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Wednesday 24 April 2019
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AfCFTA and SADC-EPA: complimentarity or counter-productivity.

The European Union (EU) and Southern Africa Development Community (SADC) negotiated, for over ten years, the Economic Partnership Agreement known as SADC-EPA. The EU-SADC EPA eventually became operational in February 2018. The SADC-EPA group of countries consisted of Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland.
Angola has an option to join in the future. Other SADC member states, namely, DRC, Madagascar, Malawi, Zambia and Zimbabwe negotiated with EU as part of different EPA groups.
The European Union is the largest SADC-EPA Group trading partner. While South Africa accounts for the largest part of EU import and export from the SADC Region.
European exports to the SADC Region include machinery, electrical equipment, pharmaceuticals and processed food.
While the main export of SADC-EPA to Europe are diamonds, beef, fish, sugar, oil, aluminium, platinum as well as fruits. The balance of trade between EU and SADC-EPA is slightly more in favour of EU.
After many years of back and forth negotiations the SADC-EPA Group was able to secure a favourable trading regime with Europe. The SADC-EPA is development oriented. The Agreement is asymmetrical in favour of SADC-EPA Group of States. Sensitive products from SADC-EPA countries are shielded from full tariff liberalization.  Meanwhile, SADC-EPA countries are guaranteed access to European markets without duties or quotas. SADC-EPA countries will only remove custom duties on 86 percent of European imports. In case of SADC-EPA sensitive products import duties could be activated on EU imports into SADC-EPA countries so as to safeguard domestic production. In comparison, the Africa Continental Trade Agreement allows only protection to 10 percent of intra-African trade products.
The SADC-EPA countries could protect their infant industries from European imports. The SADC-EPA Agreement allows infant industries to grow longer in isolation from market forces.
In SADC-EPA the rules defining the origin of products are formulated in a way to support development of new value chains in the SADC Region.
The SADC-EPA provides member countries access to intermediate goods from Europe at reduced import duties for the purpose of manufacturing goods and promote industrialization in the SADC Region.
The SADC-EPA harmonizes tariffs among its member countries as far as imports from European Union are concerned. This improves the functioning of the Southern African Custom Union. Each SADC-EPA country is required to offer any advantage which they may have offered the European Union to fellow SADC countries.
For European Union the SADC-EPA provides benefits to EU businesses thus creating trade bonds between Africa and Europe.
This means that SADC-EPA countries shall provide preferential access to its market to member States of the European Union. Overall, EU-SADC-EPA is a rule-based trading system as required by the World Trade Organization(WTO). In addition, SADC-EPA is based on the principles of respect for human rights, the rule of law and democracy, respect for environment as well as good labour standards.
As SADC countries embark on the process of ratifying the African Continental Free Trade Agreement every effort should be made to ensure that AfCFTA and SADC-EPA should compliment each other.
The goal is the integration of African economies through enhanced production and competitiveness.  This is the time for Africa to truly rise by its own efforts and not through commodity- based economies which are vulnerable to externalities.
Namibia worked hard to enable SADC to reach a balanced Agreement with the European Union.
During the 2nd EU-Africa Summit which took place in Lisbon from 8-9 December 2007, Namibia was put under heavy pressure to accept the EPA in its current form then. Honourable Immanuel Ngatjizeko, then Minister of Trade and Industry, Ambassador Hanno Rumph and myself as Prime Minister at the time, worked hard to lobby key African and European countries to support our concerns. We pleaded with Mr Jose Manuel Barroso, then President of the European Union.
He was some how understanding. He could however do nothing because the EPA was an Agreement among States. He was however helpful in getting the European Union to agree that Namibia would sign the Interim EPA with reservations.
Mr Frank Walter Steinmeier, then Foreign Minister of Germany was sympathetic but not committal. Baroness Amos of Britain was indifferent to our pleadings.
However, President Thabo Mbeki of South Africa took a clear stand in support of Namibia’s concern, so did Angola. Other members of SADC-EPA Group were either committed to the Interim EPA or ambivalent. However, during the long time of protracted negotiations African solidarity prevailed and all SADC-EPA countries took a common stand and negotiated with the European Union as a team.
Namibia should therefore be more aggressive in seeing that the SADC-EPA is implemented to the benefit of the whole SADC Region. In this way SADC shall be able to participate meaningfully in the Africa Continental Free Trade Agreement.
One of the actions Namibia may take is to organise a National Economic Summit to map out strategies for enhanced productivity in key economic sectors as well as to develop a road-map for competitiveness.
The Summit should bring together Government economic sectors, key captains of industry, labour, civil society, academics, the women and youth representatives, farmers unions and external experts.
Together they should be able to identify key economic sectors which will enhance export driven growth, either for European markets or Africa Continental markets.
Namibia should not wait for miracles to happen to get out of its current economic doldrums. As we use to say during the independence struggle: ”we are our own liberators”! It was true then as it is true today.




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