SADC signs EPA with EU

Lemohang Rakotsoane

MASERU

SADC countries have signed a new Economic Partnership Agreement (EPA) with the European Union (EU) that will strengthen and enhance trade between the regional blocs.

Trade Minister Joshua Setipa said the EPA has mutual benefits for SADC and the EU.

The EU-SADC EPA is a development-oriented agreement with the objective of supporting sustainable economic growth, diversification and expansion of the industrial base of the region through regional and global value chains, investment and opportunities.

Setipa said the EPA paves way for local businesses to export to the EU.

“It is a good opportunity for those businesses that are already exporting to the international market but also for those who are not exporting yet,” Setipa said.

“Those who are already exporting should be helped to increase their quantity and those who are not yet they should be helped to meet standards that are required so that they can also benefit from this agreement.”

He added that previously Lesotho was also exporting agricultural products such as asparagus and peaches to the EU.

The agreement, he said, opens the EU markets to other products from Lesotho.

“Now we have been afforded even a better opportunity that allows us to export agricultural products among other things and now there is an agreement written meaning we will be exporting without fear of any interference.”

Setipa indicated that in the last year Lesotho was able to export diamonds worth €255 million to the EU.

“Though we have been able to export textiles it is only in a small percentage and we should work to increase that quantity and ensure that we enjoy the benefits of the agreement.”

He however noted that despite the vast opportunities it offers the EPA has its own challenges.

“It has structural challenges; it is 27 different markets brought together and have different preferences.”

He said among the numerous benefits of the EPA is “that it has a developmental feature which binds Europeans to support small medium and micro enterprises (SMMEs).”

“It also allows countries to buy raw materials from other countries and have the products sold as produced in the country that compiled the raw materials.

How the EPA works

The EPA gives asymmetric access to the partners in the SADC EPA group. They can shield sensitive products from full liberalisation and safeguards can be deployed when imports are growing too quickly. A detailed development chapter identifies trade-related areas that can benefit from funding. The agreement also contains a chapter on sustainable development which covers social and environmental matters.

Why it’s good for SADC

The EPA guarantees access to the EU market without any duties or quotas for Botswana, Lesotho, Mozambique, Namibia, and Swaziland. South Africa will benefit from new market access additional to the Trade, Development and Cooperation Agreement between the EU and South Africa that currently governs the trade relations with the EU. The new access includes better trading terms mainly in agriculture and fisheries, including for wine, sugar, fisheries products, flowers and canned fruits. The EU will obtain meaningful new market access into Southern African Customs Union (products include wheat, barley, cheese, meat products and butter), and will have the security of a bilateral agreement with Mozambique, one of the LDCs in the region.

Who is protected?

The EPA includes a bilateral protocol between the EU and South Africa on the protection of geographical indications and on trade in wines and spirits. The EU will protect names such as Rooibos, the famous infusion from South Africa, and numerous wine names like Stellenbosch and Paarl. In return, South Africa will protect more than 250 EU names spread over the categories food, wines and spirits. – SADAC-website