting concessions into the EU market.
Key to successful negotiations for Namibia are in the areas of Rules of Origin, Regional Industrialisation and Integration.
Namibia also needs to refine its policy on export taxes, customs’ arrangements, bilateral safeguards and agricultural safeguards.
Namibia currently enjoys free access to the EU market, and no duties are paid on Namibian products, whether industrial or agricultural, at EU borders. Namibia is also not subject to quotas.
This regime is based on a temporary instrument, which will end on 01 October 2014.
The EU offers Namibia duty-free, quota-free access to the Union's markets, but the EU in return also wants this agreement balanced.
“Hopefully during the negotiations, we will be in a position to resolve those issues that remain sticky points in the process. Our goal, of course, is to remain with Europe in a trade partnership agreement.
Europe is a very important market for us, and this is why the prospects for EPAs are still on the table,” said Schlettwein.
He explained that an EPA with Europe which erodes policy space to such an extent that Namibian economic development is constrained would not be in the best interest of Namibia.
“We, therefore, hope that there would be some flexibility on both sides to understand that we, as Namibia, would want to become an industrialised and prosperous nation.
If our industrialisation is made more difficult through the erosion of policy space, then the prospects of signing would become small,” stated the minister.
He said if the EPAs have a significant development component embedded in it which creates policy space for Namibia and other SADC countries to develop into industrialised countries, then the prospects to sign EPAs would be very good, and these would be the favourable EPAs they would be very keen to sign.
“If our needs to add value to raw materials and partake in the European market with finished goods in a competitive manner are included in the EPAs, that is a step in the right direction,” noted Schlettwein.
“But If it is the opposite, it makes things more difficult for us to partake in finished goods, and if we do not have the policy space to start developing finished goods, then it will be difficult to sign,” he stressed.
The Trade Minister said Namibia needs policy space, which allows it to protect infant industries.
“We need policy space to develop a safeguard that protects us against subsidised goods from the European market, and we need policy space to incentivise the beneficiations of raw materials,” he continued.
If these different areas are not covered amicable, then they have to evaluate whether the agreement is helpful or harmful, Schlettwein indicated.
“And this will then determine whether we will sign or not, but for now, we are optimistic that it is the original intention to be an economic partnership agreement where we are giving each partner benefits out of the agreement, instead of the winner-takes-all approach,” he stated.
In the Namibian case, one of the sticky points in EPA negotiations is the Most Favoured Nations’ (MFN) clause.
The clause stipulates that all trade agreements entered with parties holding above 1.5 per cent of the global trade would automatically entitle the EU the same preferences.
The SADC EPA group is made up of Botswana, Namibia, Lesotho, Swaziland (BNLS); as well as Mozambique, Angola, and Tanzania (MAT), sometimes referred to as BNLS and MAT countries.
The BNLS are in the Southern African Customs Union (SACU), together with South Africa. MAT countries are Least Developing Countries (LDCs).