Cautious optimism about EU trade offer

A LOCAL trade forum has reacted with cautious optimism to European Union (EU) proposals to eliminate all tariffs and quotas on imports from African, Caribbean and Pacific (ACP) states from January next year.

The EU announced its mind shift just before the Easter weekend. “This offer is limited to a signed agreement on or before December 31 this year with the EU as the existing Cotonou Agreement with ACP countries comes to an end,” said Juergen Hoffmann of the Agricultural Trade Forum (ATF).”The international trade community like the World Trade Organisation (WTO) are sceptical of the possible implementation of the new EU offer,” Hoffmann told The Namibian.WTO talks on new internationally binding trade agreements for its over 180 member states stalled last year due to differences.The new WTO treaty was planned to come into force in January next year.Namibia’s main exports to the EU are grapes, beef and fish, but grapes are subject to a tariff.Only 800 tonnes of grapes can enter EU countries tariff free, above that an eight per cent import tariff is payable by Namibian exporters.”It is of utmost importance that we have to reach a signed trade agreement, also called Economic Partnership Agreement (EPA), with the EU by December, being the Southern African Development Community (SADC) of which Namibia is a member,” Hoffmann added.Namibia exported about 25 000 tonnes of table grapes in 2006.Should the eight per cent tariff on the remaining 24 200 tonnes be scrapped, local grape producers would save millions.The wide-ranging EU trade offer to remove tariffs and quotas on ACP goods is linked to demands that the 77 ACP states in return open up their markets to EU goods, but over a longer period, giving the countries time to adapt to free trade.The EU also said that ACP governments would be able to protect sensitive products where the removal of import duties could threaten local producers.The EU proposal, part of current negotiations on an economic partnership pact between the EU and ACP states, covers agricultural products like beef, dairy, cereals and all fruit and vegetables, which are currently subject to EU market restrictions.Rice and sugar are excluded.A leading aid agency Oxfam has warned that poor nations must not be pressed to open up their markets too rapidly.The EU proposal “provides some answers to legitimate ACP concerns,” said Oxfam in a press statement from Brussels, Belgium.Demands that the countries open their markets could have serious negative implications for poor people’s livelihoods and future economic development, it said.The aid agency cautioned that many ACP countries were not yet ready to sign free-trade deals – known as economic partnership agreements – and were also rightly concerned about the implications of new rules in areas such as investment and government procurement.”They should be given more time to make sure that the deals they sign will not harm development,” said Oxfam.The EU Ambassador to Namibia, Dr Elisabeth Pape, said the new EU offer allowed more products from ACP countries into the EU.”We expect some reciprocity for EU goods but not at the same level,” Pape told reporters on Thursday.South Africa, which has a separate free-trade agreement with the EU, is not covered by the new offer, Pape added.The WTO demands that free-trade deals be based on a reciprocal lowering of restrictions.The current Cotonou Agreement of the EU with ACP sates does not demand market-opening reciprocity from poor nations.The WTO has said it must be replaced by a more modern trade pact by the end of 2007.”This offer is limited to a signed agreement on or before December 31 this year with the EU as the existing Cotonou Agreement with ACP countries comes to an end,” said Juergen Hoffmann of the Agricultural Trade Forum (ATF).”The international trade community like the World Trade Organisation (WTO) are sceptical of the possible implementation of the new EU offer,” Hoffmann told The Namibian.WTO talks on new internationally binding trade agreements for its over 180 member states stalled last year due to differences.The new WTO treaty was planned to come into force in January next year.Namibia’s main exports to the EU are grapes, beef and fish, but grapes are subject to a tariff.Only 800 tonnes of grapes can enter EU countries tariff free, above that an eight per cent import tariff is payable by Namibian exporters. “It is of utmost importance that we have to reach a signed trade agreement, also called Economic Partnership Agreement (EPA), with the EU by December, being the Southern African Development Community (SADC) of which Namibia is a member,” Hoffmann added.Namibia exported about 25 000 tonnes of table grapes in 2006.Should the eight per cent tariff on the remaining 24 200 tonnes be scrapped, local grape producers would save millions.The wide-ranging EU trade offer to remove tariffs and quotas on ACP goods is linked to demands that the 77 ACP states in return open up their markets to EU goods, but over a longer period, giving the countries time to adapt to free trade.The EU also said that ACP governments would be able to protect sensitive products where the removal of import duties could threaten local producers.The EU proposal, part of current negotiations on an economic partnership pact between the EU and ACP states, covers agricultural products like beef, dairy, cereals and all fruit and vegetables, which are currently subject to EU market restrictions.Rice and sugar are excluded.A leading aid agency Oxfam has warned that poor nations must not be pressed to open up their markets too rapidly.The EU proposal “provides some answers to legitimate ACP concerns,” said Oxfam in a press statement from Brussels, Belgium.Demands that the countries open their markets could have serious negative implications for poor people’s livelihoods and future economic development, it said.The aid agency cautioned that many ACP countries were not yet ready to sign free-trade deals – known as economic partnership agreements – and were also rightly concerned about the implications of new rules in areas such as investment and government procurement.”They should be given more time to make sure that the deals they sign will not harm development,” said Oxfam.The EU Ambassador to Namibia, Dr Elisabeth Pape, said the new EU offer allowed more products from ACP countries into the EU.”We expect some reciprocity for EU goods but not at the same level,” Pape told reporters on Thursday.South Africa, which has a separate free-trade agreement with the EU, is not covered by the new offer, Pape added.The WTO demands that free-trade deals be based on a reciprocal lowering of restrictions.The current Cotonou Agreement of the EU with ACP sates does not demand market-opening reciprocity from poor nations.The WTO has said it must be replaced by a more modern trade pact by the end of 2007.