14 Jun 2016

European Union (EU) commissioner for trade, Ms Cecilia Malmstrom, has urged SADC countries to work hard in order to realise economic opportunities brought about by the newly signed EU-SADC Economic Partnership Agreement (EPA). 

“EPA creates opportunities for SADC, but they would not be automatic therefore we all have to work hard for them to come into fruition and the work should start now,” Ms Malmstrom said in an interview in Kasane on Saturday.

She expressed the importance of sensitising the private sector about EPA opportunities. 

“I know there has been few workshops about the EPA here in Botswana but more energy should be implored in order to identify and explore obstacles faced by investors and how they can be addressed,” quipped Ms Malmstrom.

As for difficulties faced by investors to export to EU, the commissioner said some of these obstacles were a result of too much paper work that came about because of filing in papers for tariffs.

 This, she said, would improve because the just signed EPA had removed all the tariffs from SADC goods exported to the EU market.

Asked why EPA negotiation took long to be concluded Ms Malmstrom explained that there were different views and ambitions within the SADC community that delayed the process but what was important was that they were finally concluded and concerned parties were ready and eager to sign this great agreement which had enormous potential for countries like Botswana and also for the region as a whole.

“This is the first EPA that we signed in Africa. Even in Europe they are also excited about it,” she noted.

The EU commissioner for Trade said EPA could be a very useful tool for Botswana to diversify her economy because it opened the market not only for the country’s beef but for other products to Europe which have about 500 million consumers, the largest market by far. 

t would be much on to you to identify products that you can export to this large market and we are here to help and facilitate the process, she said.

However, Ngamiland farmers have been complaining that Brazil, a country that used a vaccine manufactured by Botswana Vaccine Institute (BVI), exported their beef to EU while Botswana’s red zones were barred to export to this lucrative market even though they vaccinated their cattle with the same vaccine. 

On this point Ms Malmstrom said there was a possibility for the country to start exporting more beef to Europe because the quota and tariffs would be gone.

Also, she said they would start discussions on how they could strengthen food safety agencies in Botswana to make sure that the country’s beef conformed to consumer safety standards in Europe.

“This is something that we could solve easily and then we would open our market for the good meat you have here,” explained Ms Malmstrom. As for the rules of origin she explained that the agreement provided less strict rule of origin as compared to the previous one.

We have relaxed the rules a lot, said the commissioner for trade. 

The rules of origin according to the commissioner governs components from neighboring countries and beyond that companies could use and still benefit from the easy access to the EU under the EPA.

She said the rules were particularly flexible in this agreement, allowing extensive possibilities for what was known by trade policy wonks as cumulative.

“Under the EPA an exporter in Namibia, for example, can source inputs from any other country in this EPA, which is a good start,” she said. 

Ms Malmstrom further said inputs could also come from any least developed countries that benefit from the EU’s Everything But Arms programme. All these she said were a major opportunity for this region to connect to the global value chains.

Unlike in the past, the commissioner said the principle in the new EPA was that SADC could gain full access to the EU market without worried about reciprocity. She said there were also measures under the new EPA that safeguard European products from flooding SADC markets.

This she said was meant to protect SADC manufacturers, particularly infant ones. The EU commissioner for trade further said reciprocity in this EPA was designed to benefit SADC than EU. 

She moreover urged SADC to open up their markets as a way of enhancing regional integration and economic success.

Ms Malmstrom observed that currently it was difficult for Africa to trade amongst themselves, a situation that negates their economic success.

“You have to get rid of these obstacles to facilitate trade. 

The regional market here could be good as long as you facilitate regional integration,” she said adding that SACU was one of the oldest blocks in the world which can benefit SADC if properly taken advantage of. ENDS