Davies seeks free trade deal for Africa

IOL pic june20 davies trade briefingSUPPLIEDTrade and Industry Minister Rob Davies (left) and EU ambassador to South Africa Marcus Cornaro signed an Economic Partnership Agreement with the EU. Botswana, Lesotho, Mozambique, Namibia and Swaziland also signed the EPA. Picture: Mike Wesson

Johannesburg – South Africa had prioritised signing free trade agreements with other African countries as part of a wider agenda to encourage regional integration, Trade and Industry Minister Rob Davies said on Friday.

Following the recent signing of the Economic Partnership Agreement (EPA) between six southern African countries and the EU, Davies said that South Africa wanted to seal trade agreements with fellow African countries.

This was part of efforts to increase trade among African countries. The AU Summit, held in South Africa last year, marked the start of negotiations to establish a so-called Continental Free Trade Area by next year.

“(Setting up the Continental Free Trade Area) is taking longer than anticipated,” said Davies, adding that infrastructure did not always link the respective African economies.

Speaking a week after six Southern African Development Community countries, Namibia, Botswana, Lesotho, Mozambique, South Africa and Swaziland, signed the EPA in Botswana, Davies said the agreement would lead to increased access to the EU of a number of South African agricultural products. He singled out increased access for South African canned fruit, wine, sugar and ethanol.

Higher quotas

Davies said the yearly tariff quota of South African wine would increase from 50 million litres to 110 million litres.

He said the EPA also made provision for 150 000 tons of South African sugar.

He said although South Africa already had a bilateral trade agreement with EU, it decided to be part of the EPA negotiations to ensure increased market access for South African products and “to harmonise trading regime between Sacu (Southern African Customs Unions) and the EU”.

He said he had sent the agreement, which he said the different countries were happy to sign, to the South African Parliament for ratification.

In a statement on Friday, the Department of Trade and Industry said the EPA would replace the trade chapter of the Trade Development and Co-operation Agreement that was signed in 2000.

The department said South African exports to the EU had increased from R151bn in 2011 to R216bn last year.

Main partner

“The EU remains South Africa’s main trading partner, total trade has increased from R374bn in 2011 to R536bn in 2015, an increase of 43 percent,” the department said.

Davies said trade ministers from Sacu member countries would meet in Gauteng over the weekend as part of efforts to “re-galvanise” the customs union into a tool of development integration.

Commenting on the possibility of “reciprocal” trade agreement at the end of the African Growth and Opportunity Act (Agoa), Davies said it was too early to tell if the US would insist on an agreement similar to the EPA when Agoa came to an end.

Agoa is a non-reciprocal because the respective African countries do not have to concede market access to the US.

Davies also pointed to the upcoming US presidential elections which would culminate in a new administration after November.

Meanwhile, Davies steered clear of the upcoming referendum on the UK’s membership of EU, and said: “I will not be appropriate for us to comment on a referendum taking place in another country.”

However, he said the UK had the option of joining Iceland, Liechtenstein, Norway, and Switzerland in the European Free Trade Association.

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