September 19, 2007

Beef exports under threat by EPA / Trade unions demand extension of negotiation period

Trade experts are worried that if a deal is not made on the Economic Partnership Agreements (EPAs) by December 31, the country could face serious repercussions. The experts sounded the alarm that Botswana beef stood to lose. "If the Cotonou Agreement expires, there will be an immediate impact and challenges," Pauline Elago, the Deputy Director of Trade Facilitation and Capacity Building said. "Cotonou is the only basis for Botswana to enter the European Union market. Botswana beef will face duties and Botswana will be competing with other countries and prices will be affected."
Botswana and its SADC and ACP peers are currently locked in negotiations with the European Union (EU) over the EPAs that seek to replace the preferential trade system with a reciprocal one. Under the existing Cotonou trade provisions, Botswana benefits from the beef protocol, which grants it a tariff quota of 18.916 tonnes per year with a 92 percent reduction in customs duties. But with the EPA offer, it is argued Botswana would significantly enhance market access for its beef because it would be able to export unlimited quantities duty free. Under the EPAs, the EU will provide duty-free access to its markets for ACP exports, while at the same time, the ACP countries will also provide duty-free access to their own markets for EU exports.
However, NGOs are against the arrangement, saying it will erode tariff earnings and possibly lead to budget deficits and instability in the ACP countries. Elago argued that the December deadline is a real challenge for Botswana because if it is not met, there will be no automatic alternative. Some NGOs in the ACP region are pushing for the Generalised System of Preferences (GSP) Plus, but Elago said that this alternative is vulnerable, adding: "Even if you pursue this option, you will still be worse off".
Kedibonye Laletsang, the Director of International Trade at the Ministry of Trade and Industry, emphasised that unlike other SADC and ACP countries, Botswana had no fallback position. Countries like Angola, Mozambique and South Africa could try some other alternatives if the EPAs were not signed. "The reality for Botswana is that there are no alternatives," Laletsang said, adding that Botswana is facing difficulties in the negotiations because it is "difficult for other countries to support other issues." South Africa, for example, could rely on its Trade, Development and Co-operation Agreement (TDCA) if EPAs are not signed.
Under TDCA, which was singed in 1999, there is a provision for a free trade area between South Africa and the EU over a transitional period of 12 years, which means that the EU and South Africa will open their markets to each other at a different pace. Angola and Mozambique, on the other hand, could be covered under the Least Developed Countries (LDCs). But for Botswana, experts warn that the best option is EPAs on the expiry of the Cotonou Agreement waiver because it is argued that EPAs offer quota and duty free access, which is not the case with GSP Plus. (Mmegi/The Reporter, Gaborone) Meanwhile, the European Trade Union Confederation (ETUC) in Brussels, together with the newly-formed International Trade Union Confederation (ITUC), has called upon EU Trade Commissioner Peter Mandelson to support an extension of the negotiating period of EPAs beyond the scheduled deadline of 31 December 2007. Read the full text of the letter (PDF). (-)

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