South Africa: EC Pushes for Trade Pact Signature Date

The parties met earlier this month in Swakopmund to iron out remaining concerns expressed by SA, Namibia and Angola -- the ANSA group -- and significant progress was made on key issues.

Officials who attended described the meeting as one of the most positive the parties had held in the two-year period of negotiations, which had been marked mostly by acrimony.

However, agreement remained elusive on two key issues, namely the European Union's (EU's) demand for a most-favoured nation (MFN) clause and the issue of the definition of the parties. Ashton wrote in the letter: "I think I have done all I could, both in terms of substance and timing, to accommodate the concerns expressed by the ANSA group and I am pleased that this has allowed us to find concrete solutions on how to solve the majority of those concerns."

The trade commissioner, how- ever, urged for the deal to be formalised to "provide the necessary legal security to the preferences (the EU) is offering to Botswana, Lesotho, Namibia, Mozambique and Swaziland".

These countries do not benefit from the legal security in their trading relations with the EU as does SA under the trade, development and co-operation agreement. The EU has been unilaterally extending preferences to the region in breach of World Trade Organisation (WTO) rules since the expiry of a waiver on the Cotonou agreement at the end of 2007 .

Europe is anxious to bring its trade relations with the SADC group in line with trade rules to avoid a WTO challenge.

SA's chief trade negotiator, Xavier Carim, yesterday said there had been agreement after the Swakopmund meeting that there still needed to be a political discussion between leaders in the region and also with the EU trade commissioner to resolve issues.

Carim returned this weekend from a meeting in Addis Ababa where the EPA framework was discussed between African representatives.

"There are a range of different views on the continent, but many have the same problems as we do. Many countries feel that the EPA in its current form would undermine the regional integration agenda," he said, adding that it was hoped that more time would be afforded by the EU to sort out the concerns. From Ashton's letter it seems clear that the EC would be loathe to make further concessions on the MFN demand.

Under the MFN, concessions made to countries whose trade exceeded more than 1% of world trade would, in future trade agreements, be automatically extended to the EU.

At the Swakopmund meeting the EC offered to raise the threshold of countries' portions of world trade to 1,5% and agreed to limit the MFN requirement to customs duties.