Southern Africa under spotlight to thrash out region’s trade policies

The Namibian
12 December 2008

Southern Africa is at a crossroads. While the rest of the world is heaving and buckling under the weight of the financial crisis, the subcontinent is battling to overcome centuries of colonial and other boundaries through adopting agreements about a free trade area.

This has not been smooth and it has been exacerbated by existing partnerships that individual states have entered into between themselves and the European Union.

At a conference organised by the Centre for Training and Project Development, which was attended by the government and business, speakers said the implementation of a free trade area and the establishment of a SADC Customs Union by 2010 depended on a range of factors.

The Namibian’s Nangula Shejavali attended the conference and compiled the following reports.

Controversial EPAs and overlapping memberships

Scepticism regarding the EU’s economic partnership agreements (EPAs) was rife at the conference, with SADC Secretariat’s Mupelwa Sichilima going as far as describing EU’s strategy to deal with the region in three different groups and to create bilateral agreements with individual countries, as a “divide and rule” strategy.

The EU began embarking on the EPA strategy with individual countries or smaller Customs Unions in 2004 after the Cotonou Agreement had come to an end, with many African, Caribbean and Pacific (ACP) countries opting out of an extension in the agreement,.

In the SADC region, there are currently three groups with which the EU is working to negotiate the agreements, causing fragmentation within the region. These include the SADC-EPA, of which eight of the 15 SADC member states are a part, the East African Community-EPA, of which Tanzania, a SADC member, is a part, and the Eastern and Southern African (ESA) countries, which include the remaining states.

According to Annascy Mwanyangapo, Director of International Trade at the Ministry of Trade and Industry, this arrangement is problematic because it undermines SADC’s long-term efforts for economic integration, and sets member states against one another.

In 2007, the EU set up an interim partnership agreement with SACU members (with the exception of South Africa) and with some of the SADC countries under the SADC-EPA Configuration, initialed in January 2008. The EU is now pressuring these countries to sign a reciprocal agreement by January next year, whereby Europe would also have preferential trade access to these countries’ markets. But several serious reservations on the part of Namibia, Angola and South Africa have prevented this, with one of the arguments being that there is no sense in signing the interim EPA, while the completion of regional initiatives is still ongoing.

There have already been fallouts within SACU on the issue of the EPAs, with Botswana’s Trade and Industry Minister, Neo Moroka, criticising South Africa’s objections by accusing South Africa of “behaving like Big Brother in SACU”. Speculations on a SACU breakup on the grounds of the EPAs have been doing the rounds.

Sichilima, Mwanyangapo, Shaanika, Nyambe and Calle Schlettwein (Permanent Secretary in the Ministry of Finance) all cautioned against the EPAs, highlighting the regional integration efforts as the more important priority for regional development at the moment, and prescribing policy implementation that would specify conditional preference for a SADC-EU EPA as opposed to EPAs that cut across SADC membership or seek bilateral links.

“Belonging to an EPA has its own obligations. This problem has delayed the progress of SADC protocols, and the speed at which changes towards regional integration can be made,” said Nyambe, who, along with Schlettwein, also pointed to overlapping membership in SACU, Comesa and SADC as a factor needing redress.

“SADC members will have to choose between SADC membership and membership of other agreements,” said Schlettwein, who warned that multiple customs unions with differing objectives would only add difficulty to the process of creating the SADC Customs Union intended for 2010.

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