Trade | EU Seals Trade Pact With African Nations After 12 Years of Talks

LAGOS, Nigeria, Capital Markets in Africa: The European Union and six southern African nations will sign off on a trade accord Friday after 12 years of negotiations that were stalled mainly by differences over market access for agricultural products.

The so-called Economic Partnership Agreements gives products from Botswana, Lesotho, Mozambique, Namibia, and Swaziland duty- and quota-free access to the EU. South Africa, which has the region’s most-developed economy, will enjoy enhanced market access that goes beyond an existing preferential trade pact. The new accord is open-ended and will be reviewed every five years.

Despite the delays, the fact that some EU economies were struggling and the uncertainty of the U. K. leaving the EU, the deal is the most favorable yet clinched by the African nations, EU Trade Commissioner Cecilia Malmstrom said.

“It opens up fully the EU market for all goods and commodities on an asymmetric basis,” she said in an interview Wednesday in Gaborone, Botswana’s capital. “It contains safeguards for vulnerable sectors and is a long-term cooperation on economic development. More trade is better but ours is the most advantageous” deal, she said.

In June last year, the U.S. renewed its African Growth and Opportunity Act. First adopted in 2000, the pact eliminated import levies on more than 7,000 products from Africa, ranging from textiles to manufactured items. That accord benefits 39 nations.

The African nations signing the pact with the EU will gain access to its 100-million-euro fund ($134-million) fund for economic integration and a 32-million-euro trade-related facility, Malmstrom said. The funds were set up to help countries fully benefit from the concessions offered by the EU by boosting their productive capacity and improving the quality of their exports.

The EU also agreed to relax rules of origin, which will enable the African nations to import raw materials from other regions, process them and export them under the terms of the new trade accord.

South Africa and Namibia initially objected to the Economic Partnership Agreements, saying they undermined regional integration plans and that provisions requiring the African countries to open up their markets would adversely affect their economies. Botswana, Lesotho and Swaziland said they had to sign the pacts, or they would forfeit their preferential access to key markets and aid.

EU exports to sub-Saharan Africa totaled $88.6 billion last year, while it imported goods worth $81.5 billion, data compiled by Bloomberg shows.

Source: Bloomberg Business News