Trade Negotiations: briefings: Dep. Minister, Trade & Industry & Minister of Foreign Affairs
International Relations
27 February 2008
Chairperson: Mr D Sithole (ANC)
Meeting Summary
The Deputy Minister of Trade and Industry and the Minister of Foreign Affairs briefed Members on the developments regarding the negotiations on the Economic Partnership Agreements (EPAs). The presentation focused primarily on the negotiations between the Southern African Development Community (SADC) group and the European Commission (EC), which represented the European Union (EU) in the negotiations. The report commenced with a background on EPAs and a review of the positions held by the negotiating partners on the agreements. In addition, the report touched on the current status of the negotiations and the implications arising out of the positions and possible outcomes of the negotiations
Members scrutinised the unity within SADC, the Southern African Custom Union) and the African Union. In addition, Members raised concern about the European Union’s hegemonic ambitions and the reciprocal tariffs offered to the European Union. The Committee also examined the pressure exerted on African countries and the begging culture of the African Union.
Meeting report
Opening Remarks by Chairperson
The Chairperson explained that this was a joint meeting between the Select Committee on Economic Affairs and the Portfolio Committees on Foreign Affairs and Trade and Industry. The briefings by the Deputy Minister of Trade and Industry and Minister of Foreign Affairs would focus on the developments regarding the negotiations on the Economic Partnership Agreement (EPA), which was becoming a very important aspect of the trade regime that informed how the country traded with the European Union (EU). The implications of EPA extended beyond trade relations and affected how the region functioned politically and how Southern African Democratic Community (SADC) states related to each other.
Briefing by Deputy Minister of Trade and Industry
Hon Rob Davies, Deputy Minister of Trade and Industry, summarised that the EU had initiated the EPAs as an alternative to the Cotonou Agreement, which gave non-reciprocal preferences to African,
The EU was of the view that the EPAs would support regional integration. However, these had in fact achieved the opposite result because SADC countries were divided into four different configurations when it came to the EPA negotiations. The emerging EPA created a series of new policy divisions in SADC, among the SADC EPA countries as well as in the Southern African Customs Union (SACU). In the interest of promoting regional integration and harmonising trade relations with the EU,
The SADC-EPA proposal was adopted in March 2006 and it was argued that that there was no need for further reciprocity because of the impact of TDCA on Angola, Mozambique, Tanzania (AMT), all SACU members and Least Developed Countries (LDCs) in the region. It was therefore resolved that the EPA negotiations should focus on Duty Free, Quota Free (DF, QF) access to the EU market.
The EU responded after a year and granted DFQF access to the region for all products, with the exception of sugar, rice and “competitive products” from
Mr Davies indicated that LDCs were put under pressure to remove tariffs on a minimum of 80% of imports from the EU over a 15-year period. Controversially, the EPAs promoted the concept of collectivity, which implied that the SADC-EPA would have to act together in complaints against the EU, and that the EU could act against all SADC countries if there were to be a complaint against one state. Furthermore, he highlighted that the More Favoured Nation (MFN) clause created major impediments to trade diversification and South-South trade relations.
Finally, he announced that there would be a meeting with the EU Trade Commissioner on 4 March. It was expected that this interaction would determine whether there was a commitment to address the concerns of
Minister of Foreign Affairs Briefing
Hon Nkosazana Dlamini-Zuma, Minister of Foreign Affairs, indicated that she would supplement the presentation delivered by Mr Rob Davies. She revealed that the African Union (AU) had discussed this matter because other regions also experienced the same problems regarding the manner, pressure and speed of the EPA negotiations. Consequently, several African Heads of State raised these concerns at the Second Africa-EU Summit, and there was an agreement that there should be a review on the interim EPAs.
The Minister emphasised that it was imperative for the entire SADC region to regroup and adopt a common view, despite the fact that some countries had initialled the interim EPA. The region could not function in a divided manner and should work instead towards a more unified and coherent position.
Furthermore, the Minister claimed that the EU was using these negotiations beyond just normal trade negotiations. The EU was attempting to regain ground, which they perceived they had lost, in their quest for hegemony in
Discussion
Mr M Ramgobin (PC Foreign Affairs, ANC) stated that the EPAs should not be seen in isolation of what was happening in the world. He advised that individual African states should examine themselves in the context of the region and the continent to reflect on issues of unity and division.
Ms S Camerer (PC Foreign Affairs, DA) thanked Mr Davies for an interesting briefing. She enquired what strategies were in place to counter the hegemonic ambitions of the EU and to ensure that SACU would speak with one voice.
Dr Dlamini-Zuma replied that the Department was engaging with
Ms F Mohamed (PC Trade and Industry, ANC) believed that the “More Favoured Nation” clause was problematic. She asked whether the different SADC states, which were configured under different EPAs, exchanged notes and kept each other informed about developments in their specific EPAs.
Dr Dlamini-Zuma answered that the SADC Secretariat was responsible for ensuring that there was an exchange of information between the SADC-EPA and other EPAs. She conceded that she was not certain whether this happened in reality. Lastly, she stressed that this exercise was necessary to attain the harmonisation between the different EPAs due to cross-membership.
Mr J Sibiya (SC Economic Affairs, ANC) posed two questions. Firstly, he queried why many LDCs in SADC and other regions agreed to remove tariffs of about 80% of EU imports over 15 years, without negotiating a similar reciprocal deal. Secondly, he sought to understand the EU’s restrictions on importation of South African cheese and red meat.
Mr Davies explained that LDCs benefited from a Duty Free, Quota Free (DFQF) system for all their products, with the exception of rice and sugar, entering the EU. In exchange, regions were expected to substantially reduce tariffs of imports from the EU. This arrangement differed from previous DFQF agreements, which were non-reciprocal. It was also one of the concerns raised by
Mr Xavier Carim, Chief Negotiator: DTI, announced that all issues relating to agricultural products were dealt with directly by the Department of Agriculture (DoA). Nevertheless, he expanded that the EU wanted preferential rates for its cheese imported into
Mr S Rasmeni (PC Trade and Industry, ANC) examined why
Dr Dlamini-Zuma clarified that the EU initially did not want
Dr A Luthuli (PC Foreign Affairs, ANC) remarked that the EU reached its stage of development after many years and numerous difficulties. She reckoned that the EU was stampeding and rushing the different regions into a decision. The process was being driven without regions being given the space to arrive at a coherent position. Ultimately, she accused the EU of engaging in tactics of divide and rule.
Dr Dlamini-Zuma confirmed that countries were pressurised into signing the EPAs due to threats that they would lose out on certain concessions. For its part,
Mr Davies commented that the Department was not condemning any country that initialled because it understood the intolerable pressure the countries were put under.
Mr D Dlali (PC Trade and Industry, ANC) asked whether there was any prospect of starting the EPAs afresh. He also queried why
Dr Dlamini-Zuma stated that
Mr Dlali referred to certain claims in the Business Day newspaper, which mentioned worrying comments attributed to the
In response to this, Dr Dlamini-Zuma countered that those allegations in the article emanated from a faceless and nameless individual, and should therefore be treated with the contempt that they deserved.
Mr Dlali stated that
Mr J Seremane (PC Foreign Affairs, DA) commended Mr Davis for a “meticulous and informative” presentation. Like the previous Member, he was adamant that
Mr M Pheko (PC Foreign Affairs, PAC) maintained that African countries were adopting the position of beggars towards other countries, despite the wealth of natural resources in
Mr J Maake (PC Trade and Industry, ANC) described the EPAs as “sheer bullying and blackmail” by the EU. Instead of promoting unity, the EPAs achieved the opposite result.
Ms D Ramodibe (PC Trade and Industry, ANC) commented that the EU was threatened by
Dr Dlamini-Zuma disclosed that
Prof E Chang (PC Trade and Industry, IFP) enquired why
Mr Carim contradicted this claim. SACU was consulted. Although this did not take place early in the process, but still some time before the Agreement was implemented.
Mr S Njikelana (PC Trade and Industry, ANC) characterised the EPAs as the re-colonisation of
Dr Dlamini-Zuma insisted that SADC should investigate whether the real objective of integration was just to develop a free trade Custom Union, or to develop capacity within the region to manufacture, sell, and export products. If it was not the latter option,
Mr Z Madasa (PC Foreign Affairs, ANC) raised three issues. Firstly, he asked about Africa’s shift towards
Mr Davies responded that
Dr M Sefularo (PC Foreign Affairs, ANC) stated that he did not have a sense of the country’s or the continent’s red lines. Consequently, he urged the Department to identify this as a matter of priority.
Mr Davies replied that the Department’s red lines were on the issues of trade services and new generation issues, which were disregarded by the EU. He indicated that “the more we can hold our lines, the better it will be”. In conclusion, he mentioned that parliament could add value by identifying what the red lines should be.
Mr Carim explained that the Department had studied the EPA text and identified eight or nine red lines.
Mr B Martins (PC Trade and Industry, ANC) reminded all participants that parliament would ultimately decide whether to ratify the EPA.
Mr Davies recognized the role that parliament would play and stated that the Members’ concerns, reservations and objections would be conveyed to European Trade Commissioner Mandelson at the meeting next Tuesday.
A member enquired whether the Minister foresaw light at the end of the tunnel.
Dr Dlamini-Zuma stated that this would only be the case if there was a substantial renegotiation of the EPAs.
The Chairperson stated that the struggle to reunite the region would not be easy. Despite this, he challenged the Departments to pursue this endeavour.
The meeting was adjourned.
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