A new trade agreement with southern Africa

Source: A.C. (Cecilia) Malmström i, published on Friday, October 7 2016.

In June this year, I travelled to Kasane, Botswana. In the midst of an extraordinary nature reserve I signed a new trade agreement along with the Trade Ministers of six countries in southern Africa - Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland.

These countries make up the “Southern Africa Development Community EPA group”, or SADC EPA Group. Together we agreed on the positive impact to be had from the EU-SADC Economic Partnership Agreement, or EPA as it's known. And today the agreement comes into effect.

Africa is an emerging continent, with a dynamic and innovative private sector that is thriving - nowhere more so than in southern Africa. The EU and SADC need to shape our trade relations so we give southern African businesses and entrepreneurs the best possible chance of succeeding. This is what we aimed to achieve with the EPA that will now govern trade relations between us.

I think we are on the path to success, for several reasons. First, the EU now gives most SADC EPA countries completely free access to our market - and, for South Africa, almost free access. That means exports from SADC countries to the EU face zero import duties at EU customs.

Second, many of the goods that African economies need in order to prosper will now become cheaper to buy. These include so-called intermediate goods - ones which are used as inputs to produce final goods, such as fertilisers.

Third, the EPA will protect from liberalisation certain industries in the southern African countries that need more time to grow and mature independently from global competition, such as beef in South Africa or furniture in Mozambique.

And, the rules that determine where products are from have been drafted in a flexible way that maximises the number of goods that can benefit from duty-free access. For example, a textile product can enter the EU duty-free if at least one stage in its production - such as weaving or knitting - took place in a SADC country.

Finally, the agreement is of an entirely new species in that it is the first trade deal that directly supports the economic integration of a specific region. As we in Europe have experienced through trial and error over many years - the regional integration of markets is one of the most powerful drivers of prosperity, stability and growth that mankind has devised. So together, we have shaped this economic partnership in a way that favours closer links within the six Southern African nations involved.

By including such helpful provisions, the EPA becomes a trade agreement that focuses squarely on development.

But of course, the deal will also be good for businesses in Europe. Gradually, they get new access to the markets of southern Africa. South Africa will also protect more than 250 so-called Geographical Indications or GIs from the EU - names of traditional food and drink products linked to a particular town or region. That will enable consumers in Africa to make informed choices about our high-quality produce. We will also protect their GIs here - a really innovative feature of our agreements.

Above all, I am pleased that this agreement is in line with the Trade for All strategy that I published last year. Trade cannot be seen in isolation from questions of democracy, the rule of law, or sustainable development. And the SADC EPA is based firmly on these basic principles.

We now need to make sure that we implement this agreement diligently, so that it works in practice as well as on paper. I will do so in close cooperation with business associations, trade unions, consumer groups, environmental and other NGOs, and other civil society organisations. Only in this way will we get the best out of the agreement and make it work as intended.

A factsheet about the SADC agreement can be found here.