July 28, 2010

Country stands firm on conditions for signing EPAs

Malawi won’t sign a trade deal with the European Union until the union helps the southern African country bring production standards to European companies’ level, Trade Minister Eunice Kazembe has said. The country stands to lose should it sign the so- called economic partnership agreements as it would be forced to trade with the EU on zero-tax terms, Kazembe said. “We need to move cautiously otherwise the Malawi market will be flooded with European goods,” she said. “We want the EPAs to be of mutual benefit for the economic development of both sides.”

The EU delegation, led by the European Commission's (EC) director for development and EPAs Peter Thompson and EU Ambassador to Malawi Alexander Baum, engaged Malawi's top trade officials at a two-day meeting on Jul 26 and 27 in Blantyre. Peter Thompson, the European Commission’s director for development, said Malawi should show interest in continuing with the negotiations by making an offer that would lead to the two parties discussing how trade can be facilitated.

In a statement issued afterwards Thompson also indicated the EC's frustration and impatience with Malawi and the other African, Caribbean and Pacific (ACP) states that have not yet signed the EPA. "Seven years after their launch, EPA negotiations across ACP regions are not progressing as we would wish. It is now time to take a decision on whether there is a clear way forward together and, if so, under what timelines. I hope Malawians will play an active role in this decision at regional and national level," stated Thompson.

On the other hand, Malawi’s Trade Minister Kazembe emphasized that Malawi was currently at a disadvantage when it came to trading in terms of an EPA because it was a land-locked and least developed country (LDC) with poor public infrastructure, low labour productivity, inadequate technological capacity and unreliable public utilities. "We have interests that need to be sorted out. These challenges should be addressed before full liberalisation," she stressed. Rural roads, health and education facilities were other issues that the country was demanding before it would sign the EPA. Malawi also wanted increased investment in research and development, the minister emphasised.

Malawi participates in the EU’s so-called Everything But Arms initiative, which is designed to boost the economies of African, Caribbean and Pacific countries by allowing them to export goods into the EU duty-free area. Malawi is content with the EBA and sees no reason to hurry into signing the EPAs, Kazembe furthermore said. (SADOCC)

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