Monday 19 April 2021
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EU EPA and Mercusor Trade Agreements

What are the benefits for Namibia and how can the agreements boost our trade in SADC?

Recently two very important trade agreements where entered into force which is the SACU-Mercosur (Argentina, Brazil, Uruguay and Paraguay), as well as the EU Partnership Agreement with the 28 EU member states. The Namibia Trade Forum (NTF) recently held various public consultation meetings with the private sector to elaborate on the scope and benefits of the agreements that where spearheaded by the Ministry of Industrialization, Trade and SME development. The other stakeholders that played a vital role in promoting the trade agreement locally is Walvis Bay Corridor Group, Ministry of Finance Customs Department and the Ministry of Fisheries.  One of the key roles of the Walvis Bay Corridor Group is to provide support and assistance to potential businesses with interest to trade in the Mercosur region. They also make reference to their Sao Paolo office as a point of reference and technical support for potential traders to grant easier market access.
The fishing sector seemed quite optimistic about trade with the EU as this is a strategic market for hake exports and other species. The agreement provides new directives on the rules of origin and certain quota recommendations. They also suggest that fish exporters should register with the customs department as the Euro1 form will be faced out soon and be replaced by a system that keeps records for a longer period of time. The scheduled goods will enjoy duty free access into the EU market, this time with reciprocity for EU market products which will also enjoy duty free quota free access into the Namibian/SACU market. There still needs to be proper rollbacks to give indicative list of products that needs to enter our markets duty free, as we will expect current prices of goods from EU to be cheaper in our market. However Britain will be excluded from this agreement as there is need for separate engagements with Britain on imports and exports. One key achievement of the EU agreement is that our products are exposed to competitive markets in terms of quality and standardization which motivates global acceptance, the other key competitors in the fishing sector is Morocco but Namibia has a diverse number of species.
SACU countries imports from Mercosur were estimated at N$ 24.4 billion in 2015, which was mainly vehicles (N$ 5 billion), animal fodders (N$ 2.8 billion), meat (N$2 billion) as well as cereals, machinery, animal oils, sugar, vegetables, etc. The import products from Mercosur to SACU is mainly composed of food and agricultural products. However, overall imports of Namibia from the Mercosur region was estimated at around N$ 200 million (in 2014), as most goods are diverted via South Africa which enjoys imports rations of a staggering R 24.2 billion in 2015, leaving the rest of the region to lesser volumes.
Businesses are encouraged to explore niche markets for both imports and exports, however we must use the opportunity to boost our trade in wheat, poultry, sea products, vehicles, etc for the SADC region as well agricultural technology to boost our food production. The Mercosur agreement will boost opportunity for importing feed items while the EPA market has been attractive for beef, grapes, citrus, dates, hake, pharmaceutical inputs, etc. The strategic advantage is that of geographical proximity as comparison to China, India and USA. The EU and Mercosur countries also enjoy a strong services sector but these did not form part of the current agreement.  Most of the goods available in the two trade regions are scarce in the entire SADC region therefore Namibians have the opportunity to expand merchandise trade and retail trade into other African countries, because we uniquely enjoy duty free goods.

One thought on “EU EPA and Mercusor Trade Agreements

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